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What if the problem of poverty is that it’s profitable to other people?

theguardian.com

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Re: What if the problem of poverty is that it’s profitable to other people?

#321

Post by timedoctor »

I have over 15 houses that I rent to low income people. It's very difficult. Not at all a method of getting rich as claimed in the article. Constant problems with collections, problems with repairs and maintenance (given that the properties are old and were not well maintained).

I bought these 15 houses after the crash in 2008 as I thought it was the best investment possible with fantastic returns. IN fact I would have been WAY better off buying ONE house in the bay area and renting it to one well off person. I would have made a whole lot more in net rent and in capital gain.

So I think the premise of this article is completely wrong in the majority of cases. Renting to poor people is extremely difficult and a very easy way to lose money. Many states in the US are very favorable to tenants and not favorable to landlords. You also have to pay taxes, insurance.

Seriously if it was that easy everyone would do it. I thought it was an easy way to make money and I was wrong. Not horribly wrong as I did buy the properties very cheap, but still, not an easy way to make money.

Re: What if the problem of poverty is that it’s profitable to other people?

#322

Post by sokoloff »

yourapostasy wrote: post #295
sokoloff wrote: post #268

Earlier quoted context omitted.

Largely because of the "Dodd-Frank Wall Street Reform and Consumer Protection Act" of 2010. That's right, government protecting the people again; in this case, lease-options or lease-purchase agreements with a financing component where the purchaser is living in the property during the term are now deemed consumer financing arrangements (rather than real estate financing arrangements), which are subject to review by…

This is interesting. A quick search turned up an article [1] that outlined some of the difficulties with lease-to-own residences I wasn't aware of. However, the CFPB is likely on the losing side if the leases are structured as short-term rentals, terminable at any time, as Rent-A-Center has done [2]. This type of consumerism is likely to be self-correcting over generations of time; I'm seeing far less participation b…

No, I think it's much worse than that. There's a general sentiment that triple penalties are applicable (or a danger at least) if a seller is remiss in qualifying the lessee/optinee at the time the contract is struck. The idea being that if a few years down the road, the lessee can't qualify for a mortgage and loses all their option premium money, they've been taken advantage of. So, the only safe thing is to underwrite the lessee for a mortgage at the time the contract is written.

Hint: most of these people can't qualify for a mortgage, otherwise they'd just buy outright.

Re: What if the problem of poverty is that it’s profitable to other people?

#323

Post by ctdonath »

ubernostrum wrote: post #73
ctdonath wrote: post #52

Earlier quoted context omitted.

OK, say those "exploitive" businesses didn't exist. That doesn't subsequently mean "non-exploitive" alternatives would exist, it just means those customers/employees would have no options (not even "exploitive" ones). Is having no option better than having a bad option, when good options aren't available?

That doesn't subsequently mean "non-exploitive" alternatives would exist, it just means those customers/employees would have no options (not even "exploitive" ones). The hidden assumption here is that producing the goods and services required to keep a single human being alive in relative comfort (fed, sheltered, educated, healthy) necessarily requires an expenditure of manual effort roughly equivalent to what that h…

The reason "we have, here and now, the ability to feed, shelter, educate and provide health care to every single human being on the planet" is precisely because of capitalism: it's worth someone's time & resources to produce so much so efficiently. If those producers stopped, lacking incentive, global starvation would occur in about a week.

A key point you miss: wealth is perishable. Food rots. Weeds grow. Machines rust. Buildings crumble. Durable money is inedible, useful only when exchanged for something perishable.

You really need to read Atlas Shrugged. Comes a point when us producers get sick of you looters, and drop out of society. I'm already feeling enormous strain from my 30-50% tax bracket (most going to a welfare system you want), and debate switching lifestyle to the self sufficient farming I was raised on and which your utopia would receive 0% of.

Re: What if the problem of poverty is that it’s profitable to other people?

#324

Post by axelfreeman »

gear54rus wrote: post #211
herbetdangerbri wrote: post #80

Earlier quoted context omitted.

> they feel no remorse for taking advantage of someone else I don't understand what it means 'to take advantage of someone else' in the context of this thread. Is Starbucks taking advantage of me when I want a coffee by selling me a coffee? Is Elton John taking advantage of my desire to see him play live at my party and the fact that there is only one of him by charging me a million dollars to appear? Are the bus com…

Well that's pretty easy. The most obvious form comes from the good old (bs) saying that 'the real price is what the buyer is ready to pay' (feel free to correct me here as to actual form of that). Hiking up price to a drug (the shkreli story) would be an exploitation and not a 'normal economic transaction'. So would be buying time of some poor workers in China for a dime. And then selling what they make on a 10x marg…

But the decision to buy this overpriced shit is made by the people and not buy the companys. This seams like bad decisions if you have not that much money or want to spent it better.

The real problem are systems where rich people doen't have to buy so much taxes of automated productions or property.

Re: What if the problem of poverty is that it’s profitable to other people?

#325

Post by LoSboccacc »

jahnu wrote: post #308
LoSboccacc wrote: post #282

Earlier quoted context omitted.

We have those in Italy, as a counter point: it's amazing how fast those got occupied abusively and how local criminals use it to either hide their illegal workers or use it as bargaining chips to gain support and omerta from the population.

Sounds like a problem with law enforcement rather than anything else.

true, and goes to show how even the best ideas needs to be declined in the context of the other society issues a region has.

Re: What if the problem of poverty is that it’s profitable to other people?

#326

Post by facepalm »

mruniverse wrote: post #254
skybrian wrote: post #146

Earlier quoted context omitted.

If you took all their money away and dropped them in Africa I think they'd have a harder time. Yes, knowledge of social class issues (who you know and how to act to get people with money to trust you) can itself be used to make money, in the right environment . It doesn't mean that educating everyone to behave like the upper classes makes sense. Those skills may not actually work for people who don't look the part or…

The saying is about how it believes the rich get rich. Can they get rich if it was all taken away? The saying says yes. If you dropped them in Africa, yes they would have a harder time. But as a whole, probably get rich again.

Any data to support the "saying"?

Re: What if the problem of poverty is that it’s profitable to other people?

#327

Post by brianwawok »

anexprogrammer wrote: post #299
lazzlazzlazz wrote: post #284

Earlier quoted context omitted.

Artificially decreasing housing prices always creates shortages - that's already well understood. The more people who can take advantage of artificially lowered prices, the more pressure there is in other parts of the housing market to absorb excess demand. The cost of decreasing those housing prices are paid for somewhere else in the system.

Meanwhile using housing as much as an investment vehicle as housing (see London, SF, and numerous other cities) promotes the creation of shortages to drive up rents and capital gain. You can't seriously be saying that the housing market is working as intended in places where pushing 70-80% of the wages cannot rent a basic apartment there. The cost of those artificially inflated housing prices are paid for someewhere…

Well a sane person should cap housing expenses at 25% of income at most. If you can't afford a place, time to move. If you can't afford anyplace, minimum wage has a problem.

Re: What if the problem of poverty is that it’s profitable to other people?

#329

Post by cmdrfred »

unclebucknasty wrote: post #161
zdragnar wrote: post #135

Earlier quoted context omitted.

I believe that's called indentured servitude, and at least in the US, cannot be enforced by contract law.

> indentured servitude . No, it's not. And, I wouldn't dismiss out of hand what can be "enforced by contract law". The contract itself represents the willingness of two parties to adhere to certain terms. If a company pays you a million dollar signing bonus and asks you for a three year commitment, then you should expect them to demand that bonus back if you leave in two years for reasons not set forth by the terms.…

This will be abused. Mcdonald's will say that it's 'training' cost 10 grand and keep people on low wages without any recourse for the entire term of the contact. Rinse, repeat.

Re: What if the problem of poverty is that it’s profitable to other people?

#330

Post by jacobush »

LoSboccacc wrote: post #282
jakobegger wrote: post #266

Instead of giving money to poor people, who then have to spend it all on rent, why not provide affordable housing? In Linz we have something called "housing cooperatives" (the German word is "Wohngenossenschaften"). These cooperatives build apartments, and to rent them you become a member of the cooperative. The goal of these cooperatives is not to make a profit, but to provide affordable housing. And it's amazing ho…

We have those in Italy, as a counter point: it's amazing how fast those got occupied abusively and how local criminals use it to either hide their illegal workers or use it as bargaining chips to gain support and omerta from the population.

Counter counter point - is there much of anything official done in Italy which is not perverted by criminals/mafia? Seriously, not trying to be a dick.
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