Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

The Hot Property That’s Next on Tech’s Agenda: Real Estate

nytimes.com

Post reply on HN
Print view View original

81–90 of 92 posts

Re: The Hot Property That’s Next on Tech’s Agenda: Real Estate

#81

Post by ghaff »

michaelscott wrote: post #76
ghaff wrote: post #49

Earlier quoted context omitted.

>If the rent is more than the mortgage why would I rent? Because owning a property involves putting money down, maintaining, being exposed to market value fluctuations, etc. on a very expensive and relatively non-liquid asset. Sure, buying would mostly have been the right financial decision in the Bay area at least over the past decade for most people. But, especially if I don't want to deal with home ownership, can…

Of course in certain conditions it is preferable to rent (haven't laid down roots, still building the beginning of a career etc), but as a purely financial decision for a regular, long term domicile it doesn't make sense to pay a premium to not "deal with home ownership". It's not like running a business.

>It's not like running a business.

It sometimes feels that way :-)

I don't really disagree with you although the risk-adjusted finances of rent vs. buy are less clear than a lot of people make them out to be in the absence of 20-20 hindsight. Especially if you reach a point where you're fairly locked into an area for whatever reason, it mostly makes sense to buy if you can. If the work associated with owning a house is a big deterrent, there are lower-effort alternatives like many condos.

Re: The Hot Property That’s Next on Tech’s Agenda: Real Estate

#82

Post by karambahh »

r_smart wrote: post #64
karambahh wrote: post #53

Earlier quoted context omitted.

Depending on the local regulations, you can turn a (long term) profit while a rent inferior to the mortgage repayments. Can't get on the specifics as it varies country to country and even local regulations but as anecdotal evidence, I'm currently looking at a property in my hometown, with a mortgage of 80k€ (cost of mortgage 7k€, 10 years). This property would rent at 4000€/y, resulting in a yearly loss of roughly 40…

Assuming the laws don't change. Also, you're just externalizing the cost to everyone who pays taxes. Not my favorite business model, but carry on.

Absolutely, assuming the laws don't change.

Wrt "externalizing to eveyrone who pays taxes", you'd be absolutely right if I hadn't omitted, for brievity, the reason why you get such large tax breaks and subsidies: you undertake to rent at preferential rates (roughly 20% under market price). In effect, you run a small scale public housing operation.

The subsidies are related to rennovation works you specifically agree to pay for, obviously at the start of the project. The largest tax breaks are in effect at the start of the project as well so the risks, while they do exist, are very limited.

The biggest risk is that you buy a run down property (which rennovation you agree to finance) in a run down part of a town. At the end of the ten years, you might have a reasonable property that's unsellable because the area has tanked even further.

Re: The Hot Property That’s Next on Tech’s Agenda: Real Estate

#83

Post by ghaff »

ianai wrote: post #71
r_smart wrote: post #11

Earlier quoted context omitted.

>Rent shouldn’t be anywhere near comparable to mortgages. How am I supposed to rent you a house if the rent you pay is less than the mortgage I have on the house? How do I build a pool of money to use for repairing the things that inevitably break?

I’m more talking about renting an apartment vs owning a house. They’re fundamentally different goods/services but their dollar value tends to be closer than they should be. Renting a house shouldn’t be profitable or should be only slightly due to selling one very heterogeneous good. Apartments generally suck compared to owning a house. You’re literally paying to have a manager over you. You’ve probably got stairs to…

Lots of small landlords with a multi-family house they also live in also find having a tenant make sense--though there are of course problem tenants.

In general, rentals (other than vacation places) just aren't a very good fit for houses. People tend to buy houses in part because they want to adapt the house and property to what they want. A rental house would typically have to be furnished; otherwise no one's really going to really have the right furnishings for it. And houses generally have more complex maintenance needs than apartments.

People buy apartment-like or town house-like housing in the form of condos/co-ops because they're willing to trade off the space and freedom for reduced home ownership headaches. But most people renting don't want either the incremental cost of a house or the implications of filling up a house and dealing to at least some degree with a property.

Re: The Hot Property That’s Next on Tech’s Agenda: Real Estate

#84

Post by ghaff »

stephengillie wrote: post #78
acct1771 wrote: post #40

Earlier quoted context omitted.

Then you're perhaps not the target market. People with that kind of money, if they're dissatisfied, they just roll the dice again.

Is that market large enough in America to hit a critical mass?

Like most personal services, it's probably a niche. In a luxury, NYC apartment? Sure. As you note they exist. But most people see grocery delivery as a luxury. In fact, I suspect even lawn mowing and maid services are used by a relatively small proportion of the population. Much less having someone take your car to the shop or the various other myriad errands that are always piling up on my todo board.

Re: The Hot Property That’s Next on Tech’s Agenda: Real Estate

#85

Post by imglorp »

arkades wrote: post #29
imglorp wrote: post #21

Earlier quoted context omitted.

I just sold a house by myself and the line of people with their hand out is infuriating. Even more frustrating, for providing their automated gesture or nod of a service, they want a PERCENTAGE. For example, to just do all the paperwork, a realtor might offer a "transaction only" service for "only" 1%. Regardless of property value, it's the same paperwork and usually done by a clerk. I instead went to an honest (!) a…

You don't need an "honest" attorney to get that number. It's normal for RE attorneys to get a flat-ish fee, and RE agents to pull a percentage. And RE attorneys usually make And all paperwork and contracts are ultimately done by the lawyer. I have honest to goodness no idea why you involved a realtor at all if you were selling it by yourself. Their only job is to attract prospective buyers (read as: list your house o…

I didn't involve a realtor, I used the attorney. I just mentioned the realtor's price as comparison.

As a side note, they buyer _did_ have a realtor, who was notably annoyed that they were not dealing with a professional, but grudgingly agreed to take _their_ percentage. So I saved on mine at least.

Several providers would not talk to me at all, for example the home warranty provider needed some BS realtor ID to sell their product to you. I whined loud enough and they finally agreed to take my money. I think their system is kickback based and they didn't know how to make a sale without sending someone the gratuity.

Re: The Hot Property That’s Next on Tech’s Agenda: Real Estate

#86

Post by dragonwriter »

michaelscott wrote: post #75
dragonwriter wrote: post #70

Earlier quoted context omitted.

> If the rent is more than the mortgage why would I rent? Because the you don't have the savings for the downpayment to qualify for the mortgage with the payment at issue. Because property ownership cones with more expenses than just he mortgage, many of which remaining with the owner in most leases. Because no one is selling single units of the type you want at the time, but someone is renting them out. Because you'…

As with conveyancing or transfer fees, a downpayment can be negotiated into a mortgage loan. Extra expenses should remain with the owner, since it is their asset. Everything else you've mentioned would be a corner case at best and not applicable to the average person looking for somewhere to keep the rain off their heads.

> As with conveyancing or transfer fees, a downpayment can be negotiated into a mortgage loan

Sure, but it drives up the mortgage cost (both because the principal is higher and because interest rates are higher with lower downpayment), so the rent being higher than the actual landlord's mortgage doesn't mean that it is higher than your mortgage for an equivalent property purchased at the same time.

> Extra expenses should remain with the owner, since it is their asset.

Whethe it should or not, those costs can be a reason to prefer renting over ownership even with a slight premium of rent over mortgage cost.

Re: The Hot Property That’s Next on Tech’s Agenda: Real Estate

#87

Post by null000 »

ghaff wrote: post #56
dnomad wrote: post #39

Earlier quoted context omitted.

Pretty much this. Ziroom is pretty much the future of real estate. Real estate will be virtualized like every other illiquid asset. This means: * Ownership of real-estate gets rolled up into REITs. REITs are experts at building, buying and selling real-estate and they can do it at scale. "Home ownership" where small-time retail investors buy and sell real-estate will get selected away as its a grossly inefficient mod…

It takes a certain mindset on the part of the renter as well. You sort of have to have minimal physical stuff and be OK with moving into a largely standardized serviced apartment. In other words, the apartment is somewhere you drop your stuff and sleep in. It's not "your" place. There are corporate apartments in the US but these are usually oriented toward people who have their own place but have to spend a lot of ti…

It strikes me as a little disturbing that there's yet another company trying to move it's customers as far away from "owning" things as possible.

Re: The Hot Property That’s Next on Tech’s Agenda: Real Estate

#88

Post by LyndsySimon »

dragonwriter wrote: post #62
dyeje wrote: post #61

Earlier quoted context omitted.

The renter also isn't assuming responsibility for keeping the property in repair. The owner assumes all the risk.

> The renter also isn't assuming responsibility for keeping the property in repair. That depends on the terms of the lease.

It’s pretty standard for residential leases in the US, though.

Re: The Hot Property That’s Next on Tech’s Agenda: Real Estate

#90

Post by dragonwriter »

LyndsySimon wrote: post #88
dragonwriter wrote: post #62

Earlier quoted context omitted.

> The renter also isn't assuming responsibility for keeping the property in repair. That depends on the terms of the lease.

It’s pretty standard for residential leases in the US, though.

It's pretty standard for residential leases for at least some maintenance responsibilities to be assigned to the tenant (I think that it tends to be more of them assigned this way for leases of detached single-family homes than for apartment leases.)
Post reply on HN