Reason I’m asking is because I have an aunt that owns like maybe 3 - 5 (not sure the exact amount) small townhouses around the city (well, when I say “city” think of like the areas around a city where theres no tall buildings, but only small 2-3 stories single family homes in the neighborhood) and have these houses up for rent, and honestly, my aunt and her husband doesn’t seem like a terrible people. They still work a normal job, and have to pay taxes like everyone else have to. They still have their own debts to pay. I’m not sure exactly how, but my parents say they did a combination of saving up money and taking loans from banks to be able to buy these properties, fix them, then put them up for rent. They don’t overcharge, and usually charge slightly below the market to retain tenants, and fix things (or hire people to fix things) when their tenants request them.
I mean, they are just trying to survive in this capitalistic world. They wanna save up for retirement, and fund their kids to college, and leave something for their kids, so they have less of stress in life. I don’t see them as bad people. I mean, its not like they own multiple apartment buildings, or doing excessive wealth hoarding.
Do leftists mean people like my aunt too? Or are they an exception to the “landlords are bad” sentinment?
Unless your aunt is transferring equity in those homes to the tenants based on the amount they pay in rent, then yes, she’s a leech. “Providing shelter” isn’t the service your aunt is providing; she’s just preventing someone else from owning a home.
And before anyone says “but renting is all some people can afford, they can’t save up enough to make a down payment” - yes, sure, that’s true. But that’s a symptom of the shitty housing market (really the shitty state of the middle class in general*), and landlords aren’t making it any better by hoarding property, even if it’s “just” 3 to 5 townhomes.
You are incorrect. The service is providing someone a home if they don’t want to own their own or if they don’t have the financial means to do so
No landlords hoard property. The property is used by people.
No landlords hoard property.
Fine, landlords hoard property ownership.
The property is used by people.
As long as the landlord permits it, and as long as the landlord gets their premium.
Landlords profit off of permitting people access to shelter, a basic right that any human should be entitled to. It’s literally modern day feudalism.
No, landlords earn money by providing a service. Properties don’t maintain themselves.
Taking away the opportunity of home ownership is not a service.
That’s not what rental property owners do. They provide housing, not take it away.
Builders provide housing. Landlords are nothing more than a middle man.
Builders build housing. Then they sell it. Rental property owners provide housing.
People who don’t want to buy a home at that location would still need a place to live. Someone needs to rent it to them. Until someone comes along to create government housing or whatever, this is the best we can offer as an individual.
On the topic of transferring equity, how much is reasonable equity? Why not rent at cost instead of charging more and giving it back in a different form?
People who don’t want to buy a home at that location would still need a place to live. Someone needs to rent it to them.
I don’t understand what you mean by this. No one needs to rent anything to anyone, if resources are distributed fairly.
On the topic of transferring equity, how much is reasonable equity? Why not rent at cost instead of charging more and giving it back in a different form?
If a renter pays the same amount of money as the landlord pays towards their mortgage, and the renter has paid rent for as long as the landlord has paid the mortgage, the renter should have as much equity in the property as the landlord does.
I don’t understand what you mean by this. No one needs to rent anything to anyone, if resources are distributed fairly.
But resources aren’t being distributed fairly.
If a renter pays the same amount of money as the landlord pays towards their mortgage, and the renter has paid rent for as long as the landlord has paid the mortgage, the renter should have as much equity in the property as the landlord does.
That’s a rather arbitrary rule. You would still need a bunch of stipulations on top of that to make sure it’s fair to the renter.
Assuming you do have all the right rules in place, what makes this setup more desirable than simply renting at cost?
Just so we’re on the same page, we’re still talking about OP’s question, right? My definition of parasitic requires being a net negative to the “host”. The threshold between parasitic and non-parasitic is at net neutral for both parties, and we’re discussing where that line is.
But resources aren’t being distributed fairly.
Right, because the system is broken.
That’s a rather arbitrary rule.
It’s basically co-ownership, which is already an established way to buy and own a property.
Assuming you do have all the right rules in place, what makes this setup more desirable than simply renting at cost?
At the end of your lease, if you choose not to renew, you still have equity in a property which is worth something, rather than ending up with nothing in the current system.
Just so we’re on the same page, we’re still talking about OP’s question, right?
The relationship between a landlord (parasite) and a renter (host) is absolutely a net negative for the renter*, because at the termination of the relationship, the landlord ends up with much more than they started with (equity in a property + profit from rent) and the renter ends up with less than they started with (lost money in rent payments).
Right, because the system is broken.
Exactly. So what’s not to understand? A broken system means problems exist, and you can do things to compensate for those problems. Things that provide value to others. Now, we can go into what it means to “need” something and whether we ever actually “need” anything, but that’s a whole other discussion and not the one we’re here to have. In this context, “someone needs to do X” means that doing X provides value to someone else.
It’s basically co-ownership, which is already an established way to buy and own a property.
Co-ownership refers to the ownership structure, doesn’t it? I’m talking about the threshold you proposed for the landlord-tenant relationship to not be parasitic.
the landlord ends up with more than they started with (equity in a property + profit from rent) and the renter ends up with less than they started with (lost money in rent payments).
And I’m saying it doesn’t have to be that way. Do we at least agree that if the landlords sets the rent at $1/month, then the transaction will be to the benefit of the tenant? And if you set it to market rates, then it benefits the landlord. There exists some middle ground between $1/month and market rates where it’s a net neutral.
Do we at least agree that if the landlords sets the rent at $1/month, then the transaction will be to the benefit of the tenant?
No. A tenant never gains anything once the terms of the lease expire. The property owner is the only one that gains, as long as the price of rent is a positive number.
once the terms of the lease expire
I feel like this is the main point of contention. No, you’re left with no new physical assets after spending that $1. But why is that a problem? Not everything is about physical possessions. If you purchase a meal and eat it, you’re left with nothing at the end of the meal. If you pay someone to move an old couch out of your home, then you’re left with nothing after they’re done. If you pay a taxi to drive you home, you’ve again gained nothing physical at the end of the transaction. But in all these cases, you’ve gained something, or else you wouldn’t spend your money there.
When you pay a landlord for shelter, you’ve exchanged some sum of money so that you’re protected from the elements and live to see the next day. Similar to buying a meal and eating it.
Lots of perfectly nice, pleasant, and moral people do jobs that make the world a worst place because of the circumstances they find themselves in. I would separate out how you treat and judge people, from the problematic systems that they might operate in.
But unless your aunt is only charging them what it costs her to operate the buildings + a reasonable hourly wage for the actual time she spends on the house every year, then yeah it’s immoral.
If she puts in 10 hours a month and charges rent that is equal to her costs (not the property / mortgage costs, but just the ongoing operating and maintenance costs) + 120hrs of her time per year x ~$25/hr (or whatever wage is livable in your area) then it’s fair, but realistically, assuming $6000 of property taxes, that would mean she would be charging ~$800 / month for that town home, and I’m guessing she’s charging a lot more. In effect, that means that she is making renters pay for her mortgages while she’s not working, and at the end of the day she will end up a multimillionaire off of her tenants’ hard work.
On top of the fact that there are undoubtedly renters who would want to buy those townhomes but can’t afford to only because landlords have bought up a limited supply and driven up prices.
By your logic, what happens when the roof needs to be replaced and it costs $15,000 to do that? The rent goes up by $15,000 that year? That’s ridiculous.
This is why rent is higher than a particular year’s costs – it includes capital costs over a period of time. $15,000 over 15 years is $1,000/year or about $84/mo. Add that to the cost of landscaping, utilities, turnover costs, plus a wage for the owner. Why is the wage $25/hour? Why not $100/hour? It’s a skilled job.
By your logic, what happens when the roof needs to be replaced and it costs $15,000 to do that? The rent goes up by $15,000 that year? That’s ridiculous.
This is why rent is higher than a particular year’s costs – it includes capital costs over a period of time. $15,000 over 15 years is $1,000/year or about $84/mo.
I was including predictable ongoing building maintenance costs spread over time as part of operating costs.
Add that to the cost of landscaping, utilities, turnover costs, plus a wage for the owner. Why is the wage $25/hour? Why not $100/hour? It’s a skilled job.
Lmao, no it’s not. It does not require a degree or any kind of specialized training. And tell me what landlord actually spend 10 hours per month working on an individual property, every month. If you want to nitpick the example we should lower that to probably 1.
How long have you been a landlord to know exactly how many hours a landlord works in a month?
Any landlord that uses a residential family home as an investment is a parasite.
If you want to invest in real estate, purchase commercial, retail, and industrial properties. Nobody needs those things to live. The reason why this is harder is that the companies who tenant these properties generally have the leverage and means to not get exploited (though some small businesses still do get exploited)
No landlords are “parasites”. Rental property owners provide a valuable service.
The only thing worse than parasites are the lifeforms that feed on their droppings. At least the parasites have enough self respect to merely suck blood.
By parasites, you mean people who don’t pay their rent causing an increase in costs for others.
Lol, parasite cope.
No definitely not. You’re adding nothing to the conversation so I’m blocking you.
There is no exception to stealing housing from other people.
If you rent to house mates, is that stealing? Do you need to have joint ownership with everyone?
I don’t think rentals should exist. You could literally put a house anywhere a couple hundred years ago, and all you needed to do was build it. Now we have artificially stunted the supply of housing to make good little worker bees our of everyone. The threat of homelessness and starvation is a fantastic motivator to not rock the boat in society.
Well, not quite. You’d have to have rights to the land to do that. Else someone could ride up and just take it from you.
Yes all landlords.
This is incorrect.
All landlords, regardless of how many properties they rent out, are ultimately producing nothing. They sit on property and leech money off of the economy. The scale at which it is done does not change the core “product” (which isn’t a product at all, in the traditional sense, because it is not produced). It’s a classic grift.
So, yes: all landlords.
Edit: in some sense, all forms of “passive income” follow the same pattern. Capitalism relies on money being exchanged for goods and services. Passive income is a perverse adulteration of that. Free money is not a thing.
Not everything people pay for produces a tangible object. For example, people pay to hear someone play a song. People pay to hop in an Uber to get from point A to point B – they don’t own the car they ride in afterwards.
People pay for services and there’s nothing wrong with that.
Renting is not a service. It is a passive income.
People playing a song or driving a car for someone else are performing a service.
Of course you don’t own the car when you get an Uber. Not sure the point of the comment.
Edit: I’ll also note that hedging on this issue of passive income is one reason why the wealth disparity in the US is so astronomical. If we treat passive incomes as services, we ignore the fact that they produce value from nothing. Every dollar made from a passive income came from an active income.
Passive incomes like property rental also make it exceedingly easy to contribute to generational wealth – one more way that wealth gap gets wider.
We must stop pretending that housing (and healthcare) can work using traditional business models.
Providing rental housing is a service. It’s a job, like being a waiter or a flight attendant.
Note that being a waiter or a flight attendant requires activity which directly affects the client – just like other services. Not true of landlords.
Owning a property and renting it out does not intrinsically equate to providing a service. In fact, the only activity one has to do (in many cases) is collect rent, which is a service to the landlord only. Landlords can offer services – improving the property, for example (though it’s a service which does also benefit the landlord) – but this is not intrinsic to property renting in the way of any service you mentioned.
And it certainly isn’t a job, in the traditional sense of having a boss and a schedule etc. I guess in some sense it is closer somewhat to independent contracting, except that you ultimately get to kick out your “clients” if you want to, and you don’t have to do anything they ask. Even by that interpretation, it’s money for nothing. “Job” suggests effort.
I assume you’re about to try and claim that paperwork and government hoops that landlords may have to work through means that they must, by definition, be a service. And to that, I would say: things that give you income are meant to require effort. But I’d gladly take over the paperwork for my landlord if it meant I didn’t need to keep giving him half of my active income every month for doing literally nothing, and I don’t think I’m alone in that at all.
You are mistaken regarding the activities that landlords do. And the lower the income of the tenant, the more work the landlord has to do.
Paperwork and dealing with government bureaucracy is part of the job.
Landlord activities directly affect the “client” which is the same in any service industry.
Being self employed still means having a job. Some people only know what it’s like to be an employee. They don’t know the ins and outs of running your own business. Perhaps that’s why you don’t understand the job of being a rental property owner.
Making money on the back of someone else with little to no work of yours is parasitic. Having enough money at one point in life to become a parasite doesn’t change anything.
Rental property owners do not “make money off the backs” of anyone. It’s about trading money for a service.
Sure. Having the means to pay something once, and have it be repaid multiple times back with little to no expense, sometimes not even the bare minimum to remain “legal” housing, is a “service”.
Your response tells me you don’t know what’s involved in the job and don’t care to learn.
Every person who gets money without working for it is a parasite.
There are good parasites, like kids, students or people that cannot work for medical reasons.
The rest are various levels of bad parasites, some worse than others, but all bad.
What about the stock market? Are people with 401ks parasites?
Landlordism is parasitic. The point of Leftism isn’t to attack individuals, but structures, and replace them with better ones. Trying to morally justify singular landlords ignores the key of the Leftist critique and simplifies it to sloganeering.
Thank you! Nicely put. The problem isn’t people like your aunt, its massive shareholder-controlled investemet machines that own thousands or even millions of homes. Your aunt probably knows eafh renter by name - there can exist a personal relationship. There’s two things limiting your aunt becoming a money-hungry antisocial ghoul:
- raising the rent is a relatively large amount of work for relatively small of a reward. If she raises rent she has to write these 4-5 renters a letter explaining why she has to increase it. Those renters might disagree, have objections, ask for reasons and proofs (like the central heating bill or maintanance costs etc). If she raises the rent by lets say 2% it’s 2% of not that much money (with her single digit number if houses).
- she is raising the rent on people she knows. She is taking money away from people she even may like - have a personal relationship with.
So increasing rent is a lot of hassle and her renters might like her less after that - which might be a factor.
Now lets think of the hugr real estate company. They have thousands of renters and maybe hundreds of employees. They have lawyers employed. If they raise rent by 2% they have to send thousands of letters. But these letters are sent by people whose job it is to do so. Tyey can calculate in advance that from their renters X% will just accept the nrew rent, Y% will require some manouvering, Z% might move out and so on. They can estimate the cost of raising rent pretty well based on experience and compare to the profits they make. And with thousands of apartmants 2% is a lot of profit. The employees have no relationship to the thousands of renters. Renters are just numbers anyway. Everything is much more efficient. Also: Shareholders. They demand profits and dont’t care how. They care even less aboht the renters. They demand more profit and will just say “make it happen”. If thr ceo doesn’t raise profits - with whatever means necessary - the shareholders will replace the ceo.
The soltion IMHO would be some progressive tax That makes it basically unprofitable to have more than 10 apartments. And to prevent legal entities owning other legal entities owning apartments in order to circumvent this. If there exists (and can reasonable exist) a personal relationship between landlord and renter everything is alright in my opinion. People usually are not animals to eaxh other if they know eaxh other personal.
And to prevent legal entities owning other legal entities owning apartments
This is one huge issue I have with our current end stage capitalistic system. If corporations are “people” then how can they own other corporations, which are also “people” right?
If shareholders want to own shares in multiple companies, they can still do that.
Based on the amount of vitriol I’ve personally received on this site for renting one property while I am temporarily relocated to attend school, the answer is yes.
For some reason everyone views being a landlord as easy money. But in reality returns on investment are worse than the stock market for being the landlord of a single family home.
Edit: Isn’t it funny how the critics below didn’t even ask questions about a specific situation where it does make sense to rent out an owned home? Instead of trying to understand why someone might make the choice they make, they sling insults and make wide sweeping assumptions to reinforce their skewed world view. Honestly it’s this shit that’s why Trump won. Leftists can’t see the forest for the trees and are willing to engage in ever escalating purity tests that only alienate other sympathetic voters to leftist causes.
I worked hard to be able to own my own house. Saved money and took out a loan. I never received a penny from my parents or some inheritance from a family member that died. A greater return on investment can absolutely be made by investing in the SP500, returns on investment for single family homes will be worse. The SP500 can be expected to rise an average of 10% per year. A single family home on the other hand will increase by 4.3% per year. With interest rates being higher than that level appreciation, there is effectively no profit from the leverage that can be typically seen by borrowing money. Renting is typically 37% cheaper than buying on a month-to-month basis. Owners don’t expect to Break-even on a home until after 5-10 years of ownership (depending on the city). Over 2/3 the cost of a mortgage go towards loan interest and taxes. Now what does a house get you then if there are all these downsides? Freedom. Freedom to decorate how you choose. To remodel, to build a deck, install Ethernet throughout the house, add an extension. But most of all, it gives long-term stability. After that 5 year period where a homeowner is taking a loss because of buying, they are finally ahead financially of a renter. This is why it doesn’t make sense to sell a home due to short-term circumstances, because owning a home is inherently a long-term benefit. Especially when one loses 10% of the the value of a home selling it when it would take 3 years for the home to even grow to the point where that cost is covered by increases in home value, which is not even remotely guaranteed, as evidenced by home values only increasing 0.12% after falling by 5% the previous year.
For some reason everyone views being a landlord as easy money. But in reality returns on investment are worse than the stock market for being the landlord of a single family home.
Then sell it, and put your money into the market. Now you’re no longer a parasite, and you’re making more money. Win/Win.
If that’s not a reasonable option, then what are you not counting in the entire return on your investment?
Edit: in response to your lengthy edit, I will note that you have expanded your “return” to include more than just the financial benefits. I will focus on one thing:
Now what does a house get you then if there are all these downsides? Freedom.
Correct. You are gaining freedom, literally at the expense of a tenant. That is exactly what we are talking about when we say that landlording is parasitical. They are buying your “freedom” rather than their own.
Maybe I want to move back into it… And selling has a 10% cost after realtor fees and closing fees.
So then it’s not worse?
