Yeah, I saved up money for years, put it all on a building (which the bank actually owns until I’m in my 70s), which I maintain basically to break even (I don’t make a profit on the rents), and I take on all the risk but, yeah, I’m horribly taking advantage of people and I should feel bad about it and not “gloat” about doing so.
Their risk is they might have to find a new place to rent if they don’t like my place (I can’t kick anyone out legally nor raise their rent beyond what the rent control board says I’m allowed to do) and my risk is…everything to do with owning the building, maintaining it, and what happens if they destroy it or it burns down, etc. Clearly, I’m a villain along with every other American family that saves up to buy a building they don’t happen to live in.
No, I don’t feel bad about it. I’m 20+ years into a good career (as is my wife) and we’re planning for our future. Sorry if success is something for which we should be ashamed.
I shouldn’t be surprised when classism or hatred of people doing well financially rears its head here but, as people have made it clear to me in private remarks, anyone on this forum who does do well had better keep quiet about it or they’ll get this sort of reaction.
Yeah, I have an estranged partner. She is my best friend, and I will be damned if she is left with nothing. So my own choice, I love her and won’t leave her homeless.
I am I’m a very similar financial situation to you–i have a rental, but aren’t rich. As in I have (checks bank account) a few months of standby. And I’m 37. I’ve done it wrong
I am part owner of a house in the UK. It was 45,000 GBP in 2003, so my brothers and I used our share of our grandparents’ inheritance and some extra savings to buy it. We’re renting it out at the moment as nobody lives in that area. We’ve actually had a good relationship with anyone who’s been there, mainly because it tends to be people we already knew or heard of through word of mouth.
We’re also renting in Germany, and have some great landlords who live in the house in front of us. They aren’t rich, they just all had plumbing/tiling/electrical jobs, live together with three generations in one house and built our house themselves. They would be entitled to charge more rent and there are plenty of people who would like to buy the house, but we were recommended by the last tenants and they would prefer to have good neighbours than more profit.
I don’t really get this attitude toward landlords. We were very lucky to be able to buy a house, but there’s no way we could afford one where we want to live at the moment. Renting gives us the opportunity to live somewhere for a shorter term, without risking too much money and without having to borrow any. I’m glad people like @albill are there, I wish there was a stronger middle class with more people able to make investments like this.
I too got lucky. Right place, right time, right price. And like you I am going back to renting cause… That’s just how life works. I hope in ten years I see this as a good investment, but you really never know.
What I hate most about owning a place others live in… The tenants tend not to care about things that were important or sentimental to you. For example, the peeps that just moved out killed my rose garden. Now most would say, “not a big deal, comes out of their deposit”. But I planted every one myself and they were special to me. And not to them.
There is. Turnover and burnout of teachers is a huge problem, especially in the places where the work is the hardest and the pay the lowest. You end up with a mix of saints and a lot of people who could give two shits, and are just taking a low paying job because they can’t do any better. In order to keep the schools staffed at all, the qualifications and experience requirements for the jobs are kept low and loopholes are written to avoid even those. But hey, you could always take a bunch of well-meaning kids and guilty-conscience career switchers to do a 2 year, quasi-peace-corps stint in a high-need school for a subsidized degree and a stipend, that should do the trick!. As always it hurts the most vulnerable the most.
That’s because private unions were dismantled. Public unions are still hanging on. Why attack the other slightly less poor people, instead of solving the real problem, that private industry workers have been stripped of all the protections that lead to actual prosperity?
So you don’t publicly oppose, or fund any superPACS that oppose affordable housing legislation. You don’t profit from your renters. You actually do work to maintain livability in your properties, and you invested blood sweat and tears into a modest home for others. Sounds like you are more of a “housing provider” than a landlord if I were to take a crack at the difference in the two brands. We’ll tell the mob to skip your place The most helpful thing I took from your thread here is “there’s a good way and a bad way to own properties-that-other-people-live-in-that-you-maintain-because-not-everyone-wants-to-own-and-maintain-their-own-property. Here’s how I do it!” I’d stick with that. The people who think that any and all property is “rent-seeking” regardless of behavior and circumstance aren’t going to agree no matter what, but you’d definitely win over those who can only see #notalllandlords flashing over your comments…
I’ve never even heard of such superPACS. People that I know that rent out a place are more concerned about folks not bothering to tell them when pipes are leaking or breaking the stove and not mentioning it or, in Berkeley especially, tenants that actually abuse rent control, like mine who doesn’t even really live there.
I wish I made a profit. Seriously, after mortgage and taxes, I don’t even quite break even on the repairs. I had to replace the windows in half of one unit. That wiped out any “profit” for six months just there. As certain people will say, people like me make profits off of the overall housing boom. My place is worth 20% more now than when I bought it because the Bay Area is still getting more expensive to live in. If people want to say I and others are participating in some evil, we’re part of that cycle. The whole reason that this is a longterm (20 year plus) investment is the hope that the house will be worth a lot more than I paid for it so my rate of return is better than, say, a bond or the stock market.
Because they’re not subject to a market economy like the rest of us, the practicalities and optics of negotiating with governments in the US gives them unreasonable advantages. Politicians will give away the store as long as it doesn’t take affect till after their term. Your argument is just a version of “don’t hate the 1% for having all the wealth, just become one of them” that is used to get people like “Joe the Plumber” to vote against their own interest.
For those who don’t understand the landlord game: the main difference between rental RE and any other form of investing for us mere mortals who aren’t hedge funders is that this is the only market we can take serious advantage of borrowing leverage. If you buy a rental with 25% down on a 15 year note that pays all it’s expenses and mortgage the whole time, and nothing more, at the end of the mortgage you’ve made 9.4% on your 25% down. That’s considered great in most investments over that long. Had you bought a stock that didn’t go up, at the end of that time you’d have lost a significant chunk to inflation. Now consider that rents usually go up over 15 years, as do values. Even if you have no cashflow at the start of the mortgage you likely will by the end.
Of course, several thing can mess with this rosy picture. Rent controls make it hard to make gentrification bets, but they usually rise at least along with CPI. Insanely high price/rent ratios (GRM) in many areas make it a negative cashflow proposition, so you need deep pockets to play. But there’s places in this country where you can buy a house for $20k and rent it for $500/month.
And there’s also places where you can set up a pay day loan outlet and gouge poor people at rates that would make Donald Trump blush. There’s lots of ways to make money off of people who don’t have nearly enough of it. But if I were doing so, I wouldn’t go around proudly defending myself.
My, that’s a mighty big chip you got on that shoulder there!
Please do consider the parallel between so many of your comments here and those made by people who commonly get referred to with “notall______” hashtags.
Again, I never said all landlords. You know, if I may say so, etc. I usually appreciate your commentary at bbs, but in this thread, despite what you just wrote, I’m wondering where your “protests too much” is really coming from. What often prompts this kind of “but don’t forget about the good exceptions, like me!” protest from say, white people (in discussions of racism) or men (in discussions of sexism) is an unacknowledged sense of guilt – maybe even of one’s own complicity in an exploitative system. I don’t know if that’s where your defensiveness is coming from on this topic, but um, maybe? It’s sad, really, that (as opposed to the general drift of your commentary in other threads) you’re more interested in defending yourself as a landlord than in acknowledging and addressing the huge and growing abuses in Neoliberal Land with rent-seekers – abuses being committed by many landlords. I’m not asking for a discussion about that; I’m just pointing out a kind of response that I’ve seen all too often before (and it arose because you jumped on one of my comments, not because I jumped on one of yours). That defensiveness may be more about you than it is about bigger problems, and if so, expressing it may not be all that helpful.
As for the specific hypothetical that I initially commented on, it’s hard for me to imagine a place where one can buy a place for 20,000 and rent it for 500/month without renting to people who have a lot of trouble coming up with the rent and other basic living expenses. So yeah, I would expect that in most such cases, that would be exploitation of people less lucky than oneself, rather than “perfectly reasonable” and morally defensible. Sure, there are legal ways to make as much as one can from the misfortune of others, but if I were doing so, I wouldn’t go around proudly defending myself.
ETA: This comment is in response to a second response to me that albill withdrew, notice of which will soon disappear.
Would it be better if there were not a place for these tenants to rent? Do you think a $500/mo tenant would have been able to buy it themselves but for those damn greedy landlords? What’s remarkable about that situation is not the rent but the sale price.
But back to the point, I’ll bet you don’t expect farmers to sell you that organic apple at less than market rate, nor Toyota to sell you a Prius at a reduced profit. How about your iphone, now there’s a high margin item, but Apple see no reason for charity. Why is it you think that landlords all have some absurdly padded arbitrary profit margin that makes it different from any other business? I have a 3 family property I bought in 2004 that I have never recorded a net profit from. Greedy me. It’s still a decent investment as per my description above, but you think I should lower my rents anyway, right? Why should I be able to have a secure retirement like a public employee?
Here’s how markets work: The price for a rental property is determined by who’s willing to take the thinnest profit. That’s synonymous with highest bidder, since the price is elastic but the rent is not. If you try and buy a property at a price that will make you killing on rent, someone else will outbid you. Those $20k houses are cheap because they are not in growth areas, they’re shabbily built, and will rent to tenant that wreck them. That business takes a lot of attention, work and capital. If it didn’t, the price would be higher.
The most helpful thing I took from your thread here is “there’s a good way and a bad way to own properties-that-other-people-live-in-that-you-maintain-because-not-everyone-wants-to-own-and-maintain-their-own-property. Here’s how I do it!” I’d stick with that. The people who think that any and all property is “rent-seeking” regardless of behavior and circumstance aren’t going to agree no matter what, but you’d definitely win over those who can only see 
