3 ms·

Isn’t it obvious? The price of rent is linked to the price of the asset that is being rented, which is linked to how cheaply leverage can be purchased in the ac

Isn’t it obvious? The price of rent is linked to the price of the asset that is being rented, which is linked to how cheaply leverage can be purchased in the acquisition of the asset. That aside, rent has always made up a larger portion of normal inflation well before 2020. It only makes sense that this holds true now as well.

imtringued 4y ago
The price of rent is linked to the purchasing price not the current asset price. Also interest payments are a large portion of rents.
- skybrian 4y ago
  I'm not sure that's true. Wouldn't it be indirectly related? Landlords often set prices based on what they think is the market rate. Other landlords who bought their properties at higher prices will tend to raise rents, bringing up the average. Also, someone buying a property might choose to live there instead of renting it out. Not sure how it all shakes out.
- IAmGraydon 4y ago
  That’s incorrect. It’s a market.
- swagasaurus-rex 4y ago
  Purchasing price doesn’t cause rent to increase year after year by whatever number the landlord decides
  - Enginerrrd 4y ago
    This is a strange way to say "market forces". If it were arbitrary, the landlord would exceed the price the market would bear and the home would sit vacant. Otherwise, if you think the price is "too high" then the demand exceeds the supply. If you want the practice to fall, either demand must shrink, or supply must increase. Demand can shrink if more people live with roommates or family, or the local population declines. Supply can increase if we build more houses. Inflation means the landlord has to pay more for repairs and upkeep (both in labor and supplies). So, if the deal was "fair" before the increase in expenses, it sounds fair after the increase.
  - dv_dt 4y ago
    There is some reason to wonder if the market was algorithmically coordinated to raise prices irrespective of competition https://www.propublica.org/article/yieldstar-rent-increase-realpage-rent https://www.propublica.org/article/yieldstar-rent-increase-r...

imtringued 4y ago

The price of rent is linked to the purchasing price not the current asset price. Also interest payments are a large portion of rents.

skybrian 4y ago
I'm not sure that's true. Wouldn't it be indirectly related? Landlords often set prices based on what they think is the market rate. Other landlords who bought their properties at higher prices will tend to raise rents, bringing up the average. Also, someone buying a property might choose to live there instead of renting it out. Not sure how it all shakes out.
IAmGraydon 4y ago
That’s incorrect. It’s a market.
swagasaurus-rex 4y ago
Purchasing price doesn’t cause rent to increase year after year by whatever number the landlord decides
- Enginerrrd 4y ago
  This is a strange way to say "market forces". If it were arbitrary, the landlord would exceed the price the market would bear and the home would sit vacant. Otherwise, if you think the price is "too high" then the demand exceeds the supply. If you want the practice to fall, either demand must shrink, or supply must increase. Demand can shrink if more people live with roommates or family, or the local population declines. Supply can increase if we build more houses. Inflation means the landlord has to pay more for repairs and upkeep (both in labor and supplies). So, if the deal was "fair" before the increase in expenses, it sounds fair after the increase.
- dv_dt 4y ago
  There is some reason to wonder if the market was algorithmically coordinated to raise prices irrespective of competition https://www.propublica.org/article/yieldstar-rent-increase-realpage-rent https://www.propublica.org/article/yieldstar-rent-increase-r...