These tenants are often not accepted by landlords because they're thought to cause more issues. Mine are great. They keep the units spotless, mow the lawn for me on my multi unit properties. When I have a tenant like this, I never raise their rent, and if they can't pay the hundred bucks the government won't I sure don't care.
Some counties even provide free legal help for landlords if their section 8 tenants do something bad. It's actually pretty low risk.
The main downside is the increased overhead of paperwork and inspections. The government wants to (rightly) make sure you aren't a slumlord so they do a lot more inspections.
High paid tenants seldom miss payment - I've setup automatic EFT withdrawal from their accounts, so I don't even need to process checks, and they aren't really impacted by the rise in unemployment right now - most just work from home.
I think the bitter spot for being a landlord (especially now) is to manage low-mid income units. ...it's just a constant stream of problems - people moving in and out - single mom's that chronically cannot afford the rent - unregistered tenants - people that refuse to pay and refuse to move out - drug and police raids... like it was a total total nightmare.
Managing 12 low-mid income apartments was a full-time nightmare. Managing 12 high income lux units now takes about 4 hours every other weekend and is usually a pleasure to do.
Is it the case that most people are in the middle, with not enough section 8 and luxury qualified people to go around? In my naiveté, I thought that there would be more section 8 people. (Of course, I also thought they would be worse than the middle income people. So I guess that shows how much I know about it.)
Anyway, if the majority of the market are those low-mid people, I mean, that's a problem. I was under the impression that those people normally bought houses they couldn't afford and so didn't negatively impact the rental market that much. (Again, maybe just a stereotype I had?)
Exactly. Section 8 is difficult to get as there is a fixed allotment of housing available and it can take years to get your voucher.
The other thing that's surprising is how many people are renting their homes. My own naiveté had me believing renters lived in apartments. Not even close! Most renters live in houses in regular neighborhoods from the low-end to the high-end. There are higher-end neighborhoods near where I live where 20%-30% of the houses are being rented, not mortgaged. In lower-end neighborhoods the percentages are much higher. That was before the 2008 housing crises, the percentages have increased since.
Of course it comes down to the people, regardless of the psychological incentives. But maybe the incentives promote some poor behaviors enough that its such a shared experience of poor behaving tenants.
I own an apartment in Rome that I rent because I don't live there anymore.
It's rented to a Bengali family that nobody wanted as tenants because they're immigrants and such (you can guess the reasoning behind it)
They used to bring the grocery home to my mother, so I gladly accepted to rent my house to them when they asked
They've been the best tenants I've ever had and due to covid they found themselves in the position of being one of the few local shops still open in the neighborhood, so their business didn't suffer much from the lockdown.
Many in Italy stopped paying the rent for 2-3 months as of now, but they always paid in time and in full, I asked them if they needed a cut on the rent to save some money, due to the bad situation, but they refused the offer.
So I'm installing air conditioning at my expenses in exchange
It's good when things go smoothly despites the odds
What a great story.
I just did what it felt right
I'm inclined to say that racism in Italy is different from the general notion of it: I mean, there are certainly racists in Italy, no point in denying that, especially towards some ethnicities (Africans, middle Eastern and South Americans in particular, they are considered too loud and unreliable - coming from us it's really something - and often also worse than that) but Italians are mainly suspicious of what they don't know (yet) until they know them, like we still live in small state cities, surrounded by walls, that don't trust each other. But it's mostly a trust thing: still people from the north usually don't trust people from the south and vice versa.
In Rome I've seen many times that Romans prefer Romans like them, just because it makes them feel safer.
Until they realize they really don't like each other.
Think of it as "the evil you know".
I must also say that they are often wrong and that there is a good chunk of the population who really doesn't care where you come from and just loves being with others.
In at least half of the young families (kids aged elementary to high school) I was around in Milan, one or both parents were originally from the south. They spoke of it almost like how immigrants do: they'd moved north for better jobs/better life, with the implicit sacrifice of being close to family/environs where their real roots were. I guess the southerner stereotype to northerners was sneaky/mafia etc, while the reverse was something like overly bourgeois, slick without substance, moneygrubbing etc. Very interesting and a bit sad (that development in the country seems so uneven).
I never got to visit the south so if I ever get to go back I hope to spend just as much time in the south as I did in the north.
The only other place I know well with such strong and old regional beefs is South Korea and that's really only between two regions, plus people from Jeju stereotypically don't trust mainlanders I guess.
A lot of families moved from the south to the north in the past 70 years and they lived the same experience you hear from migrants today: discrimination, poverty, segregation etc etc
So many moved to the point that at least half of the north, especially in Lombardy, is made by families with roots in the south (usually grandparents, many are from Sicily)
There are many popular stories about the infamous "we don't rent to people from the south" you could find on the listings all over the north (from Bologna to the Alps)
My parents moved in the late 60s from the country side 100kms south of Rome to the city to find a job as well
My uncles went to Germany, Belgium, Argentina and then have come back only because their parents were becoming old and needed support
I moved from Rome to Milan as well, not in the same conditions of course, I moved for a well payed job, but I still had to move to get it
It is so engrained in our recent history that it's taken for granted that if you are stuck in your homecity in the south the only way to change things is move to the north, that there is even a comic movie from the 80s titled "thanks to Apulia region for giving us the Milanese"
On the other hand people move to the south when looking for a better lifestyle, better climate, better food or just being closer to the sea, and many of those that moved to the north try to go back to where they are from as soon as possible
Including my parents that went back to their city in the country as soon as they retired, especially my father
The north is beautiful, the food is good, but the stereotype says that in the south everything is much better, and I somewhat agree with it.
I can't help it, Milan is not Rome, it will never be.
A risotto will never beat a carbonara.
But that's just my opinion :)
Now that we live almost 800 Kms apart I see my parents rarely, especially my father who really enjoys being alone, away from the crowded city
He went to Rome only to work, he lived there for 50 years, raised two children, but he never really felt part of it, he never lost his accent and never took the Roman one.
So in a way in Italy we are all trying to go back home, one day.
I used to have this same mentality. Until the person who was renting one of my properties decided to lie about certain issues (like claiming a shampoo bottle lodged down one of the toilets was there for years). When I decided to not renew the lease with that tenant, they decided to cause considerable damage to our property.
Sometimes, when things come easy to people, they don't appreciate it. Holding people accountable helps them lift themselves up too.
Your experience points to the human race sucking not poor people.
People living in poverty don't have those luxuries. Their chances of having an eviction record are higher. Their ability to pay a higher deposit are drastically lower, since just staying alive consumes basically all of their paycheck. The chances of them being able to pay above market rates are basically nil; their chances of being able to pay market rates are not great. If they get evicted, there is a significant chance they end up homeless. There is a significant chance their new circumstances will result in them losing their job as they struggle to find somewhere to live, because priority 1 is not sleeping in a shelter (which I absolutely understand). To add on to that, they might have children who also follow them into their new circumstances. 28.9% of children below 50% of the federal poverty line experience an eviction before they turn 15, and 25.6% of children between 50% and 100% of the federal poverty line experience an eviction before they turn 15.
All of which is to say, the possibility of eviction is far more threatening to people living in poverty. Their lives are not cushy even when they have stable housing. I can absolutely understand that losing their housing could be the straw that broke the camel's back, and they lash out irrationally. I don't think they suck. In fact, they're probably stronger than I am, I don't think I could endure the things they deal with on a daily basis. But I also don't discount the possibility that they react more vehemently to losing their housing than someone who has less to lose.
This is a situation where I think the private sector does a poor job of handling the situation. In a market where there is perpetually more demand than supply (who has a housing glut, other than Detroit?), there is always going to be some bottom percent of less profitable potential buyers who get screwed. For non-necessary goods, this is fine, but not for housing. I don't think any first world countries should have citizens that have persistent worries about how long they will have a roof over their heads.
If you didn't mean to imply that housing comes easy to poor people who are on Section 8, then what did you mean?
Yeah, it sounds like moralizing to avoid coming across as ignorant of class issues. However, ironically, it gives you away, because people who think that's excusable are generally ignorant of class issues.
Do you honestly believe I expected them to beg for mercy at my feet? You need a reality check. The problem is that you don't fully understand the situation, the background, etc.
And yes, from your comments we cant understand nor judge the situation at all. Even if you would describe it in great detail it would merely be one side of the story.
People can at times end up in a downwards spiral of crap. A mix of stuff that is their own fault and things they couldn't do anything about. At some point one may throw the hands into the air and get careless and sloppy about it. You should obviously get rid of people like that but it isn't like they stop existing when you do.
I think you have a very misguided idea of what it's like to live in poverty.
In my country (Ireland) over the previous two generations, houses went from dirt cheap to extremely expensive. In the generation that came of age in the late 80s and early 90s, you could work a normal job and buy a house, easily. If you had a good job, you could buy several houses.
Now, my generation. We came too late. Houses now cost so much that you will be en-debted to a bank for life if you buy one. Now we have a rent crisis. For many people, they can barely even afford to rent a house and buy basics like food. Meanwhile, anyone who was lucky enough to be a bit older and smart enough to jump on the property wagon when it was cheap, they are rolling in money. They earn thousands of euros from doing essentially nothing except be born in the right generation.
It's very hard not to look at them, look at the hardships of the people my age who struggle to pay rent, and not think of landlords as social parasites.
And in combination globalization/corporatization has put a lot of high paying jobs in a small number of areas.
In my opinion it’s basically generational warfare or at least a hidden retirement tax paid for by professionals in booming cities for old people who happened to own property in those cities. Even if you don’t subscribe to that hot take, it should be uncontroversial that property values massively outstripping wages in some areas reduces quality of life and contributes to inequality.
The solution is far more affordable housing but how we get back to that 1960's era English and Irish council housing model I have no idea in the current political and financial climate...
This goes both ways. You have to be careful who you rent from, too.
Of all the investment opportunities available to people, I'm not particular sympathetic to purchasing property to seek rents.
If forbidding renting properties to tenants would solve problems, I would be on your side.
People will always need to rent. A society has to allow them to without allowing them to be exploited. But once you allow renting, you have to protect property owners from tenant caused damage as well.
I'm not saying we're there - we may be far from it. But renting is not only useful, it is necessary.
We can at least lower the rent down to zero over [say] 40 years but it would be more reasonable to make the tenant the owner after he paid for the place 3 times over.
Maybe it's different in other parts of the world but where I live, rent seldom covers the mortgage on a property, let alone all other expenses. The profit, if any, generally comes from capital gains when selling the property (which right now isn't on the cards for pretty much anyone.)
I'm a member and live in a housing complex owned by a cooperative. The rent you'll pay in this kind of setting is at the lower end of the market, the services you get are at the upper end. Being a cooperative means I own shares, so I get dividends and balance sheets etc. Even with this great (for renters) setup, they still pay out 4% dividends and expand like crazy (not to produce more dividends but to provide more apartments). They could pay out much more than 4% but they don't want to optimize for profit and make it an investment, the dividends are meant to incentivize members to invest/save more than legally required.
The place I lived at previously had higher rents and less services. I don't know how much of a profit they made annually, but I'm sure it wasn't anywhere close to 4%.
Don't forget that "covering the mortgage" involves building the landlord's equity, so it's not as if this portion is lost to the bank while the landlord has to depend on appreciation. If I "only just cover the mortgage" while renting for the entire term of the mortgage on a house that doesn't appreciate above inflation, the landlord still goes from owning 20% of a house to 100% of a house over that term.
No offense but bullshit.
In my experience most people serve their own interests. Commercial enterprises in fact select for those who serve their own interests over morality because those parties are most likely to succeed.
In America you are lucky if your interests coincide sufficiently with the owner class that you can both get along productively. Expecting beneficence as well is unproductive.
What a ridiculous assertion.
This is different from, for example, a retailer, who provides the service of gathering things into one convenient place, and does so more efficiently than everyone gathering the things for themselves. A retailer's profits are payment for providing that social utility.
Landlords' profits are mostly a consequence of their holding rights, rather than the provision of any comparable social utility (there are some small efficiencies to be had, but they are not the primary driver of profits).
Those are almost always different groups in practice though I’m sure you could contrive a counterexample.
A landlord provides about as much value to a consumer as a stockholder does to a public company. Economically the landlord-tenant interaction is primarily a speculative/investment/arbitrage relationship rather than a service
Thus landlords are the one to actually finance those buildings.
> A landlord provides about as much value to a consumer as a stockholder does to a public company.
Which is a significant value, for a company (even if I would like more companies to be privately owned). In this model a landlord is how people can get access to housing without huge initial capital and/or long term commitment.
A rent-based housing economy causes huge problems for those that want to buy an house (somilarly to how Airbnb/short stays cause problems for rent seekers) but this is not about one sector being parasites, it is about an imbalance in the market.
the situation would not be better if landlords did not exist.
Actually it's mostly the banks that provide the finance, the landlord is an intermediary.
That seems like a clear failure of empathy and I fail to see how it was "debunked."
Everything involved in this thread is matters of opinion and viewpoint, "debunked" is a strong claim.
Also, people often have a short memories when it comes to people that help them out financially. They might remember and appreciate it more if you help them move, or help them learn a craft.
There was a story about how charging some nominal amount for a mosquito net led to more consistent usage and lower malarial rates, than if they just gave the net for free.
Why? Because the "price" of something is a signal as well. If it's free, who cares? If you paid something, well then it's yours and you should look after it.
I'm not sure we have any idea of the real value of things these days, including what work is worth. Credit has distorted the system; just because someone who is work full-time (however many jobs that takes) can't pay the rent rate the market seems to be dictating doesn't mean someone stepping in to fill the gap is giving them a "handout".
It's not charity, it's account-settling.
Widespread homelessness is a bad look for any culture that likes to see itself as civilised.
Surely the lesson here is that "this person was a criminally inconsiderate jerk", not "all Section 8 tenants are untrustworthy". (cr__ put it more punchily while I was posting: https://news.ycombinator.com/item?id=23409805 .)
> Sometimes, when things come easy to people, they don't appreciate it. Holding people accountable helps them lift themselves up too.
How does denying housing to someone who needs it help them lift themselves up?
Also people growing up in poverty experience higher stress, so the probability of them doing the 'going mental' thing is higher.
Many mom & pop and breaking even on a mortgage landlords cannot afford that kind of catastrophic loss.
You have to be careful who you rent to. Sometimes someone down on their luck would make a much less demanding and better tenant overall. Be careful chasing away the poor because they actual need your place and may take better care.
As a challenge, I would like you to find an landlord insurance policy that explicitly covers intentional damage by a tenant and a price estimate on the internet, because I'm having a hard time finding it!
I thought I was being kind and "helping them out". When, in reality, that individual didn't appreciate it and they didn't take better care of the place because of it. When other factors (e.g. the lying) caused me to not want to renew with the tenant, they caused over 10k damage and flooded my house in retaliation.
I am sorry that I read too quickly, and misunderstood your point, which I think I now understand. Although I see now that you specifically quoted your parent's point "if they can't pay the hundred bucks the government won't I sure don't care" before disagreeing with it, I reacted too quickly and thought incorrectly that you were disagreeing with the parent's broader point about why it was good to have Section 8 tenants.
Being disrespectful is not probably not correlated with being poor or not.
Yea I’m invoking Poe’s law on this coming from a landlord. Are you trolling?
I assume section 8 is our equivalent of Housing Benefit. I know plenty of landlords who wont accept HB tenants because properties have come back absolutely trashed before.
Never thought i'd find a reddit style anti-landlord on HN.
The fact that they are trying to waste people's time and money to litigate that out where they most certainly will not win is just unconscionable.
As an example, my policy covers general losses arising from physical damage, but then explicitly excludes losses from earthquakes, floods, oil spills, and acts of war.
If I buy only that coverage and a flood or earthquake damages my property, it's not my insurance company's fault that I'm not covered.
I'm literally not understanding your claim, so it seems like we are indeed having significant difficulty communicating. Because of the way contracts are written, I think your claim is pretty close to obviously false.
Concretely: if riots are not covered, it is overwhelmingly likely that the contract will be structured as "physical damages are covered except as listed below" listed below: "riots are not covered"
I'm just saying you're making a whole lot of points without actually addressing the literal contents of my message, which would make this conversation much smoother because otherwise we are speaking past each other.
It looks like that presumption is wrong because riots will be covered under the umbrella of "physical damage" but you haven't really explicitly made that point by addressing mine, so it's hard to move forward with you to a productive conversation.
If the purchaser of the insurance makes the choice to purchase insurance which obviously and explicitly does not cover riots, they ought not be surprised when riots are not covered and it's not the insurer's fault.
Source: been through insurance claim on a business that burnt to the ground with months of finished product stock (and which our accountant had accidentally under-insured. Very painful!)
A friend had an Aston Martin that caught on fire. About a $120k car. It took months of investigations to close that claim. Insurance pointed finger at AM, AM wanted their own investigator, fire inspector involved, etc.
And that’s not even large relative to a house or business.
It's way worse for a business, when I went to the MDRS for a week the bistro's kitchen in our Flagship restaurant went up in flames. The cause was unknown, but all in we lost 4.5 weeks of work due to unnecessary down time, not including the equipment repairs, contractor labor and misc costs because the city's investigators wouldn't come out to assess the damage in the allotted time slot to investigate and approve the repairs because of snow (IT'S COLORADO!) and then the Insurance stonewalled and tried to delay things further by not playing nice with the city that delayed reopening.
All told I wouldn't be surprised if we lost over a couple 100ks in lost profits and limited operational costs (we still had the bar/grill upstairs) and having to rebuild the Kitchen plus labor. Corporate paid us bonuses, which were really just 1/3 of our normal pay to help offset expenses, because of limited hours.
Bourdain was right: restaurants really are horrible businesses. Insurance which is mandatory, compounded with local government regulations and approval, makes it way worse.
This car burst into flames overnight while parked. Turns out it was an electrical short in the dashboard wiring. But, cars don't often self-immolate, so the suspicion of wrong-doing caused a delay.
I also don't know if they paid before the investigation was completely closed. They may have, but even at that, it was a few weeks.
I can't imagine that response passing muster in court, because as another commenter pointed out, all damage would involve some kind of collision between two objects which means that if we accept their response then the policy would be worthless because it wouldn't be able to cover anything.
It's implied (in the context of motor vehicle insurance) that "collision" in their case means collision between two vehicles but they're now trying to be pedantic about it when it's in their favor.
But if it's Section 8, maybe he can find some govt agency to sue?
My wife and I own a number of (8) rental properties. My wife manages them and we rarely have problems with tenants.
I will tell you what I think is the secret. My wife figuratively crawls up the ass of all prospective tenants. She needs to see credit history, pay stubs, and proof of punctual rent payments in their current situation (if applicable).
I don't think many landlords do this type of background checking because it's extra work and it can come across as confrontational.
But you'd be amazed at the number of prospective tenants who don't come back after being asked for that information.
"Do you do criminal background checks?"
"Ok, thank you, goodbye."
There are probably a limited number of landlords who rent to felons, and they have to just make 1000 calls to find a place.
I've been reading Evictions: Poverty and Profit in the American City on recommendation from HN and it has been eye opening. They don't make 1,000 calls, but there are several stories of people making a little over or under 100 different calls because of prior evictions and/or felony convictions. The quantity is only magnified by the fact that they're limited to apartments that are ~$500/month (which is already ~75+% of their monthly income). The book is heavily anti-landlord, although I'm not versed enough to say whether that's the truth or if there is a heavy bias.
I don't know what the solution is. There's a delicate balance of trying to give people a chance to recover or rehabilitate without also forcing landlords with cheap property to enter into blind negotiations and potentially damaging their own property. Frankly, Section 8 seems like a bad solution, and that we should go back to government owned and leased housing where you won't be evicted for complaining about sub-standard conditions because the landlord knows you can't afford a lawyer.
As for public housing, there used to be housing projects in the city I live in. The murder rates within those blocks were probably higher than in any country in the world.
So true. I get so many emails like “we can move in tomorrow” or “hook me up”. If they call, voicemails are only marginally better. Makes screening easier though as I simply do not respond.
For a multi-room home:
1) Find a foreign female student to act as the primary tenant. It is easy to target rental availability to this market.
2) Let her find additional roommates.
Foreign female students usually are well-funded by rich parents. And, if a resident of a "single family home" (the first tenant) is seeking roommates they can discriminate more than a non-resident landlord can.
The last thing I want to do is get into the landlord business so I keep pushing back.
Note, when I was a kid, my mom had a hell of a time evicting a Section 8 tenant. It took months and they left behind tons of garbage and damage. It was tough on my mom because she felt so duped by the lady that rented her house while we were living in another part of the country. My mom was a struggling single mom too, our family of four lived in a basement of her friend for several months until the eviction cleared. And then it took a week to clean up the home before we could move back in.
In uni one of the Chinese master's students fell asleep with a hotplate turned on and burned down the apartment a couple down from us. Students gonna student.
Rent-seeking sucks. People just want a place to live.
I think we treat the tenants fairly. My wife's background checks are her way of assessing whether someone can actually pay the rent that we're asking for. If the applicant makes $20K / year and the rent is $1300 / month, both parties are just asking for trouble if they sign a lease.
> People just want a place to live.
Can I stay at your place?
What assurances would you want before loaning it to someone to drive cross-country and back? Would you want to see their driving record? Would you want to know their financial situation?
Disclaimer: I know very little about them, this is not a recommendation I probably have some details wrong, just something I've seen floated around.
Edit: Someone want to jump in with what they are then? Not like I said go do this right now or something, would genuinely like to learn what I'm wrong about here. Downvoting without a response continues to be the weakest part about this community.
Another difference is that REITs own many types of commercial real estate, ranging from office and apartment buildings to warehouses, hospitals, shopping centers, hotels and timberlands, but usually real estate retail investors own are for housing.
 This might be a little weird to wrap your head around. Suppose I am a landlord and, over the years, depreciate a building by $200k. That is a "phantom" cost. On my balance sheet, it decreases my cost basis in the building and decreases my taxable profits from the rental business. When I sell the property, because I've shifted that rental income into depreciation, my cost basis has fallen, so my gain on sale rises by $200k, but that $200k is now taxed at 0~20% not plausibly 50%+ (top individual bracket + state taxes + self-employment taxes).
(I have somewhat better than casual understanding of this because my father worked in real estate all his life and other family run mom-and-pop real estate operations, but feel free to run past your friendly local tax advisors.)
Thanks for the info!
What do you mean by this? That the loan can't be eagerly collected in full? That the repayment is on a schedule?
You could buy a house worth $500,000 with 20% down and a 30 year note. As long as you pay the mortgage, it doesn't matter how much the market value of the property changes. A drop of 40% in real estate prices that lasts for five years is not necessarily a problem.
On the other hand, imagine you put $100,000 into a brokerage account and were able to get 2:1 leverage. You could then borrow $100,000 and buy $200,000 of stock.
However, if the market runs into a bad patch and that stock decreases in value to $120,000, your equity is now only ~16.7%. This is below the minimum margin requirement (25%) for your account. Your brokerage calls you up and says you need to put an additional $10,000 in your account - that's a margin call.
If you don't have the $10,000 then your brokerage will sell enough of your position to bring your account back within requirements; possibly at the bottom of the market.
Real estate: 5:1 leverage, no margin call
Margin account: 2:1 leverage, plus margin calls
In contrast, if you buy stocks on margin, they will forcibly sell your position if the value of the collateral gets anywhere near the loan value.
You are not incorrect per sé. REITs exists in an awful large number of varieties in every possible flavor and indeed broadly reflect what you describe, i.e. an exposure to a Real Estate. You get paid a dividend (which would be similar to the cashflow you receive from a rental property you own). There are a number of upsides of investing in REITs over buying a property and renting it out:
- less work (no need to manage tenants)
- less risk (it's a diverse set of properties across multiple locations vs a single property in one location).
- highly liquid (you can buy any amount and sell virtually whenever you want you need to liquidity)
there is some downside:
- it is not tangible as a property (sometimes that means that if you don't understand exactly what you bought under what conditions it can mean you have some unknown exposure/risk you were not aware of).
- it has less upside generally (in terms of risk/reward, it is a much safer investment but with that there is also upside as if you were to own a single property in the right neighborhood).
- less leverage (generally you get more leverage on your mortgage than on your investment account)
Particularly the last points is what catches people often. I.e. if you are renting a property and everyone else is owning, and the properties go up, you will feel 'stupid'. People love bragging how they got rich by buying and 'flipping' and ofcourse this happens and has happened in the past. But for all those great stories you don't hear the people that bought and were stuck with the house, had to sell at 'firesale price' because they lost a job/got divorced/etc etc. In the end, buying and owning property with leverage is a choice that fits a certain lifestyle and SHOULD not be for everyone. There are a lot of other investment opportunities in the set for any individual that would be better suited but are often considered 'complex'. Owning a house is simple and has been pushed for decades to 'build' wealth.
The reality is that for most people their housing cost is by far the largest fraction of their cost of living. Owning alleviates this costs to a certain extend if only psychologically, but it does not come risk free (the number of times I heard people say 'house prices only go up'). The leverage factor aside (which is a real thing), looking from a person investing their savings, an appropriate allocation would be something dependent on their age but in any case not much over 10% in Real Estate. About as much on commodities (GOLD/precious metals/etc), Fixed Income depending on age but somewhere between 20% percent earlier in career with little commitments and up to 70% in retirement, with the rest in stocks ideally globally diversified. That all being loosely based on the highest risk-adjusted return models (or how any active manager would run your fund from a top level).
Obviously, this is boring and it is way more smarter to buy this sexy property and flip it a couple times and those tenants are not an issue cause 'you love dealing with them anyways and have nothing better to do'. Basically risk-free money and you didn't even work for it. /s
I could never imagine this scenario. But I have a Tree Addendum I had drafted specifically because I don’t want my tenants to even lay a hand on the trees. I’m more worried by negligent tree trimming that kills a tree. But it sets value to each tree too. Something like “$1000 per inch diameter at 18” above ground.” Sorry about this situation you’re in.
Bear in mind that the tenants have already ignored requests to stop destroying the trees, and they have opposable thumbs.
As a HUD-VASH veteran recipient in Los Angeles, I have hoped to discover that there are reasons to expand programs for more low-income people in the United States. I am EXTREMELY fortunate as a veteran to receive housing assistance. Thanks for making it possible for people in need to have a safe and affordable option! Blessings!
Section 8 neighborhoods are a dumping ground for the people and families society deems undeserving.
Meanwhile the average worker pays 30+% of their income in federal, state and local taxes--basically working unpaid from Jan 1st through Mar 31st--and they are supposed to believe that the poor are the victims?
These are all either basic human rights that the richest country on earth should provide universally no questions asked as a matter of principal, or they're necessities needed to participate in a modern economy.
Comparing a section 8 household to a developing household is not a fair comparison unless you want to see more income inequality and have slums, surrounding high tech cities in the clouds, where the servants live.
>Meanwhile the average worker pays 30+% of their income in federal, state and local taxes--basically working unpaid from Jan 1st through Mar 31st--and they are supposed to believe that the poor are the victims? Yikes!
Infrastructure and essential services are damn expensive. Without roads, telecommunications, satellites, vaccines, bridges, dams, railroads, hospitals, social safety nets and the like the American way of life would not be possible. If you want to consider what sacrifices in these areas look like I suggest you look at the recent Michigan dam failure.
It is possible for both the decaying middle class and the impoverished class to be victims of systemic corruption and misallocation of resources.
Section 8 housing is a trap, 1, where many Americans get stuck. There are many perverse incentives at work where it is better for the recipients to stop working or not work at all because doing so would end their benefits. Likewise, many families are far better off on benefits than not. I did some napkin math about this previously, 2. So, the solution lies not in being angry at the people stuck on benefits who've failed to pull themselves up by their bootstraps. Rather, with poor leadership, propaganda, benefit cliffs, and congresses inability to do their job and fix these systems that have been broken for generations.
Everyone suffers when we fail to fund essential services. Complaining about the raw numbers is easy and makes for a good clickbait headline but such statements lack intellectual rigor and blindly ignore reality.
That would be true if we were actually "rich". We're often sold this vision that first world countries are somehow "rich". Or at least relatively "rich" to 3rd world countries. And, it simply isn't true. We're slightly better off and able to afford a lot of frivolties like tech gadgets and clothes.
In poor countries, people spend upwards of 90% to 100% on necessities. In so called "1st world" countries, people spend 80% or more on necessities: this data is available, just look at what the average US citizen spends on, 80% plus is all necessities: housing, transportation, food, water, medical care and education. 1st world countries aren't nearly as far ahead as we think we are: most of us don't even have 400$ in savings.
Personally, I know a couple in the top (2%-3% nationwide, roughly 200-300k or so) with high wage tech jobs, but their COL is so high, they don't have their townhouse paid off, they don't even have a backyard to grow food in, they even have to rent out every room of their townhouse just to make ends meet. Do you call that "rich"? And yet, their tax rate is extremely high.
You've not responded to several of my points and are instead writing paragraphs about the headline summary of my comment. I'm not sure what points you're even trying to make here, maybe you're just venting? You started off talking about what is provided to Americans, when I elaborated on the things you've brought up you've moved onto different topics.
Percent of income spent on necessities is not a comparable metric between developed and developing countries when using it to make unspecific sweeping claims about progress. You're conflating American accomplishments with individual metrics. The two are related yet separate issues.
Your friends making 2-300k are fiscally irresponsible in my opinion. If someone making 6-10x median income can't figure out what millions of other people have on a fraction the income then that says more about the person than anything else.
It is a terrible outcome if millions of Americans are about to go broke and the relative winners are people who (a) totally rely on government handouts and (b) rely on people who are totally reliant on government handouts.
This story points to a situation where a rational person would rather be involved in ventures that produce less resources than they consume. That will really start to hurt the absolute measures of prosperity if it persists for long.
You're ignoring the potential effects on property value.
Bingo. Surprised nobody else brought this up. Not to mention the neighboring home/property owners are going to be pissed off because it's a potential drag on their property value. Though the stigma against section 8 may not even be warranted. I wonder whether there are any studies on the effects of section 8 on communities.
Or separate entrances for the social housing flats and regular flats in the same building (regular as in how it was intended to be built, not with extra walls to create extra rooms or with no living rooms at all).
Or with social housing residents being asked to pay separately for communal areas maintenance (because the government doesn't pay for that but you can't really stop people from walking on the grass) that they didn't ask for.
It'll be worse in downtown areas. I've heard from multiple firms that are looking at downsizing their expensive office space and continuing to allow employees to work from home. if a person doesn't have to work downtown they will often choose not to live there either.
COVID is going to change the face of urban real estate. So if you have a tenant, they're gold and do what you can to keep them.
Edit: Also note this appreciation driven dynamic is something of a product of QE - printing money. As the treasury dumps money into markets, anything of apparently reliable value, "money-like", becomes more valuable - commodities and land being examples but the "best" companies also. This appreciation process becomes more important than the ordinary use of the object in the case of land (empty mansions in London being the prime example but we may wind-up with many more if the approach continues).
If you just want to target holding but not renting property because it decreases housing supply you can do that even more aggressively.
I'll take 100% of appreciation for the months it sat unoccupied if it sat unoccupied for 3 or more months for 1000 Alex.
When I’ve looked for apartments in the past I’ve seen almost no difference in rents (as advertised on Craigslist, apartments.com, Zillow) between large corporate landlords and small time landlords, except for very high end luxury apartments I’m not in the market for.
Yet I’ve heard countless horror stories about unresponsive/malicious small time landlords and very few about large landlords. To the contrary, while renting from large corporations I’ve found that my service requests are addressed very quickly, there’s almost always someone in the property management team I can talk to about anything, and everything operates smoothly.
Perhaps the “mom and pop” landlords only advertise via word of mouth but every time I’ve looked for apartments I’ve come away thinking that renting from those same large, faux-luxury (as opposed to unrenovated since 1985 for the same price) corporate landlords are the best deal when renting in expensive areas.
There's also no way to negotiate with a person who has any actual power. You can talk to polite mooks all you want, but they can't actually change anything. You're guaranteed to get the maximum legally allowable rent increase every year and a huge pain in the ass battle for your deposit every time you move out.
I move around a lot so rents getting raised aren’t as important to me.
I just accepted a lower price with a tenant because it helps them and was way better then them leaving and trying to find a tenant now.
A good friend just moved to a 1-bed in SF last weekend. Small building (6 units). Rent was $2,200 per month, which is about the same as what it was last year. And they looked at a lot of units. They definitely noticed rents softening as they could knock $100 off most rents with little effort.
My personal experience is small owners are "reasonable" and open to building a relationship and large owners could give an eff, but mileage varies. Cheers.
I'd be in more favor of rent control if it would also freeze property taxes, electrician bills, utility costs. It is turtles all the day down.
Utilities across the US also have regulated rates.
But again: the reason rent control is passed is because enough people with significant political leverage were hurting. We need to be able to show them a better alternative if we don't want the pain of rent control's (un?)intended consequences to linger.
0/10 would not use AirBNB again. Sleep on a friend's couch or floor, or shell out the money for a hotel. Or use a hostel if money is tight.
No one wants to live in Social housing projects in the U.K. and for a good reason they are all rubbish, the U.K. has had some of the worst designed and built social blocks in the world many of them were demolished within 1-2 decades.
Stuffing poor people into high density housing is a horrible idea every study shows that spreading them out is not only cheaper but also much more beneficial to them.
1. Not all social housing is high rise or high density. Look outside of the cities for example - new towns. Lessons can be learned this time.
2. Much of the social housing was sold off in the 80's I think, the trick is to keep government ownership of it, not sell it for a pittance and let private landlords profit from price increases.
Concentrating poor and vulnerable people isn't a good strategy they do better when they are surrounded by the better off, having 2 low income families on a street would produce a much better outcome and shoving 200 of them.
Social housing in the UK is complex, at some point nearly 80% of the people lived in social housing, it wasn't for low income families but rather for nearly anyone but the most affluent which often held titles and on the other spectrum the most remote and rural communities.
Social housing was seen as a means to bring workers into the cities during the industrialization of the UK.
Today despite the fact that anyone is still eligible outside of political corruption which ironically nearly exclusively plagues Labour councillors, MP's and party officials which somehow jump to the front of the queue despite earning well above the mean council housing is seen as a solution for the working poor.
Councils already offer rent assistance, have council properties which are used to temporary house vulnerable people, building more of those won't help just look what happens when you have council flats in new build projects, drugs, anti social behaviour and damage to properties simply due to the high concentration of these individuals.
So while having 20-30% social flats in a new build project might seem like a good idea the only thing that it causes is a huge backlash from the regular tenants due to this behaviour and nearly always they end up winning.
Let me guess, you have huge problem with the homeless situation, but are unwilling to consider lowering rents? Is that right?
"In determining the lowest gross rental amount pursuant to this section, any rent discounts, incentives, concessions, or credits offered by the owner of such unit of residential real property and accepted by the tenant shall be excluded."
So if your rent is $3k/month, and the landlord gives you 3 months rent-free, your rent according to AB 1482 is still $3k.
The core problem is Prop 13, not that Prop 13 doesn't exclude for-profit properties. There are a ton of property/owner classes that should absolutely not get the Prop 13 discount. Malcolm Gladwell did an episode on why golf courses (specifically member-owned courses) in California are massive misallocations due to Prop 13.
It's certainly not the people moving in from outside the area who want to rent for affordable rates.
Landlords are part of the NIMBY problem, but not the only part.
You are saying that "the supply line isn't to blame for the demand line" when the problem is where they intersect.
I realize Im oversimplifying the supply constraints because landlords aren't all of the NIMBY problem.
No times been better than post-covid for a desire to branch SV outward. My two cents would be looking at how to employ the people outside SV. Like is it noise about quality of their education or abilities? Not being able to interact with them locally?
I had this thought recently to make a programming “agency”. How to structure an organization that actually works on a programming task comparably to how a 1-3 person team would, but regardless of program complexity. Wonder if this and hiring people to WFH are compatible.
An underlying pandemic throws most of the historical data out the window.
Just ask Hertz, AMC and Las Vegas.
I'm sure many/most landlords are still rooted in reality and are still using the infamous investing formula of "where there are losers, there are winners" (aka buy low, sell high).
Funny, the religion in these parts is usually that building more apartments is the only way to drop rents.
What I’ve heard is that’s either supposed to free up other older apartments or we’re supposed to wait 30 years for the new luxury apartments to become old and cheaper.
I think we need rules about constructing diversified units, not exclusively luxury ones but proportional numbers of basic, medium and luxury.
I would have guessed the lower rents were more about money drying up, and landlords being desperate to hang onto any tenant who can pay.
In our case, instead of moving away, we'd be pouncing on the way-below-baseline price, high-quality rentals that have been popping up for the last couple months.
The market's totally inverted. It used to be that if deals like these appeared, they'd be snapped up within 48 hours or less. Nowadays, they linger for days and even weeks in some cases.
To clarify, I've been tracking 1-2BR apartments in the Clinton Hill-Brooklyn Heights-Park Slope-Carrol Gardens quadrangle. I've heard that other neighborhoods are popping in the other direction, but I don't follow them as avidly.
This crisis is terrible in many ways, but it's also a perfect opportunity to find your long-term rental "forever-apartment", if your lease is up.
A lot of companies aren’t ending WFH till 2021 or fall. Plenty of young people are not renewing their lease and staying with their family outside the city or state.
My building had has four tenants move out in the past week - one a family.
They’ll probably be back and rent again but by then rents will have dropped.
I'm just saying that its definitely on the horizon given the conversations I'm having, even if evidence at the moment is scant.
In many metro areas owner occupied real estate is overpriced relative to rents. When this imbalance corrects rents will rise, as before the correction owner occupants were subsidizing renters by overpaying for property even though renting made more sense.
I suspect that number is still a long way below normal, because lots of people are moving in with friends or family (students, young professionals, etc.).
My experience in London is the ratio of people looking for a house to houses advertised is the lowest I've ever seen in 10 years.