6 ms·

Genuinely curious, are you pointing this out as a case of "very protected"? To me this seems absurdly low. Losing a dwelling is much more difficult than losing

Genuinely curious, are you pointing this out as a case of "very protected"? To me this seems absurdly low. Losing a dwelling is much more difficult than losing a job. It can be absolutely traumatic, and set people back financially, or worse for people who are already on the brink. In Quebec, where I live, thankfully it's one year. But it should be longer unless you can demonstrate some sort of valid legal reason like your tenant is damaging the building. Just cause you can extract a higher rent shouldn't mean you upend where someone lives.

scarface74 4y ago
So who should foot the bill when a tenant isn’t paying rent? Isn’t fulfilling their lease requirements like not paying for utilities?
- rcpt 4y ago
  The landlord. If you're not ok with that risk then you should sell to someone who is.
  - scarface74 4y ago
    Yes because decreasing profit potential is going to do an amazing job at increasing capital inflows, increasing supply and affordability. If I know that there is more risk involved in being a landlord, why wouldn’t I increase the rent to compensate?
    - rcpt 4y ago
      Higher profit risk means you won't bid as high for investment property. Sounds good to me. If you could increase the rent and still find tenants you'd do it right now. No reason to wait for any legislation
      - deleted 4y ago
        [deleted]
      - scarface74 4y ago
        Higher profit risks mean that I’m going to charge more. If it doesn’t make sense for me to invest in real estate, why not invest in something else? How does that help reduce housing costs? If the regulations change, all landlords that have any business acumen are going to address that by raising rent. The entire market is going to change.
        crote 4y ago
        Exactly, that's the entire point. If landlords are less willing to invest in property the housing price will drop, making it easier for people to buy the house themselves. People don't want a landlord, they want a home. For many people the landlord is currently a necessary evil they'd rather get rid of.
        scarface74 4y ago
        No the entire market is going to change and if I know my risks are going to change, I’m going to increase rent. It’s going to increase prices and/or reduce supply as not as much capital flows in. People may not want landlords. But everyone doesn’t want to own a home. By definition, they want to rent from someone else - ie have a landlord.
        rcpt 4y ago
        This wouldn't magically create rich tenants in your city. If you can really do it then why don't you simply increase rent right now?
        scarface74 4y ago
        The market conditions as they exist today with the known expenses has established an equilibrium. When expenses go up or risks go up across the market, the market adjusts.
- dannyw 4y ago
  You're running a business, and part of the deal is risk, including eating losses.
  - scarface74 4y ago
    It’s called a “risk premium”. If I know my chances of losing money is higher, I’m going to raise rents. How does that help anyone?
    - Regnore 4y ago
      You won’t be able to infinitely increase your rent (renters can only afford so much), and other landlords with more tolerance for risk may not raise rents as much (or at all). Some landlords will exit the market which will lower the price of housing and transition some renters into owners.
      - scarface74 4y ago
        How will it lower the cost of housing by decreasing supply? Not everyone wants to or should buy a house. A house ties you down to one location makes mobility a lot harder when you want to change jobs and goes up your capital.
    - rcpt 4y ago
      Or, and more likely imo, you'll be less willing to bid as much when you buy an investment property. Maybe we can agree that the price-to-rent ratio will decrease?
      - scarface74 4y ago
        It will increase as you will have less capital flowing in willing to increase supply.
        rcpt 4y ago
        The supply of land is fixed. If we're talking about the US then most of what you pay for when you buy is the land. The current setup hasn't exactly been great at generating new housing. Juicing speculation increases nimbyism just as much as it increases developer interest.
- UncleMeat 4y ago
  A major argument for why landlords should make money is that they provide risk smoothing. They take on risk and the renter pays a premium (like insurance) for that risk. But that means that some landlords have to lose. The idea that landlords should never lose money breaks the entire arrangement. If that is the case then there should be absolutely zero risk premium and renters should just be paying for the cost of maintenance (often skimped badly by landlords) and the marginal opportunity cost of having either a mortgage or having equity tied up in the property (often much lower than the nominal rent). Landlords often retreat at this point and just say "well we are charging what the market rate is" and leave behind any pretense that this is a fair economic transaction. In that case, landlords can get fucked, in my opinion. A system that buys up a scarce and necessary resource and then sells it back at prices disconnected from the actual value provided by landlords is unethical.
  - scarface74 4y ago
    JPM is not buying up existing inventory. They are creating new inventory. Why should they do so with the expectation of losing money?
    - UncleMeat 4y ago
      Who said anything about expectation? I'm not saying that landlords need to lose money in expectation. I am saying that some landlords need to lose money if they are indeed charging a risk premium. Same way we expect insurance companies to make money on average but lose money on some individual policies. My point is that complaining about rare cases where landlords lose money because they cannot evict a tenant who isn't paying at the drop of a hat is simply ridiculous. It is like complaining that an insurance company occasionally has to pay out for their policies.
      - sahila 4y ago
        I think a problem with this approach is you rid yourself of all small landlords and move towards corporate owned housing. Only those with a large portfolio of homes can afford the statistical averages you’re talking about.

scarface74 4y ago

So who should foot the bill when a tenant isn’t paying rent? Isn’t fulfilling their lease requirements like not paying for utilities?

rcpt 4y ago
The landlord. If you're not ok with that risk then you should sell to someone who is.
- scarface74 4y ago
  Yes because decreasing profit potential is going to do an amazing job at increasing capital inflows, increasing supply and affordability. If I know that there is more risk involved in being a landlord, why wouldn’t I increase the rent to compensate?
  - rcpt 4y ago
    Higher profit risk means you won't bid as high for investment property. Sounds good to me. If you could increase the rent and still find tenants you'd do it right now. No reason to wait for any legislation
    - deleted 4y ago
      [deleted]
    - scarface74 4y ago
      Higher profit risks mean that I’m going to charge more. If it doesn’t make sense for me to invest in real estate, why not invest in something else? How does that help reduce housing costs? If the regulations change, all landlords that have any business acumen are going to address that by raising rent. The entire market is going to change.
      - crote 4y ago
        Exactly, that's the entire point. If landlords are less willing to invest in property the housing price will drop, making it easier for people to buy the house themselves. People don't want a landlord, they want a home. For many people the landlord is currently a necessary evil they'd rather get rid of.
        scarface74 4y ago
        No the entire market is going to change and if I know my risks are going to change, I’m going to increase rent. It’s going to increase prices and/or reduce supply as not as much capital flows in. People may not want landlords. But everyone doesn’t want to own a home. By definition, they want to rent from someone else - ie have a landlord.
        rcpt 4y ago
        This wouldn't magically create rich tenants in your city. If you can really do it then why don't you simply increase rent right now?
        scarface74 4y ago
        The market conditions as they exist today with the known expenses has established an equilibrium. When expenses go up or risks go up across the market, the market adjusts.
dannyw 4y ago
You're running a business, and part of the deal is risk, including eating losses.
- scarface74 4y ago
  It’s called a “risk premium”. If I know my chances of losing money is higher, I’m going to raise rents. How does that help anyone?
  - Regnore 4y ago
    You won’t be able to infinitely increase your rent (renters can only afford so much), and other landlords with more tolerance for risk may not raise rents as much (or at all). Some landlords will exit the market which will lower the price of housing and transition some renters into owners.
    - scarface74 4y ago
      How will it lower the cost of housing by decreasing supply? Not everyone wants to or should buy a house. A house ties you down to one location makes mobility a lot harder when you want to change jobs and goes up your capital.
  - rcpt 4y ago
    Or, and more likely imo, you'll be less willing to bid as much when you buy an investment property. Maybe we can agree that the price-to-rent ratio will decrease?
    - scarface74 4y ago
      It will increase as you will have less capital flowing in willing to increase supply.
      - rcpt 4y ago
        The supply of land is fixed. If we're talking about the US then most of what you pay for when you buy is the land. The current setup hasn't exactly been great at generating new housing. Juicing speculation increases nimbyism just as much as it increases developer interest.
UncleMeat 4y ago
A major argument for why landlords should make money is that they provide risk smoothing. They take on risk and the renter pays a premium (like insurance) for that risk. But that means that some landlords have to lose. The idea that landlords should never lose money breaks the entire arrangement. If that is the case then there should be absolutely zero risk premium and renters should just be paying for the cost of maintenance (often skimped badly by landlords) and the marginal opportunity cost of having either a mortgage or having equity tied up in the property (often much lower than the nominal rent). Landlords often retreat at this point and just say "well we are charging what the market rate is" and leave behind any pretense that this is a fair economic transaction. In that case, landlords can get fucked, in my opinion. A system that buys up a scarce and necessary resource and then sells it back at prices disconnected from the actual value provided by landlords is unethical.
- scarface74 4y ago
  JPM is not buying up existing inventory. They are creating new inventory. Why should they do so with the expectation of losing money?
  - UncleMeat 4y ago
    Who said anything about expectation? I'm not saying that landlords need to lose money in expectation. I am saying that some landlords need to lose money if they are indeed charging a risk premium. Same way we expect insurance companies to make money on average but lose money on some individual policies. My point is that complaining about rare cases where landlords lose money because they cannot evict a tenant who isn't paying at the drop of a hat is simply ridiculous. It is like complaining that an insurance company occasionally has to pay out for their policies.
    - sahila 4y ago
      I think a problem with this approach is you rid yourself of all small landlords and move towards corporate owned housing. Only those with a large portfolio of homes can afford the statistical averages you’re talking about.