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

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

#481
post #90

Earlier quoted context omitted.

> when things come easy to people I think you have a very misguided idea of what it's like to live in poverty.

I think you have a very misguided idea of what it's like to be a landlord....and perceptions of who/what 'landlords' (a very unfortunate term) are from some tenants... no good deed goes unpunished etc. Plenty of great people around but you have to be very careful who you rent to...

For most of my adult life (now I'm 34) I have spent 30-50% of any paycheck I've received on rent.

In my country (Ireland) over the previous two generations, houses went from dirt cheap to extremely expensive. In the generation that came of age in the late 80s and early 90s, you could work a normal job and buy a house, easily. If you had a good job, you could buy several houses.

Now, my generation. We came too late. Houses now cost so much that you will be en-debted to a bank for life if you buy one. Now we have a rent crisis. For many people, they can barely even afford to rent a house and buy basics like food. Meanwhile, anyone who was lucky enough to be a bit older and smart enough to jump on the property wagon when it was cheap, they are rolling in money. They earn thousands of euros from doing essentially nothing except be born in the right generation.

It's very hard not to look at them, look at the hardships of the people my age who struggle to pay rent, and not think of landlords as social parasites.

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

#482
This is one of those cases when delaying solving a problem can turn out to be a good thing. And in the end, a jubilee (debt forgiveness) might be inevitable. Which is likely to be a good thing too, especially if it covers student loans and other things that aren't cleared by bankruptcies.

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

#483

Earlier quoted context omitted.

In Europe we are using lockdowns to get infections sufficiently low to do test, trace, and isolate - with eradication as the ultimate objective.

It won't be irradiated without a vaccine or an absurd amount of testing. Too many people have either no symptoms or minor symptoms. Between that and a potentially long incubation period, it'll keep lurking around.

That's fine, as the measures can be tightened again if a new wave starts to rear its head. We can see this much earlier now with all the testing so the dampening measures will be much shorter and cheaper and more localized. Until the vaccine arrives.

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

#484

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…

There is a real problem with the situation though. And I want to distinguish between the decision you've made, which are savvy, and the broader picture where this showcases some of the more unfortunate elements of socialism.

It is a terrible outcome if millions of Americans are about to go broke and the relative winners are people who (a) totally rely on government handouts and (b) rely on people who are totally reliant on government handouts.

This story points to a situation where a rational person would rather be involved in ventures that produce less resources than they consume. That will really start to hurt the absolute measures of prosperity if it persists for long.

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

#486

Earlier quoted context omitted.

I think you have a very misguided idea of what it's like to be a landlord....and perceptions of who/what 'landlords' (a very unfortunate term) are from some tenants... no good deed goes unpunished etc. Plenty of great people around but you have to be very careful who you rent to...

For most of my adult life (now I'm 34) I have spent 30-50% of any paycheck I've received on rent. In my country (Ireland) over the previous two generations, houses went from dirt cheap to extremely expensive. In the generation that came of age in the late 80s and early 90s, you could work a normal job and buy a house, easily. If you had a good job, you could buy several houses. Now, my generation. We came too late. H…

This is a problem for our generation actually. The two generations before us became rent seekers about everything and from what I can see %90 of current population is unable to acquire significant income to buy anything meaningful. We are going back to feudal times, with minority of population owning everything and others paying for the privilege of using them.

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

#487
post #474

Earlier quoted context omitted.

> Plenty of great people around but you have to be very careful who you rent to... This goes both ways. You have to be careful who you rent from, too. Of all the investment opportunities available to people, I'm not particular sympathetic to purchasing property to seek rents.

When we talk about 'rent seeking' it's usually not about actual rental of property, which fills a very real need in society. Maybe it's different in other parts of the world but where I live, rent seldom covers the mortgage on a property, let alone all other expenses. The profit, if any, generally comes from capital gains when selling the property (which right now isn't on the cards for pretty much anyone.)

> rent seldom covers the mortgage on a property

Don't forget that "covering the mortgage" involves building the landlord's equity, so it's not as if this portion is lost to the bank while the landlord has to depend on appreciation. If I "only just cover the mortgage" while renting for the entire term of the mortgage on a house that doesn't appreciate above inflation, the landlord still goes from owning 20% of a house to 100% of a house over that term.

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

#488

Earlier quoted context omitted.

I think you have a very misguided idea of what it's like to be a landlord....and perceptions of who/what 'landlords' (a very unfortunate term) are from some tenants... no good deed goes unpunished etc. Plenty of great people around but you have to be very careful who you rent to...

> I think you have a very misguided idea of what it's like to be a landlord Landlords are essentially social parasites, that extract economic benefit without producing anything of value.

Providing a place to live for people has no value?

What a ridiculous assertion.

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

#489

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.

We have small scale commercial tenants and halved their rate and extended terms. Would rather retain tenants we like than play hardball and risk having to find new ones. Over the last couple of months, we've lost one tenant (half rate) but gained two (full rate).

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

#490
post #376

Earlier quoted context omitted.

> Meanwhile stock market is preparing to for its record high :) Yes, and I don't understand it. The S&P500 is within 8% of its all-time high (3393). Even without a second wave of coronavirus cases and deaths, the current levels of unemployment, defaults, and bankruptices, I can't see what supports these asset price levels. Any ideas?

The average P/E ratio for SPY companies is around 15. The price of the stock today is built on the earnings of the next 15 years, and most investors seem to believe we'll bounce back in a year or two.

Good investors don't rely on P/E ratios. At this point, GAAP earnings are basically becoming smoke and mirrors:

https://www.forbes.com/sites/greatspeculations/2018/11/19/pe...

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