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Cake day: July 19th, 2023

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  • sharkaccident@lemmy.worldtomemes@lemmy.worldThe system is broken
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    10 months ago

    On 25 years, you pay a fifth of the building price for it. And that is not accounting for the equity that the house gains over the years like we’ve seen during covid.

    So does every other home owner. That benefit is not for just landlords.

    I don’t understand the hatred for the risk return of being a landlord. Let’s assume you can double your money in the stock market every 7 years.

    Compare real estate and stock ownership for 20k (100k house). In the market, 20k becomes 40k in 7 and 80k in 14, 160k in 21, and so on. That’s 215 total over 25 years. As long as appreciation is close to 3% it’s almost a wash after 25 years. The difference is as a landlord you have the risk of capital expenses requiring you to hold cash and the value of your time to run a rental.


  • sharkaccident@lemmy.worldtomemes@lemmy.worldThe system is broken
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    10 months ago

    I never understood this sentiment. For single family homes the market sets the price. It’s not like when you buy a house and use it for a rental all of sudden it’s cheaper or more expensive in some way. You could make a price/demand argument but then again the underlying demand is housing not money hungry landlords. If there was not an underlying housing demand, no one would rent and it would fail as an investment.

    How does the community serve those who want to rent? Apartments? Now that is where we can agree. Apartment valuation is calculated on operations not on the market. The only way to raise value of an apartment is to raise rent (or reduce expenses in some way but at some point you can only do so much). At least with SFH you have appreciation that landlords can factor in for return.

    Lastly, 2 of my rentals were foreclosures. If anything I’m performing the city a service by buying these properties and adding value. If you had to choose, would you rather live next to a vacant house or a rental?

    To answer your question, it’s fair for a renter to not build equity because they don’t pay for upkeep or have the risk associated with the loan. You have to put skin in the game at some point.

    Edit: there are some good points for the other side of the argument if you keep reading. I don’t know what the answer is but I’m not convinced that restrictions or to disincentivize rental operations is the answer.