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> That's bullshit; being a landlord is a lot of labor. Buildings don't magically maintain themselves. It is true that there is a disconnect between the labor an

> That's bullshit; being a landlord is a lot of labor. Buildings don't magically maintain themselves. It is true that there is a disconnect between the labor and the income; being a landlord in a desirable area isn't more labor than being a landlord in a less desirable area (in fact it can be less!). Nope. I co-own a late 19th century New England triple-decker: a purpose -built rental building endemic to the northeast, and easily one of the most common rental properties in the country. In my comparatively inexpensive market, it would yield about 8k month in revenue. In Boston, it would be closer to 15k. The building hardly requires more maintenance than my 2021 car. I lived in apartments where the landlord literally didn't step foot in our apartment in the 8 years I lived there except for the one time our two downstairs neighbors got bedbugs so we all got treated (and it was a 45 second walkthrough.) If you think being a landlord is "a lot of labor" for the amount of income you get out of it, you either don't realize how little most landlords put into their properties or you don't realize what "a lot of labor" means.

asdefghyk 2y ago
If its so profitable ( implying landlord charging high rent ) then lots people will buy own home. If its such good risk to landlord than more rental available , and rents should be coming down OR increasing less due to increasing vacancy rate.
- chefandy 2y ago
  If it was that profitable then it would be cheaper? That doesn't even remotely make sense in the most superficial ways. I don't even understand how you'd think it does. Maybe if there were infinite housing options? But housing supply is extremely low in the US in large part because larger corporations are buying up huge swaths of housing and turning it into rental housing... Because it's really really profitable. And since supply is low and prices are high, it's not possible for most renters to buy houses. Nobody rents because it's cheaper overall, they rent because you don't need tens of thousands of dollars upfront for a down payment, plus a great credit score. That is, unless you're in Boston or the like where you must pay first months rent, last months rent, a security deposit, and a realtor fee generally equal to one months rent, meaning for that relatively reasonable $3k 2br apartment, you need $12k upfront to move in. So why don't they just buy it? Because buying a 2 or 3br market rate flat in Boston or the surrounding municipalities would cost maybe from $700k to $2m. The further surrounding areas are only slightly cheaper and by the time you hit more affordable places, your looking at a 90 to 120 minute car commute each direction. You either don't understand the math or you're not interested in understanding the math and just want to justify gouging people. Like I said, I own the exact type of building that most landlords own in the urban northeast. In fact, it was an absentee landlord rental building for decades and hasn't structurally changed since it was. I know EXACTLY how much it costs to operate this building, and how much labor it takes. That hand-wavy "but it's so expensive and takes so much work" garbage doesn't work on me. It's not labor-free and it costs money, especially if a roof needs to be repaired or the like, but that's true in all businesses and if you don't prepare for it well enough to not be a disaster when it happens, or you buy an instanely unreliable and maintenance-heavy building, that's not your customers fault. Even in our flat-roofed old timber-framed triple-decker, our very healthy and responsibly funded major repair savings and building expenses fund (roof repair, insurance, snow removal, water damage repair, etc) takes in a little over 5% of what our rental income would be in this fairly inexpensive market, and aside from the gardening and cleanup in the courtyard, we contribute nearly no labor outside of our own units. There's a culture of entitlement among landlords, at least in the US, that completely skews their understanding of what they deserve for what they put in to something. You show real plausible expenses or labor that I don't have in my 19th century timber-framed building that most other landlords have, then I'll happily change my perspective. I've asked for that every time I've had this conversation but it just doesn't materialize. You want to see what a lot of labor and expense for the amount of profit looks like? Look at the Eater article where the owner of Mei Mei in Boston details her P&L.
  - asdefghyk 2y ago
    RE "...And since supply is low and prices are high....." What exactly is constraining supply of new dwellings.? What is being done to create supply? How did this low supply come about. Most likely a series of several events has existed to several degrees for several years to create the supply issue. In my area vacancy rate can be used to measure supply. A vacancy rate of 3% is regarded as fair supply balance between property owners and people wanting to rent. Currently in my area supply is 0.8% - this means there is many more people seeking to rent a house that houses actually available for rent. In my area , the housing crisis is attributed ( in my opinion ) to certain government policies ( federal , state, local government ) policies.
    - chefandy 2y ago
      Nobody price gouges unless market forces let them. It simply wouldn't work. And they also didn't create the situation that allowed them to price gouge. Yet, it's still price gouging. "But the market" is not a defense against accusations of price gouging.
  - asdefghyk 2y ago
    Im saying in my part of the world. The costs of providing the building and actually renting to a tenant can consume a large part ( easily 50% plus for me ) of the gross yearly rent- ( and that does not include any cost of borrowed funds. or the expected return in invested funds ) My observation is lots costs are missed and not accounted for.
    - bugglebeetle 2y ago
      And the rent is paid by the tenants while the equity accrues to the owner. That’s it’s an investment with variable ROI is not anyone’s problem but the investor who stuck their money in this asset class instead of something else. No one is guaranteed a specific return on investment.
      - s1artibartfast 2y ago
chefandy 2y ago
Come on downvoters: surely your super solid argument can withstand my accounting records. Tell me what I'm missing as someone who owns the very sort of building I rented in for decades under maybe 10 landlords– both good and bad– at 10 addresses! What haven't I learned from that and the many people I've known who've owned rental buildings for decades? Surely the family whose bar I cooked in that owned 4 or 5 buildings they maintained themselves (even illegally doing things like replacing gas boilers themselves) was somehow hiding the labor they put into it because they all spent almost all of their time running the bar? Surely if you feel that correct, you've got solid empirical evidence that opposes mine, right? Expenses and labor are cut-and dried and any responsibile business owner documents them, right? This should be an easy argument to prove me wrong in.

asdefghyk 2y ago

If its so profitable ( implying landlord charging high rent ) then lots people will buy own home. If its such good risk to landlord than more rental available , and rents should be coming down OR increasing less due to increasing vacancy rate.

chefandy 2y ago
If it was that profitable then it would be cheaper? That doesn't even remotely make sense in the most superficial ways. I don't even understand how you'd think it does. Maybe if there were infinite housing options? But housing supply is extremely low in the US in large part because larger corporations are buying up huge swaths of housing and turning it into rental housing... Because it's really really profitable. And since supply is low and prices are high, it's not possible for most renters to buy houses. Nobody rents because it's cheaper overall, they rent because you don't need tens of thousands of dollars upfront for a down payment, plus a great credit score. That is, unless you're in Boston or the like where you must pay first months rent, last months rent, a security deposit, and a realtor fee generally equal to one months rent, meaning for that relatively reasonable $3k 2br apartment, you need $12k upfront to move in. So why don't they just buy it? Because buying a 2 or 3br market rate flat in Boston or the surrounding municipalities would cost maybe from $700k to $2m. The further surrounding areas are only slightly cheaper and by the time you hit more affordable places, your looking at a 90 to 120 minute car commute each direction. You either don't understand the math or you're not interested in understanding the math and just want to justify gouging people. Like I said, I own the exact type of building that most landlords own in the urban northeast. In fact, it was an absentee landlord rental building for decades and hasn't structurally changed since it was. I know EXACTLY how much it costs to operate this building, and how much labor it takes. That hand-wavy "but it's so expensive and takes so much work" garbage doesn't work on me. It's not labor-free and it costs money, especially if a roof needs to be repaired or the like, but that's true in all businesses and if you don't prepare for it well enough to not be a disaster when it happens, or you buy an instanely unreliable and maintenance-heavy building, that's not your customers fault. Even in our flat-roofed old timber-framed triple-decker, our very healthy and responsibly funded major repair savings and building expenses fund (roof repair, insurance, snow removal, water damage repair, etc) takes in a little over 5% of what our rental income would be in this fairly inexpensive market, and aside from the gardening and cleanup in the courtyard, we contribute nearly no labor outside of our own units. There's a culture of entitlement among landlords, at least in the US, that completely skews their understanding of what they deserve for what they put in to something. You show real plausible expenses or labor that I don't have in my 19th century timber-framed building that most other landlords have, then I'll happily change my perspective. I've asked for that every time I've had this conversation but it just doesn't materialize. You want to see what a lot of labor and expense for the amount of profit looks like? Look at the Eater article where the owner of Mei Mei in Boston details her P&L.
- asdefghyk 2y ago
  RE "...And since supply is low and prices are high....." What exactly is constraining supply of new dwellings.? What is being done to create supply? How did this low supply come about. Most likely a series of several events has existed to several degrees for several years to create the supply issue. In my area vacancy rate can be used to measure supply. A vacancy rate of 3% is regarded as fair supply balance between property owners and people wanting to rent. Currently in my area supply is 0.8% - this means there is many more people seeking to rent a house that houses actually available for rent. In my area , the housing crisis is attributed ( in my opinion ) to certain government policies ( federal , state, local government ) policies.
  - chefandy 2y ago
    Nobody price gouges unless market forces let them. It simply wouldn't work. And they also didn't create the situation that allowed them to price gouge. Yet, it's still price gouging. "But the market" is not a defense against accusations of price gouging.
- asdefghyk 2y ago
  Im saying in my part of the world. The costs of providing the building and actually renting to a tenant can consume a large part ( easily 50% plus for me ) of the gross yearly rent- ( and that does not include any cost of borrowed funds. or the expected return in invested funds ) My observation is lots costs are missed and not accounted for.
  - bugglebeetle 2y ago
    And the rent is paid by the tenants while the equity accrues to the owner. That’s it’s an investment with variable ROI is not anyone’s problem but the investor who stuck their money in this asset class instead of something else. No one is guaranteed a specific return on investment.
    - s1artibartfast 2y ago

chefandy 2y ago

Come on downvoters: surely your super solid argument can withstand my accounting records. Tell me what I'm missing as someone who owns the very sort of building I rented in for decades under maybe 10 landlords– both good and bad– at 10 addresses! What haven't I learned from that and the many people I've known who've owned rental buildings for decades? Surely the family whose bar I cooked in that owned 4 or 5 buildings they maintained themselves (even illegally doing things like replacing gas boilers themselves) was somehow hiding the labor they put into it because they all spent almost all of their time running the bar? Surely if you feel that correct, you've got solid empirical evidence that opposes mine, right? Expenses and labor are cut-and dried and any responsibile business owner documents them, right? This should be an easy argument to prove me wrong in.