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this post was submitted on 11 Jul 2024
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Housing Bubble 2: Return of the Ugly
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Now while I agree this doesn't make sense one thing someone pointed out to me is With rent that is the most you will pay(assuming rent includes trash water etc). With mortgage that's the least you'll ever pay(water heater dies, ac needs service, ceiling fan needs to be rewired, washer leaks and damages the walls and floor).
I've heard that argument as well. But what that implies, is that it's cheaper to rent. More expensive to own.
How is the person renting out their property not losing money then? Because they have all the costs such as repairs, depreciation, future remodels, all worked into the price of rent, plus extra for profit.
These people aren't running charities.
You are correct. That's why the rent is more expensive, if you buy a house and rent it for exactly your mortgage payment you will lose money due to all those things.
If x is mortgage and y is the average cost of all that stuff then x + y = z where z is the break even point. Now most places make a profit which we will call a. Z + A = rent payment. A lot of people compare rent to X and not Z. Now is A excessive sometimes/usually yes... But rent should always be higher than mortgage to take into account Y.
I hate when people say they are 'losing' money if the rent doesn't cover the mortgage / taxes.
No bitch, you're getting $2k a month outta me thats going into your equity. If you gotta chip in $500 to get my $2k you aren't losing $500 a month.
Edit: just to clarify, I'm not saying they shouldn't charge more, but fuck the losing money narrative if rent control or something else changes the situation.