19 ms·
The carpetbagger’s guide to home ownership
- deleted 5y ago[deleted]
- stareblinkstare 5y agoWhy does this read like a penance?
- chmod600 5y agoA lot of people place misdirected blame for unaffordable housing on themselves or others who buy, fix up, and rent out houses. It's pretty obvious that the cause of unaffordable housing is elsewhere. But being the one to actually collect rent is a kind of guilt-by-association.
- causality0 5y agoI mean, sure. At the end of the day all land owners, and I speak as one, exist at the end of a chain that began with theft and likely violence. The surface of the earth is by nature no less a resource that should be common to all man as the atmosphere and the oceans. Neither the landlord with more than he can live on nor the renter with not enough to live on can exist without someone at some point having taken more than their fair share by guile or force of arms.
- TulliusCicero 5y agoOwning as the only housing model doesn’t make sense. There’s plenty of reasons someone might prefer to rent instead, most of them having to do with not being in a position to put down roots. Which necessitates some kind of landlord.
- nitrogen 5y agoOwning shares that could be transferred from house to house would make a lot more sense than renting.
- TulliusCicero 5y agoThat sounds like it would be hideously complicated in practice. Renting works fine if you have some basic regulations (which admittedly is the opposite of the case in the US).
- enord 5y agoMoney. The shares you are talking about already exist, and they're called "money". Of course, the relative value of shares wrt. the house will fluctuate over time and you'd have to account for this when transferring between houses, except this is calculated for you by the market when you just use money.
- refurb 5y agoI don’t believe sin is inheritable and I didn’t steal land from anyone, I was just born into a system that I’m doing my best to take part in.
- causality0 5y agoThe sin isn't heritable but land, like artifacts in the British Museum, doesn't stop being stolen because we've had it a long time or traded it amongst ourselves. I'm not advocating anything radical; I'm just saying it's reasonable to be a little uncomfortable about it sometimes.
- refurb 5y agoThat’s entirely a judgement call. I wouldn’t assume everyone feels that way. The people my ancestors stole the land from, stole it from another indigenous tribe. Go back far enough and everyone is living on stolen land.
- ausbah 5y agois one of the incentives for those who rent housing not to keep the available housing supply low (at least to a certain point)?
- chmod600 5y agoIf you grow carrots, you would prefer to keep the overall supply of carrots low so that your carrots will fetch the highest price. But what you are actually doing is increasing the supply of carrots. So incentives and results are two different things and we shouldn't conflate the two. I assume by "incentives", you mean that they'd manipulate the law to limit other suppliers. I'm sure that happens, but as a landlord you don't have to do that. And being a landlord (who isn't manipulating the law) doesn't make the problem any worse. Criticism should be directed at the real problems. Those are a mix of law and culture and just inertia.
- diordiderot 5y ago> what you are actually doing is increasing the supply of carrots. There's an error in your analogy. Nobody is growing carrots, they're buying carrots Incentives push the carrotlords to pass local ordinances. 'Show me the incentive and I'll show you the outcome'
- ausbah 5y agolandlords rarely build housing, they usually buy up existing housing and rent it out and the don't have to do anything illegal to restrict the housing supply - they can lobby, regulate, and vote
- chmod600 5y agoI don't know what you mean "rarely", because clearly a lot of housing is built and intended as rental property. Regardless, the small landlord who buys a single family house and rents it out still puts a new house into the rental market, making it more affordable than it previously was on the purchase market. Along the way a landlord typically makes improvements and pays for maintenance, which improves the supply. If you don't like laws then complain about the laws. The act of renting a house to someone else is not the problem.
- tjr225 5y agoLmao, a dude from San Francisco trying to justify his own landlordship back in the midwest. Amazing.
- refurb 5y agoThis is not a wealthy SF landlord story, this is an house cleaner. It’s an impressive story of someone slowly building up a real estate portfolio in the Bay Area. Most of it through creative means and living lean. It’s actually an impressive story.
- HarryHirsch 5y agoIt's impressive in the way a trainwreck is impressive. There's no reason why housing appreciates year after year. It should be a depreciating asset, like a car or at most value-neutral. But misguided government policies have caused housing to be out of reach for the greater part of the population. Have you seen the housing price index for Pittsfield, MA: https://fred.stlouisfed.org/series/ATNHPIUS38340Q https://fred.stlouisfed.org/series/ATNHPIUS38340Q Pittsfield. In Western MA. Not a desirable area. But it's going up, up, up. Asset inflation at its finest. This needs to stop, but it's unclear how. Can people invest in tulips instead, you can do without pretty flowers, but a roof over your head is a necessity for life!
- 1986 5y agoNot arguing your greater point at all, but the Pittsfield MSA includes all of the Berkshires which are absolutely desirable even if Pittsfield itself isn't.
- refurb 5y agoI mean, ok? That doesn't change the point this house cleaner was able to get creative and a bunch of property.
- HarryHirsch 5y agoHe did that on the backs of those trying to get into the housing market now.
- pmorici 5y agoFunny the lengths they go to to try and ingratiate themselves with the liberal crowd. This person has derived great success from humble beginnings because of capitalism nothing to be ashamed of, to the contrary a shining example. This sort of thing should be more explicitly taught in schools.
- fideloper 5y ago> 5) You don’t need as much house as you’ve been lead to believe. Instead of trading up for a larger fancier house with more debt as you age, consider living simply and buying additional homes for diversified income. IMO (in the process of doing this myself), this is the most important point
- rekabis 5y ago> 5) You don’t need as much house as you’ve been lead to believe. For living arrangements, you are mostly correct. I can exist very comfortably in about 1,000ft². Heck, even 800ft² would be comfy and cosy. My problem involves my hobbies and domestic activities: I need a 200ft² cool room for the enormous amounts of fruits and vegetables I harvest every year, canning all that shit needs a 150ft² summer kitchen so I don’t seize up my regular kitchen with all that processing (I use that summer kitchen consistently at least six months out of the year), I need a library the size of a master bedroom (at least another 200ft²) for my books (including the movable stacks on rails), I do enough woodworking to need a garage-sized shop (500ft²) , and my IT work requires no small office (180ft² and an attached server room (80ft²) with its own cooling. Plus, I regularly use a wet sauna, which needs the same amount of room as a laundry. So that balloons my requirements by _at least_ another 1,500ft², to say nothing of the needs of my wife.
- alphabettsy 5y agoMany of the needs seem like wants and then it just depends on how much you these things are worth to you.
- xyzzyz 5y ago> Many of the needs seem like wants This is true of initial 800 sq ft as well.
- bradlys 5y agoTrue of anything beyond simplistic shelter that barely keeps you alive. Everything is a want when you want it to be. Is even living really a need? After all - you can just die and then you don’t definitely don’t need/want anything then for sure!
- endisneigh 5y agoI believe the smartest thing you can do if you are reading this in America is to buy a house that you can afford in an area you would like to live in for more than a few years with more than 1 bedroom and rent out the additional bedrooms. Setting aside appreciation, doing this is the closest thing to a guaranteed success imaginable. Leverage lowers your start-up costs, renting enables all your house work to be deductible, the rent itself allows you do pay down your principle faster, and most importantly you were going to live there anyway so your opportunity cost is 0.
- gruez 5y ago>your opportunity cost is 0. not really, you still need to factor in the cost of capital (ie. downpayment) and the risk that the housing market might collapse.
- endisneigh 5y ago> not really, you still need to factor in the cost of capital (ie. downpayment) and the risk that the housing market might collapse. I disagree - if you're talking about bubbles collapsing that's true no matter how you store your money, e.g. inflation ruining savings, stock market correction, etc. You need a place to live anyway and government incentives will reduce your cost of living far below renting anyway. What is true is that you drastically reduce your liquidity but I already presumed that in the scenario anyway by saying staying a few years (any housing correction historically will be resolved in a few years), if applicable
- cma 5y agoWhy not buy securities with inflation protection? The treasury offers them.
- np_tedious 5y agoI think you're training about i bonds, and they are capped at 10k / person / year
- plankers 5y ago>I lived in an illegal rental to save up for a home, then decided to buy out-of-state properties and drive up the rent. I'm aware of how this will be perceived, but I want to feel good about myself despite knowing how what I'm doing hurts others. lol
- refurb 5y agoDrive up the rent? “We are renting to willing tenants at the fair market price.” Landlord’s cant “drive up the rent” any more than employees can be unfairly paid too much.
- dazc 5y agoRenting below 'fair market price' would be one way? In the UK we have a lot of private landlords - some have borrowed heavilly and are merely expoloiting their ability to obtain a mortgage where their tenants can not and are making marginal amounts of money in the process (often much less than if they simply invested what cash they have in a tracker fund). Some have inherited a property or are renting out buildings they bought twenty years ago where the amount of rent they charge is multiple times out of sync with their actual costs. So long as all of these people can say they are only charging 'fair market' prices then the problem persists.
- BirdieNZ 5y agoLand rent works very differently than most other markets because land is of limited supply. "Fair market price" is determined by what people who live in an area can afford to pay, rather than primarily supply and demand. Add to that restrictive zoning laws and you end up with a situation where most landlords are extracting significant economic rents from their tenants without needing to provide any extra service or quality of good to earn that rent.
- refurb 5y agoI don’t disagree that zoning impacts prices, but it’s still “fair market price”, no? I choose to move to SF knowing that rents were absurd compared to other cities I could have moved to. But I choose to roll the dice on SF being the better choice. I get it that people who grew up in SF face a different choice - leave or not. But it’s still a choice for them.
- phnofive 5y ago> A property that has four or fewer apartments is treated the same as a single family home for lending purposes. But five or more units requires a commercial loan. So we created a pro forma and told the bank we were investors looking to be slumlords and this building would cash flow. This is not a difference of perspective - home loans involve significantly more consumer protections than commercial ones; had things gone another way, the author'd be paying substantially more in rent to whatever landlord purchased the foreclosed five-plex. Most of the article sweeps risk under the rug as do most stories where the winner is also a lucky survivor.
- kareemm 5y agoWhat issues would they have had other than not paying $900/m that would have caused the bank to foreclose? Even a decade ago $900/m wasn’t a lot of money for rent in a major urban metro.
- bradlys 5y agoSplit between two people as well. Only $450/month. It was really not very much money at all. Their partner apparently isn’t a house cleaner and supposedly makes a decent living.
- skybrian 5y agoOne risk might be some kind of legal dispute with the other partners, if they don't get along as expected? Or maybe some devastating expense.
- VRay 5y agoPeople are fighting the wrong fight when they attack this guy (or attack the people attacking this guy, for that matter) It isn't SF Bay Bros'/foreigners'/companies' fault that houses are too expensive. It's because of strict zoning laws and a lack of building enough housing to match supply with demand[1]. Demand keeps going up way faster than supply, nationwide, and we're all feeling the squeeze [1]: A great example of this is the super low housing costs in Tokyo. My mother in-law and sister in-law are renting a 3 bedroom apartment right now, 20 minutes outside Shinjuku (one of the "Giant Bustling Megacity" parts of Tokyo) for $1300/month, which they can comfortably afford while working part time doing low end janitorial work. More info here: https://www.worksinprogress.co/issue/the-housing-theory-of-everything/ https://www.worksinprogress.co/issue/the-housing-theory-of-e...
- dzhiurgis 5y agoTokyo is somewhat good example, but brushes off things that houses are much smaller and IIRC you don’t own land below it.
- gonzo41 5y agoOut of curiosity, how big is a 3 bedroom apartment in Japan?
- MomoXenosaga 5y agoBigger than a homeless guy shopping cart.
- VRay 5y agoIt's tiny by US standards, but they use different types of furniture, so it's comfortable. They tend to use a lot of wall hooks, tons of tiny drawers, smaller convertible beds, etc. I was living there with my wife and her two family members and had no trouble at all. That place was about 700 square feet, but it felt like an 1100 square foot place would in the US with giant furniture and large open floor spaces. I had a ~150 square foot room set aside for my office and VR space, the in-laws had a bedroom with tatami mats, there was a large-ish living room/kitchen with a big TV and couch, and then a bedroom for me and the wife
- angarg12 5y agoJust read Taleb's Fooled by Randomness chapter on The Millionaire Next Door to understand why this article is, at best, useless.
- jonwinstanley 5y agoWhy is it useless?
- mdorazio 5y agoThe author got incredibly lucky multiple times in ways that are flat out impossible today. This is a shining example of survivorship bias touted as “I did it and so can you!”. Good for the author - he’s clearly industrious and made smart decisions, but treating this as a guide for anything other than “increase your luck surface and take calculated risks” is not going to help many people.
- digianarchist 5y agoIt’s like reading How to Be Rich by John Paul Getty and concluding you should go exploring for oil.
- Simon_O_Rourke 5y agoThe problem in the States is that while there's always more land, there's not always the supporting infrastructure, public transport or even affordable accessible private transport. The author is shrewd, but sweeping a lot of inherent risks under the carpet here too.
- alliao 5y agothe riskier moves could've gone wrong horribly but didn't, so well done to the author! took many gamble and got nicely paid out.
- tomohawk 5y ago> It was also sub rosa and illegal like most truly affordable housing in San Francisco > There would be no drama with rent controlled tenants > The landlord did the math and agreed to sell to us at below the full market value. He would be saving so much money by avoiding the associated legal challenges from disgruntled tenants that he would net the same profit even at a slightly lower price. It's clear from these statements that the good intentions of the politicos in SF are artificially inflating the cost of housing. The only way forward for this person was to work around those issues. Yes, it was lucky that all of those tenants were going to move out at the same time the landlord was thinking of selling, but this person was ready to take advantage of the opportunity when it presented itself. Taking advantage meant a lot of work and coordination. This pattern repeats with buying in Sonoma. They had prepared themselves to be ready for an opportunity, and when the opportunity arose, they could take advantage.
- chromatin 5y ago> People are fighting the wrong fight when they attack this guy Point of order: author is a female and a housekeeper ("maid")
- RickJWagner 5y agoToday's good guy / builder-of-society is tomorrow's slumlord. It happened to lots of people who are successful today. I don't see why it won't happen tomorrow. (To be clear: The business person doesn't change positions. It's jealousy on the part of the non-doers.)