4 ms·

But the same argument applies to landlords too. Why are they willingly losing money?

by rwmj 5mo ago

kridsdale1 5mo ago
I’m a landlord. I’m losing money because the Seattle market went to shit and nobody will buy this place. I bought for $850k in 2017. Selling now asking $899k and no-one’s buying. Think of my ARR with inflation and opportunity cost here. I sold Facebook shares to get this. I have made zero return from rents overall. I’d likely have earned $1M if I hadn’t sold those shares.
- cma 5mo ago
  That's pretty contingent. If you had Snapchat shares instead you'd be ahead.
  - philipallstar 5mo ago
    Even selling up and putting the money into the S&P500 would've done a lot better than that[0], so I think it's a reasonable claim. [0] https://investment-estimator.com/s&p-500-calculator https://investment-estimator.com/s&p-500-calculator says $850k in 2017 would be $2.8M by 2026.
- markdown 5mo ago
  Can I ask why you're selling? Do you happen to be a young person looking to move for better prospects (economic migrant)?
jandrewrogers 5mo ago
A landlord is unlikely to have the same cost basis as someone buying on a new mortgage. I know many landlords that own their rentals outright. The ability to make a profit renting for less than you'd pay in interest charges alone changes the financial calculation. That said, landlords don't always have a choice to not lose money. These are investments, there is inherent risk.
kccqzy 5mo ago
A lot of small mom-and-pop landlords are certainly losing money. Especially when they buy properties as their own residence but later converted to a rental. The majority of the Bay Area housing market has basically zero properties that would make a landlord profitable; you only need to compare the market value of a house against the market rent. And this is really no different from the majority of stock pickers or day traders. They just lose money.

4 ms·

But the same argument applies to landlords too. Why are they willingly losing money?

by rwmj 5mo ago

But the same argument applies to landlords too. Why are they willingly losing money?

kridsdale1 5mo ago
I’m a landlord. I’m losing money because the Seattle market went to shit and nobody will buy this place. I bought for $850k in 2017. Selling now asking $899k and no-one’s buying. Think of my ARR with inflation and opportunity cost here. I sold Facebook shares to get this. I have made zero return from rents overall. I’d likely have earned $1M if I hadn’t sold those shares.
- cma 5mo ago
  That's pretty contingent. If you had Snapchat shares instead you'd be ahead.
  - philipallstar 5mo ago
    Even selling up and putting the money into the S&P500 would've done a lot better than that[0], so I think it's a reasonable claim. [0] https://investment-estimator.com/s&p-500-calculator https://investment-estimator.com/s&p-500-calculator says $850k in 2017 would be $2.8M by 2026.
- markdown 5mo ago
  Can I ask why you're selling? Do you happen to be a young person looking to move for better prospects (economic migrant)?
jandrewrogers 5mo ago
A landlord is unlikely to have the same cost basis as someone buying on a new mortgage. I know many landlords that own their rentals outright. The ability to make a profit renting for less than you'd pay in interest charges alone changes the financial calculation. That said, landlords don't always have a choice to not lose money. These are investments, there is inherent risk.
kccqzy 5mo ago
A lot of small mom-and-pop landlords are certainly losing money. Especially when they buy properties as their own residence but later converted to a rental. The majority of the Bay Area housing market has basically zero properties that would make a landlord profitable; you only need to compare the market value of a house against the market rent. And this is really no different from the majority of stock pickers or day traders. They just lose money.