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0 pointsesalman2y ago0 comments

I think OP meant how much people were paying in rent. "We're working for our landlords"- bulk of people's salary is spent on rent, so it's more profitable to become a landlord rather than grinding and paying rent.

0 comments

9 comments · 3 top-level

SoftTalker2y ago· 4 in thread

Rent (or mortgage) is typically the single highest expense for most people, always has been. If your are paying more than a third of your income in rent, you need to downsize or get a better job.

382y ago

> downsize or get a better job

wow great idea, why didn't I think of that

fouc2y ago

IMO if you're paying more than 1/4th of your income in rent, you need to downsize or get a better job. The 1/3 rule is crazy high IMO.

esalmanOP2y ago

Agreed, 1/3 rule definitely does not work in VHCOL areas. I pay 28% in rent, that cuts down the commute and allows us to live at a stone's throw from good schools, grocery stores and small airports.

rco87862y ago

Obviously the lower the better, with 0 being the ideal for anyone. But most people cannot afford a reasonable home on 1/4 of their income.

refurb2y ago· 2 in thread

Being a landlord isn’t that profitable.

In high COL cities like SF, rent doesn’t even cover the carrying costs of a mortgage.

And if they paid the place off, say a $1.2M home, they might $5,000/month in rent. That’s a screaming 4.2% return on their money (ignoring property taxes, insurance, maintenance). Including those it 2-3%.

BirdieNZ2y ago

If you think of it in share market terms, it's a 4.2% dividend from a stock with a long-term price growth rate of ~7%. Not only that but you can use leverage (e.g. like a margin trader) in the form of a mortgage. In the USA, you can even lock your interest rate for 30 years, and only re-fix the rate when it drops!

It's very profitable!

jjav2y ago

> It's very profitable!

Have you tried being a landlord, if it is very profitable? If not why not?

The best way to be profitable as a landlord is to inherit a paid-off property and rent that out.

But if you aren't that lucky and have to actually pay for the property you rent out, it is very difficult to make a profit, let alone one that beats just putting the money into an index fund.

2 more replies

rco87862y ago

Still kind of doesn't make sense unless they knew the landlord's expenses though. I dunno, just seems a little "jump to conclusions"-y.

j / k navigate · click thread line to collapse

0 comments

9 comments · 3 top-level

SoftTalker2y ago· 4 in thread

Rent (or mortgage) is typically the single highest expense for most people, always has been. If your are paying more than a third of your income in rent, you need to downsize or get a better job.

382y ago

> downsize or get a better job

wow great idea, why didn't I think of that

fouc2y ago

IMO if you're paying more than 1/4th of your income in rent, you need to downsize or get a better job. The 1/3 rule is crazy high IMO.

esalmanOP2y ago

Agreed, 1/3 rule definitely does not work in VHCOL areas. I pay 28% in rent, that cuts down the commute and allows us to live at a stone's throw from good schools, grocery stores and small airports.

rco87862y ago

Obviously the lower the better, with 0 being the ideal for anyone. But most people cannot afford a reasonable home on 1/4 of their income.

refurb2y ago· 2 in thread

Being a landlord isn’t that profitable.

In high COL cities like SF, rent doesn’t even cover the carrying costs of a mortgage.

BirdieNZ2y ago

It's very profitable!

jjav2y ago

> It's very profitable!

Have you tried being a landlord, if it is very profitable? If not why not?

The best way to be profitable as a landlord is to inherit a paid-off property and rent that out.

But if you aren't that lucky and have to actually pay for the property you rent out, it is very difficult to make a profit, let alone one that beats just putting the money into an index fund.

2 more replies

rco87862y ago

Still kind of doesn't make sense unless they knew the landlord's expenses though. I dunno, just seems a little "jump to conclusions"-y.

j / k navigate · click thread line to collapse