Re:How housing became the world’s biggest asset class
by refurb on Wednesday January 22, 2020 @02:51PM
(#22121292)
As a renter, you may not pay directly for property tax and repairs, but they do come out of your rent
Yes, but what the landlord is paying may be very different from what you'd be paying if you bought.
For example, I know a landlord charging $3,000 per month for a place that would rent for $5,000 (rent control) or have carrying costs of $6,000 if purchased today.
He does just fine since he bought 15 years ago, so his mortgage is $1,500 and his property taxes don't go up more than 1% per year.
So yes, rent must cover the cost of ownership, but not the cost of ownership today.
Re:How housing became the world’s biggest asset class
by usaar333 on Wednesday January 22, 2020 @12:30PM
(#22119780)
They come out of your rent, yes, but at least in markets with low supply (think the Bay Area), your rent is not being set by the presence of property taxes and repairs.
That is, if we raised everyone's property taxes by 0.2% or so, approximately speaking, no one's rent would go up.
As a renter, you may not pay directly for property tax and repairs, but they do come out of your rent, unless your landlord's business is unsound. Maintenance costs the renter time and hassle too, although depending on the work done, perhaps less.
Certainly, relocation friction is higher, although some turn that into an opportunity to be an absentee landlord in a way that's more satisfying than subletting.