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L.A. County wants to cap rent hikes at 3%. Landlords say that would push them to sell
(www.latimes.com)
this post was submitted on 09 Jun 2024
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Because they're over leveraged. They've purchased assets when rates were low and now that rates have gone up they haven't factored this into their profit margins and would either go under or not make enough.
It's disgusting. If you have enough money to play the game you should have enough money to live with the consequences and a tenant isn't your get out of jail free card for your shitty planning.
Ok. So they’re playing the old game of leveraging assets (properties) to buy more and painting themselves in a corner because of rates. Well, fuck these serial buyers squeezing the market. Hope they do get forced to sell.
What is this? Making risky business decisions and getting both private profit and taking private risk? Get out of here you damn socialist! America is when the profits are privatized and the losses are socialised!
Nobody forced them to make risky business decisions.
This is the consequences of their actions and shouldn't be anyone else's problem.
Exactly... you want to make a nearly risk free investment? Try a long term bank deposit or invest in government bonds.
I agree 100%
I don't understand. If they get a fixed rate at the time of purchase what difference does it make that rates have gone up?
Very often these aren't traditional fixed-rate mortgages. That's what they probably have on their "primary" home, but when you're buying homes with the explicit purpose of using them as income generators, the landscape of available loans changes.
Thank you for a very well explained response. Also in countries like Canada mortgage terms are redone every 5 years on average making us much more susceptible to rate changes than in America.
That’s pretty disgusting. Would do nothing but make you move every five years, and banks are going to screw you over every five years.