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Rising Rents Are Pushing More Tenants Past the Breaking Point

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Re: Rising Rents Are Pushing More Tenants Past the Breaking Point

#41

Post by sp332 »

savanaly wrote: post #21
_wc0m wrote: post #9

Rent is an amazingly effective means of redistributing wealth upwards. I have easily paid over £100k rent in my life, always to people substantially richer than I am. Always enjoyed this Churchill quote - from 1909! Roads are made, streets are made, services are improved, electric light turns night into day, water is brought from reservoirs a hundred miles off in the mountains -- and all the while the landlord sits s…

If this is true, why is the return on owning land not better than the return on the stock market, at least in the estimation of most economists? Unless you have some comparative advantage in owning/administering to land, it's not actually such a sweet deal relative to normal investing. Owning land is "free money" in that you tie up your wealth and in exchange get interest. Same deal with owning stocks. Land isn't spe…

http://www.investopedia.com/ask/answers/060415/what-average-... "By any measurement, the real estate sector has outperformed the overall market, even factoring in the drastic collapse in housing prices during the 2008 financial crisis." (I'm not an expert but I recall hearing that much of the recovery from the recession went to real estate owners.)

Re: Rising Rents Are Pushing More Tenants Past the Breaking Point

#42

Post by vermontdevil »

refurb wrote: post #15
_wc0m wrote: post #9

Rent is an amazingly effective means of redistributing wealth upwards. I have easily paid over £100k rent in my life, always to people substantially richer than I am. Always enjoyed this Churchill quote - from 1909! Roads are made, streets are made, services are improved, electric light turns night into day, water is brought from reservoirs a hundred miles off in the mountains -- and all the while the landlord sits s…

I guess it depends where you live. Not all landlord make money on their property. I've had two landlords so far that lost money on their properties due to a combination of falling home prices and a depressed rental market. It was actually a wealth transfer from them to me!

They may have lost money but they got their $ elsewhere (tax write offs etc)

Re: Rising Rents Are Pushing More Tenants Past the Breaking Point

#43

Post by vkou »

_wc0m wrote: post #9

Rent is an amazingly effective means of redistributing wealth upwards. I have easily paid over £100k rent in my life, always to people substantially richer than I am. Always enjoyed this Churchill quote - from 1909! Roads are made, streets are made, services are improved, electric light turns night into day, water is brought from reservoirs a hundred miles off in the mountains -- and all the while the landlord sits s…

If I understand correctly, in the United Kingdom, there are no property taxes. Instead, there are council taxes - but they are paid by the tenant, not the landlord!

Now, while most of the rest of the world has property taxes, I would argue that they are far too low.

Re: Rising Rents Are Pushing More Tenants Past the Breaking Point

#44

Post by moultano »

mindcrime wrote: post #20
_wc0m wrote: post #9

Rent is an amazingly effective means of redistributing wealth upwards. I have easily paid over £100k rent in my life, always to people substantially richer than I am. Always enjoyed this Churchill quote - from 1909! Roads are made, streets are made, services are improved, electric light turns night into day, water is brought from reservoirs a hundred miles off in the mountains -- and all the while the landlord sits s…

So what's your point? Do you want to eliminate rent? Should people who either can't afford to purchase a house, or who simply don't want to, be forced into homelessness? Personally I've paid over $115,000 in rent over the past 12 years, but I don't begrudge my landlord their money. I attained utility in exchange for the rent I paid, and have no problem with the arrangement. Not, of course, to say that I'm happy when…

Land Value Tax. https://en.wikipedia.org/wiki/Land_value_tax

This is distinct from a property tax in that it only measures the value of the soil it sits on, so doesn't punish the landlord for improvements. The value of the land itself is almost entirely outside of the landlord's control, it's determined by the community around it. As a result, this is one of the least distortive taxes.

Re: Rising Rents Are Pushing More Tenants Past the Breaking Point

#45

Post by quickthrower2 »

_wc0m wrote: post #9

Rent is an amazingly effective means of redistributing wealth upwards. I have easily paid over £100k rent in my life, always to people substantially richer than I am. Always enjoyed this Churchill quote - from 1909! Roads are made, streets are made, services are improved, electric light turns night into day, water is brought from reservoirs a hundred miles off in the mountains -- and all the while the landlord sits s…

The £ sign tells me you are trapped in the overpriced housing country, forced to watch Kirstie Allsop be all smug about house prices.

I wonder what if lots of people said f the rent, f the prices let's just go travelling, live in a caravan, enjoy life. Settle in an affordable country. Not be a sheep toiling away to pay for someone else's Ferrari.

Re: Rising Rents Are Pushing More Tenants Past the Breaking Point

#46

Post by notyourwork »

leggomylibro wrote: post #22
maxxxxx wrote: post #6

Seems the economy is finding the sweet spot where education, housing and health extract the maximum amount of money from people right before they break. Finding that spot while a avoiding a revolution has been the biggest challenge for ruling classes throughout all of history.

No wonder everyone is offing themselves with heavy narcotics these days! ...uh, not to make light of the huge issue we have with addiction, but you gotta feel like prospects might help peoples' moods.

I absolutely agree, money solves a lot of problems. Knowing that you can afford to pay your bills, knowing you can eat out and stretch your budget without breaking the bank next paycheck removes so much stress and frees you to focus on other things.

Constantly worrying about money, bills and what you can and cannot afford to do is brutal. Watching peers enjoy life makes it easier for you to stretch your credit card a bit more to "enjoy" a temporary moment of time you will undoubtedly pay heavily for in future.

It seems to be a vicious cycle and makes it more easy to neglect long term like retirement planning and savings.

I'd guess this problem will compound itself in about 20 years when this large swath of people reaches retirement age with no equity, no retirement and perhaps still lots of debt.

Re: Rising Rents Are Pushing More Tenants Past the Breaking Point

#47

Post by refurb »

vermontdevil wrote: post #42
refurb wrote: post #15

Earlier quoted context omitted.

I guess it depends where you live. Not all landlord make money on their property. I've had two landlords so far that lost money on their properties due to a combination of falling home prices and a depressed rental market. It was actually a wealth transfer from them to me!

They may have lost money but they got their $ elsewhere (tax write offs etc)

The tax write offs helped, but they still shouldered most of the loss. And we're not talking a few thousand, but rather $100K+.

As a renter, it was great to just be able to pack my stuff up, turn in the keys and let them deal with the financial implications.

Re: Rising Rents Are Pushing More Tenants Past the Breaking Point

#48

Post by vkou »

billmalarky wrote: post #40
_wc0m wrote: post #9

Rent is an amazingly effective means of redistributing wealth upwards. I have easily paid over £100k rent in my life, always to people substantially richer than I am. Always enjoyed this Churchill quote - from 1909! Roads are made, streets are made, services are improved, electric light turns night into day, water is brought from reservoirs a hundred miles off in the mountains -- and all the while the landlord sits s…

> He renders no service to the community, he contributes nothing to the general welfare, he contributes nothing to the process from which his own enrichment is derived. The value landlords provide is the assumption of risk. The premium you pay to rent is in exchange for vastly limiting your exposure to said risk. This is why offloading the risk onto creditors (ie purchasing real estate with borrowed money under an LL…

> The value landlords provide is the assumption of risk. The premium you pay to rent is in exchange for vastly limiting your exposure to said risk.

In hot housing markets, the value they provide is having access to the capital necessary to own property.

A 30 year old hairdresser in Seattle isn't renting because they don't want to deal with risk - they are renting because they can't save up a $XY,000 downpayment, and tie their entire salary into interest payments.

Mind you, the capital requirements for property ownership are pretty insane, and our low interest rates really don't help matters any (Home prices have ballooned, in part, thanks to them.)

Re: Rising Rents Are Pushing More Tenants Past the Breaking Point

#49

Post by bko »

_wc0m wrote: post #9

Rent is an amazingly effective means of redistributing wealth upwards. I have easily paid over £100k rent in my life, always to people substantially richer than I am. Always enjoyed this Churchill quote - from 1909! Roads are made, streets are made, services are improved, electric light turns night into day, water is brought from reservoirs a hundred miles off in the mountains -- and all the while the landlord sits s…

I don’t think many landlords get rich from rent but housing appreciation. Real estate cap rates are generally very low, especially in places where rents are high. Take nyc for example. If you look at what someone pays for rent and take an estimate as to what the apartment is worth and estimate mortgage and taxes you’ll see that the rent often doesn’t even cover the mortgage.

For instance in manhattan you can get a cheap studio for maybe 2,200 a month. That studio would cost easily 600k, and at 4% interest (higher for investment property) the monthly payment not including taxes and maintenance is nearly 3k. That’s not even mentioning other barriers like the fact that a condo would likely be double the price and a co op would likely prevent you from renting and require a large down payment.

Re: Rising Rents Are Pushing More Tenants Past the Breaking Point

#50

Post by to3m »

moultano wrote: post #44
mindcrime wrote: post #20

Earlier quoted context omitted.

So what's your point? Do you want to eliminate rent? Should people who either can't afford to purchase a house, or who simply don't want to, be forced into homelessness? Personally I've paid over $115,000 in rent over the past 12 years, but I don't begrudge my landlord their money. I attained utility in exchange for the rent I paid, and have no problem with the arrangement. Not, of course, to say that I'm happy when…

Land Value Tax. https://en.wikipedia.org/wiki/Land_value_tax This is distinct from a property tax in that it only measures the value of the soil it sits on, so doesn't punish the landlord for improvements. The value of the land itself is almost entirely outside of the landlord's control, it's determined by the community around it. As a result, this is one of the least distortive taxes.

Blog rebutting many common arguments against a land value tax: http://kaalvtn.blogspot.co.uk/p/index.html
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