this post was submitted on 01 Apr 2024
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If you own housing that you rent out more than you use it yourself, you're a landlord.
If you rent out your house or apartment while you're on vacation, I wouldn't call you a landlord. But if you have a house or apartment that you only ever offer on AirBNB without ever using it yourself, you're a landlord.
Btw, I don't agree that being a landlord makes you deserving of a guillotine, but I do agree that we should limit the ownership of housing to natural persons, with a limit on how much space a person can own.
I appreciate a sane viewpoint.
Buy a second house, fix it up, then sell it OR rent it to help cover the debt and maybe generate enough income to retire early. It's one of not very many ways regular(ish) people can reliably climb the financial ladder or not work until 75.
Nobody needs 40 properties, but I don't see anything wrong with one or two. I'm not a landlord myself, but I've rented and owned and can see the appeal of a second property.
I can say that having only one rental... is not enough. We have started the process to sell our rental as we were only making < $1500/year on it. It just wasn't worth it. But if we had had around 3-ish rentals then maybe it would've been better as they could better support one another. We charged a lot for rent, but, after taxes, insurance, near constant repairs, and now the threat of not being able to secure insurance (due to companies leaving the higher risk area that we were in,) it just isn't worth the hassle for a single home rental unless it is next door to your own house, and you are doing the repairs.
My take is that 1-2 houses still isn't enough. Especially if you're trying to replace active income generation (jobs and such). Nobody needs 40 units (that would be it's own property mgmt. job), but one or two is most certainly not enough. I could probably get by with the income of ~10 if a property mgmt company was supporting me.
The problem isn't that people are trying to make money off of rentals, it's that people are trying to make too much money off rentals by raising monthly rates to rent-trap level, and low-to-non-existent repair-rates.
Yeah I kinda figured that was the case but I didn't want to sound like some rich prick that people here in the comments would like to eat lol. As I understand it, you're just better off taking the interest off your bank accounts vs trying to swing a single rental. Flipping can work but it requires an amount of skill that not everybody has, especially if you have to hire contractors to do the work for you. But yeah if I were to do it, I would probably run straight to a management company.
It seems to me that the average "slightly above average Joe" could afford a second property; my parents are not wealthy (they are semi retired and generally gross less than 20k/year, but own all their stuff outright) but found a house to rent to my brother and I while we were in college and it was a huge boon for everyone involved. My family income is significantly higher, but we don't have a pool full of money to swim in. From the outside it looks like real estate is an attractive, stable way to grow an investment as opposed to stock market dabbles.
As an aside, and this is all an incredibly "first world" kind of a situation, but I'm not sure how you address the bitterness of some circles (like maybe this thread?) toward the layer of people who got ROI on hard work: I'd also be a proponent of limiting legacy wealth and eating billionaires. I was in college for 15 years at a state school and worked 10 at a university before I made big boy money and got stuff on my own. Not everybody who has some extra money got it by lucky birth or by exploiting the masses and I've still got loans to pay, why not own some houses for people like past-me to rent and make a little extra for the effort? I guess it's easier to see it this way from this side of the problem.
I usually handle this by reminding people-at-large that landlords are not the problem. "Rent-seeking" landlords are the problem. I'd imagine that given the ARR-mindset of some of the larger players also contributes to the negative stereotype. Where the goal is not "Providing a Service", but instead it is "Building Capital", that's where I start to lose interest.
I too, feel that if your annual income is greater than 8 zeros, then you should get a plaque from the IRS saying "Congratulations, you've beaten capitalism this year, now go outside and touch grass." and everything above that is used to actually better society. This is what progressive taxes that were reduced 40 years ago were intended to do (Source: Effects of Reaganomics).