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Maybe they pay all the costs, but thats when there are tenants. The landlord is taking on the risk of being the one the bank will come to when a mortgage needs
by amflare 4y ago
Maybe they pay all the costs, but thats when there are tenants. The landlord is taking on the risk of being the one the bank will come to when a mortgage needs to be paid. And the effort of maintenance (and cost, then there are no tenants). All the tenant needs to do is show up and sign a check, they have no other worries. Thats the trade-off.
- fy20 4y agoA big plus of being a landlord in our current time period is that what you charge the tenants in rent covers: a) the cost of your time b) the cost of maintaining the property c) the cost of paying interest on the loan d) the cost of repaying capital on the loan. After 30 years or whatever once the mortgage is paid off, the landlord's costs will drop significantly, but the amount they charge tenants still takes into account the last two, which is why being a landlord is often seen as a great way to fund retirement. One way to change that could be to have mortgages that have an unlimited term and are interest only. The way the landlord wouldn't need to charge (d) to tenants and they only advantage to them being a landlord would be (a). But I'm sure if that were to happen capital costs for properties would increase significantly that at the end of the day rents would be exactly the same as they are today.