this post was submitted on 09 Dec 2024
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No Stupid Questions

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Reason I'm asking is because I have an aunt that owns like maybe 3 - 5 (not sure the exact amount) small townhouses around the city (well, when I say "city" think of like the areas around a city where theres no tall buildings, but only small 2-3 stories single family homes in the neighborhood) and have these houses up for rent, and honestly, my aunt and her husband doesn't seem like a terrible people. They still work a normal job, and have to pay taxes like everyone else have to. They still have their own debts to pay. I'm not sure exactly how, but my parents say they did a combination of saving up money and taking loans from banks to be able to buy these properties, fix them, then put them up for rent. They don't overcharge, and usually charge slightly below the market to retain tenants, and fix things (or hire people to fix things) when their tenants request them.

I mean, they are just trying to survive in this capitalistic world. They wanna save up for retirement, and fund their kids to college, and leave something for their kids, so they have less of stress in life. I don't see them as bad people. I mean, its not like they own multiple apartment buildings, or doing excessive wealth hoarding.

Do leftists mean people like my aunt too? Or are they an exception to the "landlords are bad" sentinment?

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[–] [email protected] 4 points 3 days ago* (last edited 3 days ago) (1 children)

Based on the amount of vitriol I've personally received on this site for renting one property while I am temporarily relocated to attend school, the answer is yes.

For some reason everyone views being a landlord as easy money. But in reality returns on investment are worse than the stock market for being the landlord of a single family home.

Edit: Isn't it funny how the critics below didn't even ask questions about a specific situation where it does make sense to rent out an owned home? Instead of trying to understand why someone might make the choice they make, they sling insults and make wide sweeping assumptions to reinforce their skewed world view. Honestly it's this shit that's why Trump won. Leftists can't see the forest for the trees and are willing to engage in ever escalating purity tests that only alienate other sympathetic voters to leftist causes.

I worked hard to be able to own my own house. Saved money and took out a loan. I never received a penny from my parents or some inheritance from a family member that died. A greater return on investment can absolutely be made by investing in the SP500, returns on investment for single family homes will be worse. The SP500 can be expected to rise an average of 10% per year. A single family home on the other hand will increase by 4.3% per year. With interest rates being higher than that level appreciation, there is effectively no profit from the leverage that can be typically seen by borrowing money. Renting is typically 37% cheaper than buying on a month-to-month basis. Owners don't expect to Break-even on a home until after 5-10 years of ownership (depending on the city). Over 2/3 the cost of a mortgage go towards loan interest and taxes. Now what does a house get you then if there are all these downsides? Freedom. Freedom to decorate how you choose. To remodel, to build a deck, install Ethernet throughout the house, add an extension. But most of all, it gives long-term stability. After that 5 year period where a homeowner is taking a loss because of buying, they are finally ahead financially of a renter. This is why it doesn't make sense to sell a home due to short-term circumstances, because owning a home is inherently a long-term benefit. Especially when one loses 10% of the the value of a home selling it when it would take 3 years for the home to even grow to the point where that cost is covered by increases in home value, which is not even remotely guaranteed, as evidenced by home values only increasing 0.12% after falling by 5% the previous year.

[–] [email protected] -5 points 3 days ago* (last edited 3 days ago) (2 children)

For some reason everyone views being a landlord as easy money. But in reality returns on investment are worse than the stock market for being the landlord of a single family home.

Then sell it, and put your money into the market. Now you're no longer a parasite, and you're making more money. Win/Win.

If that's not a reasonable option, then what are you not counting in the entire return on your investment?

Edit: in response to your lengthy edit, I will note that you have expanded your "return" to include more than just the financial benefits. I will focus on one thing:

Now what does a house get you then if there are all these downsides? Freedom.

Correct. You are gaining freedom, literally at the expense of a tenant. That is exactly what we are talking about when we say that landlording is parasitical. They are buying your "freedom" rather than their own.

[–] [email protected] 3 points 3 days ago (2 children)

Maybe I want to move back into it... And selling has a 10% cost after realtor fees and closing fees.

[–] woop_woop 2 points 3 days ago

So then it's not worse?

[–] [email protected] -3 points 3 days ago (1 children)

If you are operating rationally and you actually believe your ROI on the rental property is lower than the stock market, you would transfer your wealth to the market. Since you are not, you are either behaving irrationally, or you don't actually believe your ROI is lower than the market.

Your ability to move back into the property is a return that you have not included in your evaluation. The 10% cost of selling is a sunk cost fallacy.

[–] TrickDacy 1 points 3 days ago (1 children)

Yikes, what a nightmarishly unempathetic take on this situation

[–] [email protected] 1 points 3 days ago* (last edited 3 days ago) (1 children)

Emotionless is the better term. I am trying to focus on the argument. I am assuming the best intentions of the parent commenter.

Parent comment argued they were making less money from renting than they would from investing in the stock market. They could be making more money elsewhere. Think about that for a moment:

  • They have the option of making $100 from the customers of a business. They could buy shares of a company making luxury products. Their return on their investment could come from people using disposable income to make discretionary purchases.

  • Instead, they are making $90 from a tenant's housing budget. (They are also creating extra demand on the housing market, inflating prices in that market, thus increasing costs for every person seeking housing, including their own tenant.)

Somehow, that actually seems worse to me. If money was the point, they'd choose the option with the higher return. If they are choosing a "rent" option, then that is either the option with the higher effective return, or they are acting irrationally, or they are paying for the privilege of exploiting a tenant.

Regardless, all three cases demonstrate the parasitical nature of landlording. The argument in the parent comment does not rebut a claim of parasitism.

[–] TrickDacy 1 points 2 days ago (1 children)

Emotionless is the same thing as what I said. They are describing people struggling to make a living, you're rejecting the human aspect and judging them

[–] [email protected] 1 points 2 days ago

Unempathetic implies a certain disdain or malevolence toward the plight of the parent commenter.

Emotionless does not.

My judgment and contempt is reserved for the concept of renting, not the parent commenter's condition or actions.