Betty and Bob are in an unfortunate situation, but they’re taking a thing of value and charging money to cover all costs, and make a profit. The tenant is therefore paying the mortgage and all repair costs, and then even more to support what amounts to a leech.
It might be a good arrangement for Betty and Bob, but it makes living somewhere more expensive.
Which is the general point. I can be sympathetic to Betty and Bob, but landlords buying houses leaves less houses for everyone else for a ‘job’ that doesn’t add any real value to society. It just props up someone with the economic means to buy multiple houses and make them a living while hanging the rest of us out to dry.
I’d say there’s a difference between renting out a portion of a house the landlord also lives in and purchasing whole other homes and renting them out.
Besides, no matter how nice the multi-home-owning landlord is, the reality is they don’t purchase homes and rent them out without making a profit on all expected costs, maintenance included. The better deal for the renter renting a whole home would be to own the home and maintain it, because then they’re saving the profit the landlord charges.
A nice polite leech is still a leech.
Sure, everything you purchase in a capitalistic society has profit added to it, but normally there’s also added value. You pay more in the brick and mortar store vs buying online because the added value is getting the item immediately. You pay more for the car part at the mechanics shop vs doing it yourself because having a professional install it adds value.
What value does Jim-bob owning 5 homes and renting them out to make a living add to the tenants?
What value does Jim-bob owning 5 homes and renting them out to make a living add to the tenants?
- The tenants are able to live in a house that they can’t afford to buy because they don’t have credit and credentials that satisfy the bank.
- The tenants are able to move out with a couple months notice if they get a job elsewhere. They don’t have to worry about selling the house or finding a way to pay double mortgages when they move elsewhere… Or, worse, taint their souls by renting out their extra house while waiting for the housing market to improve.
- The tenants money is not tied up in a property, they are able to invest it in the stock market which has a higher rate of return than home ownership (which only keeps pace with inflation on average, per Case Schiller).
- The tenants don’t have to worry about having money or credit reserved to cover unexpected costs, like the new water heater breaking a year after it was installed.
- The tenants don’t get constant calls from scammers claiming they want to py your property for CASH TODAY.
Just a few thoughts.
You make that sound like anyone who’s able to rent a place is able to buy a place, but at least in the US, that’s not alwaxs the case. Sure the mortgage might be cheaper than rent in most cases, but being able to save up enough for that down payment takes a lot. I didn’t have the luxury of living with my parents after high school to save up enough for a down payment on a house, so I’ve had to rent places since then.
Sure maybe all housing should be free, there’s certainly enough homes in the US for that to be possible, but the rest of capitalist society makes that impossible, but that’s not the fault of every landlord ever. Some, sure, but not all.
What value does Jim-bob owning 5 homes and renting them out to make a living add to the tenants?
A place to live without having to handle maintenance/upkeep themselves, to be approved for a mortgage, save up for a downpayment, or to have to sell (and navigate all the mess of that process) when they need to move.
Admittedly, some of the above rely on you having a landlord that isn’t shit.
I know a few people who could afford to buy a rather nice home, who instead seek out short term lease rentals to live in, so they can travel more and not need to be tied down to a specific place.
Edit: Also, the maintenance costs passed to the renter are dispersed across time as well, so they aren’t having to foot the full cost of say, a new fridge suddenly. In multi-tenant situations, the costs are dispersed across all tenants, so a person needing a laundry machine replaced is somewhat subsidized by everyone else paying in who doesn’t, kind of like insurance.