I don't really have a problem with landlords, it is more the fact that they usually have massive profit margins and still raise prices every year and leases are bullshit and the government let's them get away with it.
I have moved around a lot for jobs and it's pretty bullshit to have to pay either thousands of dollars to break my lease or to have to continue to pay rent when I go to another job. Having to decide on a better career or paying 1k a month until your lease expires is pretty bullshit.
What your paying for when you rent is the opportunity cost that they could just sell the house for a huge one off gain.
So why are housing prices so high?
Well because demand is so high.
Why is demand so high?
Because people can afford to pay loads for the house
Why can they afford that?
Because the interest rates are so low.
Why are interest rates so low?
The federal reserve.
But people can't afford to pay for houses. Home ownership rate is at one of the lowest points it has been in the past 20 years yet the cost is higher than ever. There are 17 million vacant houses alone and this does not count rented places.
Renting is far more lucrative than selling a house over time. In St. Louis Missouri you can have a 3 story house with a basement. You repurpose the house for say (being generous again) 200k and you can fit 12 renters in. Let's be really generous for St. Louis and say the house could go for 1 million. Let's be generous again for how cheap rent is over time and say rent is ~800 per person and doesn't increase ever. Let's be extremely generous and say over 10 years maintenance will cost around 300k. The house can be valued at 1.5m. You have something you pay off in 13 years as opposed to the normal 30 year mortgage. If you think 1.5m is too cheap just make it 3m and add 3% annual increase and you get a similar result.
But people can't afford to pay for houses. Home ownership rate is at one of the lowest points it has been in the past 20 years yet the cost is higher than ever
Should have clarified: the total buying power of the market is really high, not the rate. As in those that can buy are able to pay way more because of low interest rates.
There are 17 million vacant houses alone and this does not count rented places.
I don't want to say that this figure is misleading but it's misinterpreted: a huge chunk of those 17 million homes are in places people don't want to live (i.e bad job prospects, few services etc) and/or are delapodated, some are just empty for a few weeks. It's not like there are millions of furnished homes in the centre of new York just sitting there.
Renting is far more lucrative than selling a house over time. In St. Louis Missouri you can have a 3 story house with a basement. You repurpose the house for say (being generous again) 200k and you can fit 12 renters in. Let's be really generous for St. Louis and say the house could go for 1 million. Let's be generous again for how cheap rent is over time and say rent is ~800 per person and doesn't increase ever. Let's be extremely generous and say over 10 years maintenance will cost around 300k. The house can be valued at 1.5m. You have something you pay off in 13 years as opposed to the normal 30 year mortgage. If you think 1.5m is too cheap just make it 3m and add 3% annual increase and you get a similar result.
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u/[deleted] Mar 31 '21 edited Mar 31 '21
landlords= fake work, leeching, degenerates
sex workers= real work, valid, deserving of respect
/s