Housing is also a mirror of the human souls.
Housing is at the root of many of the rich world’s problems (2020)
721–730 of 817 posts
Re: Housing is at the root of many of the rich world’s problems (2020)
#722Re: Housing is at the root of many of the rich world’s problems (2020)
#723Earlier quoted context omitted.
The rebuttal by mminer237 is much closer to right [0]. Also it isn't even as good as mminer237 mentions, as many states also have a much lower exemption, and there is work in congress to get rid of the step-up in basis (a bad thing, imo) and to reduce the $12MM lifetime gift & estate exemption (a very good thing). So yes, there are some advantages, but OP is vastly exaggerating as if it is some freebie to landlords w…
It may not be a freebie for landlords, but it is much more "cost neutral" or "tax neutral" to own an investment property than to own a primary residence. Consider: Investment property: * Deduct maintenance costs * Deduct insurance costs * Deduct property taxes * Deduct mortgage closing costs * Deduct mortgage interest * Deduct HOA dues * Deduct property management fees * Take advantage of depreciation deductions * Av…
Those are business expenses.
> Avoid paying cap gains taxes on sale using 1031 exchanges
This is deferring the tax, not avoiding it.
Re: Housing is at the root of many of the rich world’s problems (2020)
#724Earlier quoted context omitted.
>"Did they become silly rich? Or did they quit because it is a major problem to actually make it very profitable versus other uses of capital and time? I'm a decently saavy investor (in many things), and have watched multiple friends start up rental properties, only to stop once it became clear that tenants destroy things, costs to maintain properties are volatile and astronomical, the work required is significant, a…
>>Most landlords I have met buy properties and then outsource their administration to property management companies. And the cost of buying a property and outsourcing its maintenance is 0 right? The landlord magically pulls a home out of thin air and some group of people maintain for them for free? >>Landlordism is parasitic in the literal sense of the word. Landlords get rent and capital appreciation for doing nothi…
> The landlord magically pulls a home out of thin air and some group of people maintain for them for free?
The building-lord should receive some return for their investment, as they have created value and added to it through maintenance.
The land-lord receives return for doing no work, no addition of value, and only through extracting the excess economic rent from their tenants.
Unfortunately, conversations around property investment and land taxes and so on tend to derail because the land-lord and building-lord are often the same person. The response to "the landlord is a leech on society" is "no, he built a house and maintains it!", but in reality it is "the land-lord is a leech on society, the building-lord is a contributor to society".
Re: Housing is at the root of many of the rich world’s problems (2020)
#725Earlier quoted context omitted.
It provides a large artificial financial incentive to hold onto a property that you otherwise would sell. I also think it's not right to create this kind of arbitrary, large tax break that only applies in specific circumstances. I think if we're going to have a capital-gains tax (and maybe we shouldn't), then we should keep it simple and not have carve-outs. If I sell my house while I'm on my death bed, I pay all the…
> It provides a large artificial financial incentive to hold onto a property that you otherwise would sell. Maybe I'm cold-hearted, but "make it someone else's problem after I die" seems like a pretty decent incentive not to sell.
> "make it someone else's problem after I die" seems like a pretty decent incentive not to sell.
I'm not sure it is a problem -- it just affects the true value of the property/asset.
Re: Housing is at the root of many of the rich world’s problems (2020)
#726Earlier quoted context omitted.
It may not be a freebie for landlords, but it is much more "cost neutral" or "tax neutral" to own an investment property than to own a primary residence. Consider: Investment property: * Deduct maintenance costs * Deduct insurance costs * Deduct property taxes * Deduct mortgage closing costs * Deduct mortgage interest * Deduct HOA dues * Deduct property management fees * Take advantage of depreciation deductions * Av…
Of course there are more deductions when an object is a BUSINESS instead of a piece of PERSONAL PROPERTY. No, it does not seem the slightest bit lopsided. There is zero difference between the deductability of expenses you mentioned and expenses for any other business. Businesses are generally taxed on their PROFITS , which are [INCOME] MINUS [COSTS]. The regular homeowner is not running a business. The same thing is…
Rent extraction from the underpriveleged for basic needs in a deliberately skewed market is hardly "business", it's raw exploitation at the systemic and the social level. Justify your habit of cannibalism however you may.
Re: Housing is at the root of many of the rich world’s problems (2020)
#727Earlier quoted context omitted.
> Here is a starter list of things a house will need over the course of 30 years. My house is 25 years old (bought it new) and from your list, the only things I've done is exterior paint and water heater. I've also done cosmetic landscaping but that was strictly optional, as I like to work on the yard.
Factors also depend on the age of the house and your location - harsher climates are much worse on various house factors. A new house will have much less costs to maintain over 25 years than a 50 years old house. Having owned a few houses (both relatively new), and having gfs with houses and seeing the stuff they've done, and with helping my mom and sister with their house decisions and fixing, the list above is not…
Maintenance costs strongly depend on how handy the owner is and how much they're willing to pay for more modern upgrades.
Re: Housing is at the root of many of the rich world’s problems (2020)
#728Earlier quoted context omitted.
> Housing is (along with healthcare in the US) a big part of why most people in the so-called "rich world" are in fact dismally poor, only one missed paycheck or turn of bad luck away from life becoming unlivable. Not really. Let's set up a quick boundary condition. Since you mentioned most people, you're talking about the lower-middle and middle classes. Let's keep the discussion on them. The working poor have it ba…
People will naturally spend beyond their capabilities, and the entire market is built around this (loans for everything is standard now). The ONLY way to prevent this is to either stop offering loans or force savings in some way (taxes, etc). But apparently both those options are off the books.
> The ONLY way to prevent this is to either stop offering loans or force savings in some way (taxes, etc). But apparently both those options are off the books.
This is how the system is actually designed. Social security is a mandatory annuity/savings and disability insurance program. Many countries also have mandatory contributions into their 401K (OECD Pillar 2) equivalents.
Even in the US, where these contributions are mandatory, the tax code is set up to make them extremely desirable for the employer and the employee.
> loans for everything is standard now
Stopping this would be as simple as having an indebtedness line added to the tax code. In many countries, there is a maximum level of debt that a person is allowed to carry. Companies aren't allowed to issue new debt if the repayment for all of their current debt exceeds some percentage of their income.
Re: Housing is at the root of many of the rich world’s problems (2020)
#729Earlier quoted context omitted.
As a home-owner not landlord (I am against the idea of owning more property than my family will use) I WISH I could write off half of my property tax.
When you are the owner/user and not the landlord you should be paying the taxes because most of the taxes are for use in the local community and most of that is schooling. The landlord gets no benefit from the majority of that stuff. The tenant does.
well there's the benefit of having higher educated and presumably higher paid tenants.
Re: Housing is at the root of many of the rich world’s problems (2020)
#730Earlier quoted context omitted.
> Housing is (along with healthcare in the US) a big part of why most people in the so-called "rich world" are in fact dismally poor, only one missed paycheck or turn of bad luck away from life becoming unlivable. Not really. Let's set up a quick boundary condition. Since you mentioned most people, you're talking about the lower-middle and middle classes. Let's keep the discussion on them. The working poor have it ba…
| but it's not orders of magnitude higher. It is about 2-3x higher, which is not an order of magnitude, but is less than an order of magnitude away from being an order of magnitude. Not, in any way, comforting unless our outcomes are 2-3x better, which they are not.
> It is about 2-3x higher
It's really not, at least when you compare OECD countries with one another.
For instance, per capita healthcare spending in the US is 11.4K. The OECD average is around 5.7K
Now, there are a lot of reasons for this gap:
1. Salaries are higher in the US. Health care workers are much better compensated there than, say, in France or Spain.
2. The US has a much lower population density. There are a lot of fixed costs with health care. There are real cost advantages to having a large majority of your population in dense urban areas.
3. The US is first to market/first to adoption for a lot of medical innovation. The R&D costs for anything health care related are enormous. Early adopters bear the brunt of these costs.
4. The US has a hybrid health care model. The two countries that use this model, the US and Switzerland, are one and three respectively for per capita health care spending.