My point is simply that these things don't take care of themselves and need to be managed one way or another.
I’ve had all appliances replaced, a new roof (and a new ceiling when this leaked), the parking lot resurfaced twice, and a new water heater, endless bits and bobs (sink disposal, all new light switches, door knobs, fully new shower enclosure and faucets). Maintenance shovels snow, cleans up leaves, and de-ices. I have never mowed a lawn, shoveled snow nor done any physical labor at all- I’m still in good shape, there’s a gym and pool on premises.
My apartment is small, that’s why it’s inexpensive. But I won’t have kids and don’t need >1 bedroom. Already married for the whole time as well. Depends on how one wants to live their life.
- Property taxes
- Hazard insurance
- Debt service
- Some utilities (water, trash, sometimes even heat, depending on your rental agreement)
- Maintenance and repair of exterior and common spaces
- Repairs and updates after you move out, and before you move in (assuming you have not been in the same apartment for 20 years)
The value provided to you in the owner's margin includes:
- Flexibility of movement. Want to move at the end of your lease? No problem. (Need to sell to move? That will cost you 6% of the property sale price!)
- The security of knowing that you will never be hit by surprise maintenance costs. $30K for a new roof? Never going to be your problem.
- The ability to live where you want to! In many locations, there are no apartment-equivalent units for sale.In exchange for a fraction of what the real maintenance cost of a large repair will be, you get peace of mind that you will never be actually responsible for fixing it or footing the whole bill. The landlord gets to collect profits but one day will have to fix a major problem (and this is guaranteed -- houses wear down over time) that will require them to dip into said profits.
And then you have risk. There are levels of damage that will render the unit or units uninhabitable, wiping out possible years if not decades of gains. The margin is to (theoretically) protect against that.
Not saying this is the perfect system, and definitely greed has inflated these margins while reducing the value of services rendered, but this is the core idea behind it.
I don’t believe my case is particularly uncommon. In ~20 years of renting, ~$500k of rent paid, the total maintenance done on the units I’ve rented probably cost under $100. Toss in the most expensive paint and cleaning regimen after I’ve vacated, and let’s call it a cool $1,000. If the value landlords are providing is “maintaining properties”, their margins here are colossal.