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> what appears to be, very profitable venture for many corporations. It no doubt can be quite profitable where the tenants are willing to pay more than your co

> what appears to be, very profitable venture for many corporations. It no doubt can be quite profitable where the tenants are willing to pay more than your costs. There are unquestionably markets where that is the case. I'm not sure it holds universally, though. Not everyone is a landlord in San Francisco renting out to software developers with the capability to pay almost anything to be there and a competitiveness to be willing to do so. Do you really think the landlord in a dwindling town is profitable? As the town dwindles costs rise, and at the same time what incentive is there for the renters to pay more? It is not like there is a lineup behind them champing at the bit to rent the place when they leave.

unshavedyak 4y ago
> Do you really think the landlord in a dwindling town is profitable? As the town dwindles costs rise, and at the same time what incentive is there for the renters to pay more? It is not like there is a lineup behind them champing at the bit to rent the place when they leave. Yes, anywhere that renting continues to exist. If it wasn't profitable on average it would be sold asap. Again, there's always the chance you're buying from a chain of incompetent landlords who all can't do math and continually fail to turn a profit, i just don't seem that as the likely long term outcome. Let alone trying to rely on you making out better than your landlord. On average a simple and easy rule of thumb is that your landlord is paying what you'd pay, plus profit. Economies of scale/politics (lower taxes/etc) are the only time i see where on average both parties can profit. Oh and of course, as someone else pointed out, if you're in an amazingly rent controlled place for a variety of reasons you're probably making out like a bandit. My coworker's mother lived in a place in Seattle that, for some reason, was paying like $600/m (half my rent at the time!) in downtown Seattle. Comparable apartments were going for $1,800+ iirc. A bit of golden handcuffs, because she couldn't afford to move anywhere given how cheap the rent was, hah.
- randomdata 4y ago
  > If it wasn't profitable on average it would be sold asap. To who? If it can't be profitable, why would anyone else want to buy it? Maybe you'll get lucky and find another sucker, but then you're just pushing the same problem onto the next guy. Outside of that, about all you can do is disappear as if you never existed and let the fate of the property land where it may. But as humans tend to be strongly loss averse, more likely you'll keep plugging along in hopes that one day things will turn around.
  - unshavedyak 4y ago
    > To who? If it can't be profitable, why would anyone else want to buy it? Maybe you'll get lucky and find another sucker, but then you're just pushing the same problem onto the next guy. Someone will almost assuredly buy it at a low enough rate. It's either that or actively lose money each month. Tbh i'm still confused by your argument. Are you saying that you believe people will, month after month, take a loss for years so that someone can live more cheaply in a house than it would take that same person to own the home themselves? Economies of scale is the only way this plays out in the long term in any stable way. No?
    - randomdata 4y ago
      > Someone will almost assuredly buy it at a low enough rate. Let's examine that. If you were selling it to yourself you would charge yourself $0. We have established, for the sake of argument, that you can't turn a profit renting out the place. Which means that even $0 is too high. Are you suggesting that the rate is negative? i.e. You will pay someone to take it off your hands? I think at that point you may as well just disappear into the night and never come back. I mean, maybe you're thinking that this hypothetical person is trying to heat the place with $100 bills and the next guy to come along can cut costs dramatically by switching to natural gas, but I think for the purposes of discussion we can assume that the costs are already reasonably minimized. Are there small gains to be made with economies of scale? Sure, but I don't know if they are significant enough here. > Are you saying that you believe people will, month after month, take a loss for years so that someone can live more cheaply in a house I'm saying losses in business are the norm. It's not done out of the goodness of one's heart, it's just the nature of business being largely unpredictable and hard. I expect if you are discerning in your choices you can also continually eat at restaurants that see the restauranteur pay out of their own pocket for you to eat there. Even most software never turns a profit.
unshavedyak 4y ago
> Do you really think the landlord in a dwindling town is profitable? As the town dwindles costs rise, and at the same time what incentive is there for the renters to pay more? It is not like there is a lineup behind them champing at the bit to rent the place when they leave. Oh and one additional thought. To think of it differently, do you really think a landlord in a dwindling town would lose money month after month, year after year? Any sane landlord will be looking to cut the losses asap.
dragonwriter 4y ago
> Do you really think the landlord in a dwindling town is profitable? Yes, and so do the landlords. If they didn’t, instead of renting the property out, they'd sell it for the price of one month's rent—someone willing to rent at that price would be even more willing to buy, and the landlord would then be free of the future losses they expect to suffer.
- randomdata 4y ago
  Given the scenario, why would someone pay even a month's rent to take on a larger monthly expense going forward? More concretely, let's say it costs $1,000 per month to the landlord and the tenant pays $500 per month. The landlord is losing $500 a month and wants to unload the place, so he offers the property to you, the tenant, for $500. But now you have to assume the $1,000 per month cost. What's in it for you to double your expenses? That is unless the landlord continues to carry the $500 per month shortfall even after the sale. That would be a good deal for the tenant, but why would the landlord sell under that scenario? If you're paying $500 per month out of pocket either way, you may as well ride it out and hope things improve someday.

unshavedyak 4y ago

> Do you really think the landlord in a dwindling town is profitable? As the town dwindles costs rise, and at the same time what incentive is there for the renters to pay more? It is not like there is a lineup behind them champing at the bit to rent the place when they leave. Yes, anywhere that renting continues to exist. If it wasn't profitable on average it would be sold asap. Again, there's always the chance you're buying from a chain of incompetent landlords who all can't do math and continually fail to turn a profit, i just don't seem that as the likely long term outcome. Let alone trying to rely on you making out better than your landlord. On average a simple and easy rule of thumb is that your landlord is paying what you'd pay, plus profit. Economies of scale/politics (lower taxes/etc) are the only time i see where on average both parties can profit. Oh and of course, as someone else pointed out, if you're in an amazingly rent controlled place for a variety of reasons you're probably making out like a bandit. My coworker's mother lived in a place in Seattle that, for some reason, was paying like $600/m (half my rent at the time!) in downtown Seattle. Comparable apartments were going for $1,800+ iirc. A bit of golden handcuffs, because she couldn't afford to move anywhere given how cheap the rent was, hah.

randomdata 4y ago
> If it wasn't profitable on average it would be sold asap. To who? If it can't be profitable, why would anyone else want to buy it? Maybe you'll get lucky and find another sucker, but then you're just pushing the same problem onto the next guy. Outside of that, about all you can do is disappear as if you never existed and let the fate of the property land where it may. But as humans tend to be strongly loss averse, more likely you'll keep plugging along in hopes that one day things will turn around.
- unshavedyak 4y ago
  > To who? If it can't be profitable, why would anyone else want to buy it? Maybe you'll get lucky and find another sucker, but then you're just pushing the same problem onto the next guy. Someone will almost assuredly buy it at a low enough rate. It's either that or actively lose money each month. Tbh i'm still confused by your argument. Are you saying that you believe people will, month after month, take a loss for years so that someone can live more cheaply in a house than it would take that same person to own the home themselves? Economies of scale is the only way this plays out in the long term in any stable way. No?
  - randomdata 4y ago
    > Someone will almost assuredly buy it at a low enough rate. Let's examine that. If you were selling it to yourself you would charge yourself $0. We have established, for the sake of argument, that you can't turn a profit renting out the place. Which means that even $0 is too high. Are you suggesting that the rate is negative? i.e. You will pay someone to take it off your hands? I think at that point you may as well just disappear into the night and never come back. I mean, maybe you're thinking that this hypothetical person is trying to heat the place with $100 bills and the next guy to come along can cut costs dramatically by switching to natural gas, but I think for the purposes of discussion we can assume that the costs are already reasonably minimized. Are there small gains to be made with economies of scale? Sure, but I don't know if they are significant enough here. > Are you saying that you believe people will, month after month, take a loss for years so that someone can live more cheaply in a house I'm saying losses in business are the norm. It's not done out of the goodness of one's heart, it's just the nature of business being largely unpredictable and hard. I expect if you are discerning in your choices you can also continually eat at restaurants that see the restauranteur pay out of their own pocket for you to eat there. Even most software never turns a profit.

unshavedyak 4y ago

dragonwriter 4y ago

> Do you really think the landlord in a dwindling town is profitable? Yes, and so do the landlords. If they didn’t, instead of renting the property out, they'd sell it for the price of one month's rent—someone willing to rent at that price would be even more willing to buy, and the landlord would then be free of the future losses they expect to suffer.

randomdata 4y ago
Given the scenario, why would someone pay even a month's rent to take on a larger monthly expense going forward? More concretely, let's say it costs $1,000 per month to the landlord and the tenant pays $500 per month. The landlord is losing $500 a month and wants to unload the place, so he offers the property to you, the tenant, for $500. But now you have to assume the $1,000 per month cost. What's in it for you to double your expenses? That is unless the landlord continues to carry the $500 per month shortfall even after the sale. That would be a good deal for the tenant, but why would the landlord sell under that scenario? If you're paying $500 per month out of pocket either way, you may as well ride it out and hope things improve someday.