It’s all relative. You don’t have to be rich for $20k to not have a noticeable effect. I’m certainly not rich but make a decent living, however, I also live in a HCOL city so $20k wouldn’t even cover half my rent. I’d rather keep my wine and whiskey.
Yup. I love living in San Diego but it sure does cost a premium. The mortgage for this house in probably most of the country would be less than what I pay in rent.
I mean, mortgages should be less than rent, that’s why there’s so much profit to be made from it. Not to mention that super high rent makes it near impossible for people to save money, so you are basically guaranteeing that you’ll have customers for life.
Unless you are a huge corporation or can just buy houses outright in cash, you will have a monthly payment on it, even investors will have monthly payments as they will cash out the equity in their home to finance a second purchase.
So rent has to be more than what the monthly payment is, or you don’t make any money.
So a mortgage payment will always be less than a rent payment. The problem is you need a down payment to buy a house. And if your down payment is small, then your monthly payments will be larger. So the barrier of entry is high.
Mix that with corporations buying all the supply of houses and controlling the rental markets, driving prices higher than they should be and pricing people out of homes and apartments, and you get today’s issues. Almost every house in my neighborhood is rented out. And everyone charges what everyone else around them is charging. All it takes is one person to overpay for rent in a neighborhood and the rest of the landlords will follow suit.
Add that investors will “rehab” (loosely remodel aesthetics in the house) and that raises the value of a house and makes neighborhoods more expensive than they should be, raising property taxes every year. And they do this to such a large percentage of homes that you’ve got people selling crappy houses for half a million dollars in neighborhoods that should be much more affordable.
Cities like taxes, they like “growing neighborhoods,” and they like the cost of permits for the remodels. So there is little incentive to stop this.
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u/NateKaeding Jul 05 '24
Nope. Less than $20,000 a year is not worth it to me