That's not realistic in most cases but we saw one rental property which looked crazy profitable that was full of Section 8 tenants. We passed on it because it was really buying yourself a job as a social worker and the fact that we were bleeding hearts would make it harder, not easier. I think my wife and I have gained the maturity that we might be able to handle that now but we've also gotten better at setting boundaries such that we wouldn't.
Some Section 8 tenants have complex interactions with their neighbors and their environment, and I think eviction of Section 8 tenants is harder too.
What is often forgotten in these cases is that being a landlord is not an identity, but a choice. It's hard not to feel like the housing market is basically a cartel run by small homeowners across the country conspiring to make home ownership as inaccessible as possible in order to make the value of their property as high as possible. I would love to purchase a home, but even 10 years of a software engineering salary are not enough for that in NYC. And so I will continue to rent, and I will continue to advocate for expanded tenants rights.
This resulted in pretty much zero rent increases across the 15 or so total years renting from such individuals. I had exactly one rent increase during that time due to a large property tax increase which I found to be reasonable.
Sometimes the small time landlords were a bit rough around the edges, but were good people trying their best. All emergencies were handled quite rapidly, and the non-emergency stuff I was quite capable of mitigating myself. I appreciated not having to do basic home maintenance due to my lifestyle at the time. I traded money for time.
I did not live in a city with good tenant protections whatsoever. If you stopped paying rent, you were evicted within 45 days or less.
Corporate landlords were the direct opposite experience. I avoided them like the plague until I bought my own home.
Tenant protection laws in some states have gone far too far in the tenants direction. I think societal incentives need to be reset to make rental units much less subsidized and lucrative, but I can't really fault individuals engaging in the practice. We setup the tax code on purpose to incentivize such behavior. Roll that back and you will see incentives re-align.
Tenants rights should not include the right to basically be a nuisance and a leech upon society. Professional tenant grifting should not be the profession it actually is today in many localities. It harms the rental market and society itself. A single bad tenant should not have the ability to ruin a small time landlord no matter how you feel about the ethical position landlords happen to be in.
It's a regulatory moat as much as it is tenant protections.
Sell it
I'll probably end up selling it. Then it will get torn down and replaced with 4-6 units at US $800k+ each. It's hard to walk away from $4.8 million in development potential. I would be lucky to clear $900k selling it.
I can think of a couple who were absolute nightmares. I can think of a couple others who were an absolute dream. The worst small-time landlord was WAY worse than the worst big property management firm, but the best small-time landlord was far better than the best big property management firm I've been a tenant of.
And yeah, I'm also a low-maintenance tenant. Unless something's broken, I never want to talk to you, nor do I want you in the space that I'm renting. EZ money for them.
> Tenants rights should not include the right to basically be a nuisance and a leech upon society.
The thing about strong tenants' rights laws is they're not protection against reasonable landlords; they are a shield against scumbag landlords who would treat their tenants very poorly.
For example, in San Francisco, someone who stays in a place for thirty days without a lease becomes a month-to-month tenant that requires an eviction to remove. Why? Because scumbag landlords would refuse to provide leases to tenants and toss them out into the streets on a moment's notice.
Similarly, I recall regulation preventing hotels from requiring tenants to check out and then check back in during extended stays. [0] Why? So that scumbag hotel operators can't prevent the long-term rental regulations from taking effect for renters who are -in fact- long-term renters.
To point at an analogous situation: the same rules and regulations that generally prevent cops from putting very, very careful wrongdoers who should be imprisoned (but haven't left enough evidence to prove their wrongdoing) behind bars generally also prevent cops from imprisoning folks who have done nothing wrong just on those cops' say-so.
[0] Though, I'm unable to muster the effort required to locate this regulation.
There should be mechanisms where through a process tenants can legally withhold rent if basic repairs or maintenance aren't being done. If a landlord can't or won't do it, they shouldn't be a landlord.
Evicting a tenant should be hard or expensive for any other reason (selling the property, landlord wanting to move in, etc).
I have mixed feelings around rent controls, though. In a healthy, competitive market they should be unnecessary over the long term, but if cities are going to restrict housing construction...
They're a (terrible-outcome-causing) band aid over a combination of too many people and not enough construction.
A simple cap on rent does not work, true. But comprehensive policies to keep rent down and local people housed, can work
For sure - making sure demand doesn't massively for housing exceed supply of housing is all you need.
Look into California's state-wide property tax control law commonly known as Proposition 13. Then look into California's anti-rent-control law commonly known as Costa-Hawkins.
I do agree that rent control should never, ever have a reason to exist. But sometimes there are super fucked-up situations on the ground that make rent control better than not having it.
Sure, if you stop paying, and if there isn't some sort of temporary hardship that you could reasonably fight your way through to make good on back and current rent. Given what you've written, I expect that you know that that's part of what the eviction process is for... determining if the landlord is lying about the state of the tenant/landlord business relationship and determining if letting the tenant stay in the place for a while longer would result in a far, far better outcome for the tenant and minimal harm to the landlord.
> I have mixed feelings around rent controls...
I don't. Rent controls are godawful price distortions that should not have any reason to exist. However, I'm very glad I live in a rent-controlled San Francisco apartment. Why? Because every landowner in the state of California has property tax control, regardless of whether their property is their personal home, a residential rental, or most any other commercial property.
It's massively unfair that landowners across the state get to control a huge part of their costs, but it's illegal for all but a very few cities in the state to permit residents to do the same. [0]
Get rid of the property tax control across the board, wait a year or four for everything to shake out, then I'd be fine with getting rid of rent control in California.
[0] Seriously, Costa-Hawkins can go straight to hell.
Unless it's public housing (which for the record I do support, though I think that in practice it should be at the margins in most jurisdictions), landlords shouldn't be part of the social safety net (unless they have some extra tax advantage in exchange - fun fact is that as much as hospitals whine about the costs of having to treat everybody in the ER regardless of ability to pay, they actually have a very generous tax benefit for it). Having temporary unemployment/hardship vouchers up to some max is one thing, but if you can't pay after a certain amount of time you shouldn't be in private housing. Maybe 60 days is too soon, but in many jurisdictions it can be far, far longer. I am not at all opposed to a due process in withholding rent if the landlord side of the contract is not being upheld, my example was for "I can't or won't pay for some non-housing reasons".
I pretty much agree with everything you said about rent controls, which is why I said "mixed feelings". California, arguably the greatest state in the union, is ungovernable due to the fact that the government literally can't govern when it comes to taxation (and even mandated spending). If there is a healthy market where supply and demand can be balanced, there should be no need for it.
Oh, I very much am. But I'm also keenly aware of the need for strong, well-enforced regulation in order to maintain functional markets so that we continue to have a strong capitalist system. The US is sorely lacking in the "strong, well-enforced regulation" department, so...
> ...landlords shouldn't be part of the social safety net...
This is a distinction that's not at all clear.
In nearly all jurisdictions, landlords give up very many of their property rights when they rent it out for folks to live in. For example, they are expected to meet basic habitability requirements (and cannot fob responsibility for this off to their tenants), and are very often barred from wandering into their property whenever they feel like.
Some landlords out there would argue pretty strenuously that the raft of restrictions they're burdened with means that they already are part of the social safety net.
I would argue that providing rental housing to people who can't afford to buy in the area is totally being part of the social safety net.
> ...unless they have some extra tax advantage in exchange...
Man, landlords (especially ones in "hot" areas) get so many financial advantages. I'm disinterested in giving them more.
> ...if you can't pay after a certain amount of time you shouldn't be in private housing.
Perhaps this is what you meant by "vouchers", but what if if The State covers the missing part of the tenant's financial obligations to their landlord? If the tenant's fallen on hard times (but is otherwise a fine tenant), why should the landlord care where the money comes from? The problem with "Just go live in public housing" is that in so many places, public housing just doesn't exist.
The TL;DR is of course there are edge cases for everything. There are reasons that are perfectly "fine" for rent being late, etc. I could have had a personal emergency. My bank could have had computer problems, etc. There are also reasons it can take time for a landlord to fix something. I may as a tenant willingly prioritize cheaper rent, knowing that my plumbing issue may take longer to fix as a wait for a cheaper plumber not on call 24x7 can take longer.
There are deadbeat landlords and there are deadbeat tenants. IMHO, whatever the law dictates should make it suck to be either. If a rule needs to pick a side, it should probably tilt to the tenant as a landlord should otherwise know what they're getting into with risks, etc.
> In nearly all jurisdictions, landlords give up very many of their property rights when they rent it out for folks to live in. For example, they are expected to meet basic habitability requirements (and cannot fob responsibility for this off to their tenants), and are very often barred from wandering into their property whenever they feel like.
This is not true everywhere. In many parts of Europe, the tenant is responsible for almost everything after it exits a wall, including in cabinets, a good chunk of plumbing, utilities, and appliances (this is particularly true in Switzerland and Germany - there are many stories of perplexed foreigners moving into apartments they saw that was still being used by the previous tenants and seeing striped down kitchens, etc).
> Some landlords out there would argue pretty strenuously that the raft of restrictions they're burdened with means that they already are part of the social safety net.
This is true. Like many people, I've lived in sub-standard housing in my student days. Hilariously, I look fondly on that era of my life because I knew it was temporary and of course we prioritized alcohol, fun, etc.
There's a very real problem that if one removes "rundown" housing that it usually just removes the cheaper rung of the ladder, making it harder for poor people to live anywhere. Some jurisdictions provide specific programs (vouchers, tax advantages, etc) for providing "low-income" housing to cover this. Some, in particular "champagne socialist" groups, use it to push out undesirables.
> I would argue that providing rental housing to people who can't afford to buy in the area is totally being part of the social safety net.
Then I think landlords should totally get supports, either directly or indirectly. I just don't think a rental unit that's geared to professinals, etc should be part of that.
> Man, landlords (especially ones in "hot" areas) get so many financial advantages. I'm disinterested in giving them more.
I agree with what you're saying. Any new policies should be holistic and take full stock of what rules are already present and replace a lot of bad ones.
> Perhaps this is what you meant by "vouchers", but what if if The State covers the missing part of the tenant's financial obligations to their landlord? If the tenant's fallen on hard times (but is otherwise a fine tenant), why should the landlord care where the money comes from? The problem with "Just go live in public housing" is that in so many places, public housing just doesn't exist.
I meant vouchers or public housing as an example of a long term policy, I don't think it should be a short term solution to sudden rent issues. Taken holistically, temp housing support could happen via unemployment benefits that could take rent into consideration (I'm assuming there's also a good reason the tenant doesn't have savings or can't move in with relatives, etc). The issue is that employment insurance, housing, welfare, etc are often the responsibility of different levels of government, making holistic policies more difficult.
This is basically my experience I wrote about above, the downside risk for mom and pop landlords is way way worse than corp landlords in my experience (and pretty much everyone else I know).
1. New landlords bought a place I was living in and wanted to do in their words "minor upgrades to the house", but during the construction they would "keep it livable" and not require me to move. I came back after work one day to my water being off (and a toilet removed), and they didn't turn it on for two weeks after that (and kept the toilet removed). I had to get a lawyer involved for rent reimbursement.
2. My water heater broke and flooded my house in the middle of the night. The landlord took 1 month to start fixing the completely flooded apartment, and then the landlord tried for a year (threatened legal action as a bluff) to get me to pay for the new water heater despite it being their property, and maintenance being in the lease as their problem. I obv never paid because it was basically just a shakedown.
3. My landlord tried to just not pay me a month of rent owed after they sold the property with me living in it. He called me several times trying to "make a deal", and I told him that it was a cost associated with him selling the house and that I would not leave until he paid me the month owed. He waited until literally the last possible day to pay me and yelled at me on the phone that I was being unfair despite it just being money he owed me.
Every corp landlord I have had has been by the book. Yes my rent has gone up marginally, but at least there is a paper trail and they do not try to do any of the crazy stuff I just described.
That being said, I did have one mom/pop landlord who built me a deck with a bike locker over the course of a summer once, that guy was great.
I would never want to be a renter again, and I also have no interest in becoming a landlord.
I tried to rent most from mom and pop landlords but the ones here in the Bay Area have been mostly terrible to deal with. I even had to take one to court. I think you’re extremely lucky to just have one increase over 15 years. Conversely, the corporate ones were much easier to deal with it (although the promptness of repair is 50/50).
> I would love to purchase a home, but even 10 years of a software engineering salary are not enough for that in NYC.
You now have an investment returning a fairly steady ~10% annually, which matches the returns on some pretty bad junk bonds, however on paper your risk is much less. Or you could live in it and just get the 6-7% annual return, with even lower risk.
That's why the apartment costs $1M.
* Rent control means that tenants are paying less than market rate.
* Extremely low property tax rates combined with anti-development policy mean that asset price appreciation exceeds rents by a significant amount.
Stop controlling rents, tax the hell out of these people, and one way or another spend it on residents, and you are exacting a redistribution of wealth that doesn't distort the market in a way that leads to slumlords.
Additionally, I can’t think of any homeowner who will vote to increase their property tax, especially if it’s already based on a $1M house.
It's pretty black and white - either the landlord asked a price in line with local wages or they didn't. If they go too far,the landlord gets punished with expensive vacancies, or they loosen rent/income requirements and get punished with even more expensive evictions.
Point is, landlords aren't gangsters who can demand whatever number they pull out of their arses. They have to keep rent a reasonable ratio of local wages or they feel the pain.
In New Zealand the only accessible way for the moderately wealthy to save is property (a failed financial system)
So there is a proliferation of "mum and dad" landlords who have huge political power, two "investment" properties, and they make life hell and insecure for renters
I rented until I was in my forties, and that is what it was like. They are not all bad, but many cannot believe that their tennents own their home, if not the property it is in. A landlord can not "drop by" for any reason, legally, but most importantly, morally
Being a landlord should be a business. Nobody should have tenants in an "investment" property. It is a conflict of interest and a power imbalance that immiserates the tenants
On top of that the poorest 60% are handing over the lion's share of their income to the richest 15%
So much needs to change....
Unfortunately the local mom and pop landlords get wrecked by this while only the big corporate landlords have the resources and scale to weather these situations.
If, say, 5% of the population is crazy, and make for bad tenants.. then owning 10-20+ units puts you in a position of always having 90%+ of your revenue coming in.
If you have 1 unit then most of the time you are OK, but every once in a while you may lose 100% of your revenue for 3-12 months, while you have to keep spending on mortgage/tax/utilities, plus lawyers, repairs, etc.
People don't fall for drugs on their own - the utter, utter majority fall for drugs to self-medicate for whatever crisis they're facing. Be it perspectivelessness, losing a family member or one's job - across the Western world, governments have completely given up supporting people who hit a rough patch in life, and now it's a situation that is very, very hard to resolve.
You're right but we are so far from this now I can't imagine it being possible until one or two full generations of people die out and we start teaching empathy
If mom-and-pop can't cope with the responsibilities of being a landlord they should sell up to someone who can, not expect to be let off the hook when they make someone's life a misery.
Also, if a property did have an ADU in it, and someone was renting it out, a prospective buyer who didn't want the responsibility of being a landlord would find that a huge negative, which would decrease the value of the property to the existing owner, and provide additional incentive to avoid constructing the ADU at all.
If I were looking to buy a home, then a home with a tenant-occupied ADU is less desirable than an otherwise identical home without the ADU. The hassle and risk outweighs the rental cash flow.
Landlords generally can't suddenly increases rents. It happens only at the end of lease, and everyone knows when the lease is going to expire, and you have 1-2 months at a minimum to negotiate the lease renewal. If a landlord suddenly increases the rent by a lot (although most leases, or city laws, cap max rent increases), it will be disruptive to you. But your worst case scenario is to move to another market price rental in 1-2 months.
For a landlord, a tenant who stops paying rent, damages the place, etc is a much bigger financial and logistical risk. In most places, it's a lengthy, high-effort process to evict a bad tenant even when you have documented evidence. This is a very difficult scenario for a mom and pop homeowner, hence rules should be different for them at least, compared to large corporations.
And in your good (but overzealous) intent to protect the general majority of good tenants, you're not realizing that thenet result of the above is:
- Landlords are hesitant to rent their places or ADUs unless they really need the money, which reduces supply, thus increasing rents
- Landlords have to charge higher to account for the risk of a bad tenant, as well as for a complex eviction process, thus increasing rents
Rent control like laws benefit current renters, in their current properties, while harming both landlords and importantly for your pov, future renters, including current renters in their next rental. But since this cost is diffused to the future, it's easy to ignore and forget.
The problem is, then you end up with structuring/smurfing. It's already a common thing in real estate to have one LLC per each building in a development to prevent creditors from clawing money back from the actual developer corporation/fund, no need to entice this even more.
Besides, small landlords already are notorious for egregious violations of regulations. Creating effectively two classes of renters doesn't solve the problem, at all.
The dwelling rental niche is far beyond over-farmed and is definitely overhyped. As with so many other things in our economy, the big players are usually the only ones with decent margins, and even they have to cut corners and be somewhat lucky on dice rolls to get them.
Exception: one guy, well aware of these issues, had a hack for it—he only owned houses near medical or nursing schools. Nursing and medical students pay their rent and don't trash the place.
I had a tenant who decided that he did not have to pay the rent, it took months of trying to reason with him, we hired a lawyer and went through the process which took several months, in the end the tenant stayed on a few months past what would have been the eviction date but at least he was paying rent. Between that and another tenant losing her shit we lost at least a years rent plus still have a unit vacant even though we have been using the time to catch up on maintainance.
I’ve seen other small landlords in the same situation where they were psychologically devastated by the process of dealing with a bad tenant and evicting them. Right now my wife is helping a friend who inherited two homes from their parents who recently passed away which might have been a takeaway and not a gift because she has yet to clean up the mess left behind and struggles to with precarity (doesn’t have a working car, can’t find the title abstract and will have to cough up a few $1000 to be able to sell, …) renting the place out for a few years made some money but probably resulted in lost value in selling it.
The juiciest gossip in our small town us that the owner of an equipment rental company (probably able to afford to do it right) attempted an illegal ‘self-help” eviction by crashing into the building with a backhoe which is not only an own goal in terms of property damage but could probably cost $10,000 or more in court. (A friend of our who has struggled with homelessness got a settlement of that much for being illegally evicted by the homeless shelter when it closed but then struggled to cash the check because he had no bank account an no id to create a bank account…)