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Millions of Americans skipping payments as wave of defaults and evictions looms

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431–440 of 595 posts

Re: Millions of Americans skipping payments as wave of defaults and evictions looms

#431

Yet the S&P500 is still green. The Fed continues to print in order to delay the inevitable. Either a currency crisis or hyperinflation.

There is massive demand for dollars worldwide, specifically related to dollar denominated debt and commodities contracts and the first part is likely to get more intense if there is a global recession.

I'm a gold bug libertarian end the fed kind of guy and even I don't think we are at any risk for hyperinflation. That is definitely not to say these policies can't have seriously negative consequences but I don't think hyperinflation is one of them, at least not for the US in the next decade.

Re: Millions of Americans skipping payments as wave of defaults and evictions looms

#432

Earlier quoted context omitted.

Last time I rented from a private person, they asked me for some basic information. I sent them my last 3 pay stubs and a credit check in a short email. They accepted me on the spot, and said most people can't even manage to write a proper email.

What rental market is this? In big cities where the majority professional class rents competition has been stiff. I had to meet and interview with my last landlord about my career and income.

Los Angeles, North Hollywood. Super competitive.

Re: Millions of Americans skipping payments as wave of defaults and evictions looms

#433

I have a commercial tenant who was forced to shut down their business during the lockdown. I just waived rent until they were allowed to reopen. You can't get blood from a turnip, and I really don't want to force them into default and try to find another tenant in this environment anyway. Almost everybody is taking a haircut this year.

There's plenty of landlords in SF who think turnips bleed. There was a cafe that just closed permanently because the landlord wouldn't lower the rent, in a building bought 20 years ago for $1m where the gross rents are over $60k/month. You do the math.

... 12?

Re: Millions of Americans skipping payments as wave of defaults and evictions looms

#434
post #325

Earlier quoted context omitted.

Thanks for the kind words! I just did what it felt right I'm inclined to say that racism in Italy is different from the general notion of it: I mean, there are certainly racists in Italy, no point in denying that, especially towards some ethnicities (Africans, middle Eastern and South Americans in particular, they are considered too loud and unreliable - coming from us it's really something - and often also worse tha…

I only spent a month and a half in Italy, almost all of it in Milan, but I was around italian families a lot. The north south thing really seemed like a big deal, though obviously for some more of a joke than others, as you say. In at least half of the young families (kids aged elementary to high school) I was around in Milan, one or both parents were originally from the south. They spoke of it almost like how immigr…

There's a similar dynamic in South Africa between Cape Town and Johannesburg. Cape Town is tourism, tech and surfing, Johannesburg is industry (mining, smelting, utilities) and 'business'. Cape Town has even earned the nickname of Slaapstadt (Sleep Town), a play on Kaapstadt, the Afrikaans name.

Re: Millions of Americans skipping payments as wave of defaults and evictions looms

#435
post #385

Earlier quoted context omitted.

My understanding is that the appeal of owning real estate yourself is housing mortgages gives you: (1) the cheapest leverage available to retail investors and (2) a loan that can't be margin-called. In an upmarket, this leverage lets you juice your returns. Say you only have $200,000. Then by getting a mortgage of $800,000 you get ownership of a house worth $1M. This gives you the right to the cashflow from renting t…

Is there a reason why REITs can't themselves be leveraged? ie. taking out a mortgage to buy a house, just like an individual buyer.

Many are, but they're not typically 5:1 (or 33:1) no-recourse leveraged.

Re: Millions of Americans skipping payments as wave of defaults and evictions looms

#436
post #59

Earlier quoted context omitted.

Unfortunately, as part of the unfolding of the post 2008 recession, a lot of rentals shifted from individual or smaller landlords to larger corporate landlords whom take a much more impersonal approach to making it through the depression. To some degree, to the extent they can take out holdover loans and let rentals sit empty, they will do just that - irregardless of the social utility of compromise. https://www.thea…

Was a renter in 2008 and you are spot on. Same situation in the Bay area as well as NY/CT. It was insane that rents started to go up during that time. People basically walked away from their houses and started to rent. It was weird. Also, the "corporatization" of housing scared me a bit. Consider the area in downtown Mountain View. Rent was under 2K around 2008. The corporate landlords did minor renovations (fancy gy…

As a renter I honestly do not mind the corporatization.

When I’ve looked for apartments in the past I’ve seen almost no difference in rents (as advertised on Craigslist, apartments.com, Zillow) between large corporate landlords and small time landlords, except for very high end luxury apartments I’m not in the market for.

Yet I’ve heard countless horror stories about unresponsive/malicious small time landlords and very few about large landlords. To the contrary, while renting from large corporations I’ve found that my service requests are addressed very quickly, there’s almost always someone in the property management team I can talk to about anything, and everything operates smoothly.

Perhaps the “mom and pop” landlords only advertise via word of mouth but every time I’ve looked for apartments I’ve come away thinking that renting from those same large, faux-luxury (as opposed to unrenovated since 1985 for the same price) corporate landlords are the best deal when renting in expensive areas.

Re: Millions of Americans skipping payments as wave of defaults and evictions looms

#437
post #394
post #227

Earlier quoted context omitted.

Every time I see comments like this, and no direct offense intended, It always strikes me as coming from somebody who has never filed large insurance claims before. Been seeing this so much with riots lately, "oh you have insurance right, why you mad about your business getting destroyed?". If only it was that simple.

My dad was an insurance adjuster. He loved denying claims more than anything. "I'm not good at math, but I sure can subtract!" Fucker had a major power trip. Also had a slight anti-corporate bent, so he loved approving claims too.

He loved denying claims and he loved approving claims? How does that not completely cancel out, except perhaps for "he loves his job"?

Re: Millions of Americans skipping payments as wave of defaults and evictions looms

#438

I have a commercial tenant who was forced to shut down their business during the lockdown. I just waived rent until they were allowed to reopen. You can't get blood from a turnip, and I really don't want to force them into default and try to find another tenant in this environment anyway. Almost everybody is taking a haircut this year.

There's plenty of landlords in SF who think turnips bleed. There was a cafe that just closed permanently because the landlord wouldn't lower the rent, in a building bought 20 years ago for $1m where the gross rents are over $60k/month. You do the math.

This has been very much the case in UK high streets for the past few years (on and off since '08). In the county-town where I grew up a Starbucks (!?!) closed because the rents were too high. Even before the pandemic, a number of shops have closed down in the last year, so it will be interesting to see what's left 6 months post lockdown.

The only businesses in that town that have been booming are retirement homes... but after this I assume there will be a lot of empty properties.

Re: Millions of Americans skipping payments as wave of defaults and evictions looms

#439

I'm so extremely grateful that I accepted section 8 tenants into my rental units. Most of these tenants have nearly all of their payment covered by the government and they just have to pay $100 or $200 on top of that to cover what the government won't. These tenants are often not accepted by landlords because they're thought to cause more issues. Mine are great. They keep the units spotless, mow the lawn for me on my…

You should waive their fees for the duration of Corona, and refund any ones you've received! Just saying, it would be a great way to do some good, and they might get a lot more out of the 100/200 than you would!

Re: Millions of Americans skipping payments as wave of defaults and evictions looms

#440
post #203

Earlier quoted context omitted.

My simplified understanding is that this is what REITs are for. They're an investment vehicle for companies looking to build real estate they don't have the capital for. They raise through a REIT and you wind up with a dividend of some kind out of what they make from tenants. It minimizes the risk for a general investor. Disclaimer: I know very little about them, this is not a recommendation I probably have some deta…

My understanding is that the appeal of owning real estate yourself is housing mortgages gives you: (1) the cheapest leverage available to retail investors and (2) a loan that can't be margin-called. In an upmarket, this leverage lets you juice your returns. Say you only have $200,000. Then by getting a mortgage of $800,000 you get ownership of a house worth $1M. This gives you the right to the cashflow from renting t…

The tax treatment of directly owning real estate is also extremely favorable to landlords in the US, particularly mom-and-pop scale landlords. Many will have businesses which make an economic profit and many of that subset will positively cash-flow, but for tax purposes deemed depreciation will cause their business to operate at approximately break-even or at a loss (offsetting other income). Then, when they sell the property, they either get extremely favorable treatment on exchanging for other properties (to defer taxes until post-retirement), ability to exclude capital gains, or capital gains treatment on income which was effectively business income [0] (and would therefore ordinarily be taxed at a much higher rate).

[0] This might be a little weird to wrap your head around. Suppose I am a landlord and, over the years, depreciate a building by $200k. That is a "phantom" cost. On my balance sheet, it decreases my cost basis in the building and decreases my taxable profits from the rental business. When I sell the property, because I've shifted that rental income into depreciation, my cost basis has fallen, so my gain on sale rises by $200k, but that $200k is now taxed at 0~20% not plausibly 50%+ (top individual bracket + state taxes + self-employment taxes).

(I have somewhat better than casual understanding of this because my father worked in real estate all his life and other family run mom-and-pop real estate operations, but feel free to run past your friendly local tax advisors.)

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