Rent is inherently predatory
No it’s not. Just because you don’t like it doesn’t mean it’s inherently predatory.
I have to move to a city for 6 months, should I have to buy a house and sell it during that time? I need to rent, it gives me the flexibility without having to shell out capital or get in debt to live.
As with everything, it can be bad, especially when the government restricts building of houses so much, but my buddy buying a house, fixing it up and renting it out isn’t malicious.
What’s your alternative to renting? Government owns all houses and gives them out for people to live in for free?
Having social housing or low-cost rental housing owned by the government with an option to purchase does not sound at all bad.
We have social housing for low income people, is that not enough? Do we just need more? How much more?
https://en.wikipedia.org/wiki/Subsidized_housing_in_the_United_States
Have you heard of the term the ‘projects’ - it’s provided housing, but many of the subsidized housing areas are more like a 3rd world country than our prosperous 1st world country. Is this the policy you’d like more of?
My biggest head scratcher now that I’ve bought a house is “huh, my mortgage is locked in now, no matter what the market does… Why did rent keep going up if my landlord’s mortgages were locked in?”
I honestly don’t have a good answer, I could be looking at something perfectly explainable. But to me it seemed like they raised rent not because costs went up, but because they could. Why not. Everybody else is doing it.
Mortgages are locked in. Taxes, insurance, utilities, maintenance/upkeep are not. All of those things have increased since I bought my house a year ago. Rental properties experience the same thing.
My biggest head scratcher now that I’ve bought a house is “huh, my mortgage is locked in now, no matter what the market does… Why did rent keep going up if my landlord’s mortgages were locked in?”
Property taxes, market rate, costs to repair and maintain, interest rates increasing. How much money, beyond your mortgage, have you spend on your house since you moved in?
I would rather pay the cost of service to the government than my landlord’s mortgage
Just curious, why? What difference would it make for you? Many of these mortgages are government funded anyway. I don’t rent anymore but my government is far more inept and corrupt than any landlord I’ve ever dealt with. Just my experience though.
I would rather pay the cost of service to the government than my landlord’s mortgage
So you want housing as government controlled? How much? 100%? 80%? 50%? How much private residential property should be stolen by the government to achieve what you want.
That’s not really reflective of the market in reality. Rent in a competitive market (I.E. anywhere people want to live) tends to hover around the cost to own, buying with 20% down, plus property tax and mandatory homeowners insurance required by the mortgage holder.
In fact, usually it’s cheaper to rent than it is to buy with only 20% down and good credit.
This is because people do this calculation, come to the conclusion “it will cost us a little more, but we get to own our dwelling, our payments eventually go to principal (though this is rigged by the banks too), and hopefully the market goes up and we get equity”
Yes, the market fluctuates, particularly in economic crisis. But it teeters back and forth based on the costs to buy and rent. Because if rent exceeds the cost to buy, investors snap up property just to rent it out, and that raises demand on real estate to the cost goes up.
The rates going up as fast as they have when prices are still high have killed buying as an alternative to renting in my city.
I feel for people who weren’t “smart enough” to buy during the pandemic, because unless prices, rates, or both drop dramatically, it looks like they may have been permanently priced out of buying and renting is only getting less affordable.
I agree. It sucks all around right now for anyone on the market to rent or buy. We’re all squeezed. Only people that had the luxury of owning and/or capital and foresight to invest are happy right now.
The wealth divide has only increased substantially.
But that doesn’t mean that rent is “predatory” except in the cases of long time owners hiking rates when their costs have stayed the same. The reality is that rent is closely related to the current cost of buying at any given time.
Your use case reflects what I said exactly.
For someone to buy your condo today, they will be signing up for a mortgage whose monthly cost is near the going rent price. And most likely, more than the going rent price.
If they were to just buy and rent it out, they will likely be doing so at a loss.
The market going up or down after the purchase of the property is independent. It may go up, it may go down. That’s the gamble you make if you’re doing it as an investment.
Your experience happened to take place at an extraordinarily good time to already own property., and FOMO was certainly fueling the frenzy during the peak.
Whether that continues to be the case is unknown. Economists are all over the map.
It made you more rich on paper, but the reality is that you aren’t in the same boat as landlords. The reason is that if you live in your property in order to realize the profit on it you’ll have to sell it and move somewhere less expensive (i.e. somewhere likely less desirable).
Prices in real estate going up only really benefits real estate tycoons, the local government (depending upon location), and other side players in the market (e.g. real estate agents). For the rest of us, if you sell it just means that you have to turn around and buy in a more expensive market. Also (depending upon location, California properties aren’t completely re-assessed for taxes until they change hands) it hikes your taxes.
As a single property owner in California, I’m rooting for prices to drop so I can upgrade and still pay the same amount of taxes (or less).
I wouldn’t bet on it happening though.
