4 ms·

So this includes all landlords too? If I buy a second house, do it up, and rent it, I am an “investor”? While I can see how the delta in this metric is suggest

So this includes all landlords too? If I buy a second house, do it up, and rent it, I am an “investor”? While I can see how the delta in this metric is suggestive, it is not clear how it affects the available housing stock (rent+buy). What I think people actually care about is unoccupied investment properties, where someone buys and leaves it vacant. Apparently a lot of Chinese capital is parked in this way due to their capital controls preventing cash from being freely moved out of the country, though to be clear it’s not unique to China. Or if these properties are being flipped, perhaps that has a short-term negative impact on available housing stock as properties are taken off the market while being renovated. (If the marginal second bidder would have moved in to the house as-is, then the winning bid renovating and selling is reducing supply / increasing demand for housing.) As you note, a whole other kettle of fish around REITs that won’t use mortgages. In the US, REITs are a major contributor to new construction for example.

pavlov 3y ago
> ‘So this includes all landlords too? If I buy a second house, do it up, and rent it, I am an “investor”?’ Of course. The second house is purely an investment to you. I don’t imagine anybody particularly loves being a landlord. It’s sometimes messy compared to owning a stock. If you could get a better return with less risk from some other investment, you’d put your money in that instead. But residential real estate in cities happens to have an appealing risk/return profile that’s not directly correlated with stocks, so there are good reasons why both small and large investors buy housing.
Ghostt8117 3y ago
Yes, you are an investor. You do not live in the home you purchased. You rent it to earn money, i.e., an investment. This creates a huge problem. Rental properties have different regulations in different places. My brother-in-law was not given a lease renewal amnd was forced to move (within 30 days) while, where I live, that is illegal unless there is cause for eviction. It creates instability. Also, my rent increased $550/month in just two years. Who can afford that? This creates a tenuous housing issue. Thankfully, I was able to move and buy a very small condo so I have a set monthly payment and no longer need to worry about losing my home every year when my lease ends. There is a huge difference in how I can plan for the future knowing I am not going to be, potentially, homeless every year.
- tptacek 3y ago
  Housing would be (much) more difficult if nobody could rent and everyone had to own the homes they lived in, not easier.
  - CapstanRoller 3y ago
    There are more options beyond "own a house" and "pay someone else's mortgage without getting any equity"
    - nomel 3y ago
      Could you give some examples?
      - CapstanRoller 3y ago
        Within capitalism, we could have some kind of system to provide equity to tenants. They are effectively already paying a mortgage (just not their own). Outside of capitalism? Many more possibilities.
        nomel 3y ago
        > we could have some kind of system to provide equity to tenants This sounds interesting. Is this hypothetical? How does that equity get transferred/slowly leaked to the next tenant? How does one liquify it?
        CapstanRoller 3y ago
        I don't know how such a system would work exactly, but I know it would require that we stop treating houses like speculative assets and start treating them like a basic need (shelter).
        deleted 3y ago
        [deleted]
  - 3y ago
pjc50 3y ago
> If I buy a second house, do it up, and rent it, I am an “investor”? Clearly yes. Under-occupation is a separate issue; it's tempting to argue for an unoccupied homes tax, and politically attractive, but it has to be fairly small otherwise at the margin some houses in poor condition get demolished so the land can sit empty and accumulate value.
- Dylan16807 3y ago
  It doesn't have to be small for that reason. Tax that land just as hard.
paulddraper 3y ago
Yes of course. That is an investment property; the sole reason for ownership is generating a financial return.

pavlov 3y ago

> ‘So this includes all landlords too? If I buy a second house, do it up, and rent it, I am an “investor”?’ Of course. The second house is purely an investment to you. I don’t imagine anybody particularly loves being a landlord. It’s sometimes messy compared to owning a stock. If you could get a better return with less risk from some other investment, you’d put your money in that instead. But residential real estate in cities happens to have an appealing risk/return profile that’s not directly correlated with stocks, so there are good reasons why both small and large investors buy housing.

Ghostt8117 3y ago

Yes, you are an investor. You do not live in the home you purchased. You rent it to earn money, i.e., an investment. This creates a huge problem. Rental properties have different regulations in different places. My brother-in-law was not given a lease renewal amnd was forced to move (within 30 days) while, where I live, that is illegal unless there is cause for eviction. It creates instability. Also, my rent increased $550/month in just two years. Who can afford that? This creates a tenuous housing issue. Thankfully, I was able to move and buy a very small condo so I have a set monthly payment and no longer need to worry about losing my home every year when my lease ends. There is a huge difference in how I can plan for the future knowing I am not going to be, potentially, homeless every year.

tptacek 3y ago
Housing would be (much) more difficult if nobody could rent and everyone had to own the homes they lived in, not easier.
- CapstanRoller 3y ago
  There are more options beyond "own a house" and "pay someone else's mortgage without getting any equity"
  - nomel 3y ago
    Could you give some examples?
    - CapstanRoller 3y ago
      Within capitalism, we could have some kind of system to provide equity to tenants. They are effectively already paying a mortgage (just not their own). Outside of capitalism? Many more possibilities.
      - nomel 3y ago
        > we could have some kind of system to provide equity to tenants This sounds interesting. Is this hypothetical? How does that equity get transferred/slowly leaked to the next tenant? How does one liquify it?
        CapstanRoller 3y ago
        I don't know how such a system would work exactly, but I know it would require that we stop treating houses like speculative assets and start treating them like a basic need (shelter).
      - deleted 3y ago
        [deleted]
- 3y ago

pjc50 3y ago

> If I buy a second house, do it up, and rent it, I am an “investor”? Clearly yes. Under-occupation is a separate issue; it's tempting to argue for an unoccupied homes tax, and politically attractive, but it has to be fairly small otherwise at the margin some houses in poor condition get demolished so the land can sit empty and accumulate value.

Dylan16807 3y ago
It doesn't have to be small for that reason. Tax that land just as hard.

paulddraper 3y ago

Yes of course. That is an investment property; the sole reason for ownership is generating a financial return.