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0 pointsdahart2y ago0 comments

Landlords not cutting the rent supports my claim that renters are effectively paying the property tax. You can argue that not all taxes are passed on, but the reality is that landlords have a set of costs, one of which is taxes, and they have a set of incomes from renters, and the income rent will always be higher than the costs, unless we’re talking about rent control or something like that. If the costs exceed the rents, then landlord goes out of business.

I edited before you replied, and just clarified. I didn’t change my point at all.

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3 comments · 1 top-level

Panzer042y ago· 2 in thread

Rents are certainly not always higher than costs. Plenty of "investor" landlords buying properties that return less in rent than the mortgage expenses of said property (or the cost of capital).

Making 4% in rent isn't great when the mortgage interest is 6%. The difference is made up out of the landlord's pocket, and they gamble on capital gains to make up the shortfall (or rising rents vs a mostly fixed mortgage expenses)

dahartOP2y ago

Sure, rents can be temporarily lower than costs in the short term. In the long term if that happens, the landlord ceases to be a landlord.

JumpCrisscross2y ago

> rents can be temporarily lower than costs in the short term. In the long term if that happens, the landlord ceases to be a landlord

In the very long run, yes. In the medium term, as in decades, home-price appreciation has let landlords in several markets run at a loss and rely entirely on capital gains for profits.

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