this post was submitted on 13 Sep 2024
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That's the naivete of the Internet talking. Of course landlords create value; they do so in exactly the same way lenders create value: they absorb risk by amortizing upfront costs and charge a premium to do so.
If you didn't agree that it's an ethical way to participate in the economy, say that. Don't try to pass off a moral judgment as an objective truth.
There's no Value created by risk, that's an ad-hoc justification for profiting endlessly off of labor performed one time long ago.
Houses are not "one time labor.". Housing requires constant scheduled maintenance and upkeep over time.
Not to mention the financing required to pay for it all,which is normally spread over 30 years.
Building a house is one time. Maintenance creates Value, yes, but one only needs to compare the cost of maintaining a house with the cost of renting it to see that the vast majority of profits come from rent-seeking. It's non-productive extraction.
car and house Insurance both provide value by reducing the capital investment required to continue having an item, landlords reduce the upfront cost of housing by charging a continuous fee instead of a lump sum.
Insurance is perhaps the peak of Financial Capital masquerading as Value.
what about banks?
Same problem, arguably far worse. Consider reading Imperialism, the Highest Stage of Capitalism. Banks play a huge part in the dominance of Financial Capital.
Rent seeking does create value: it provides a place to live. That is tangible value. There is no “one time labor” in this equation. The landlord continually pays taxes, insurance, maintenance, and other regular outgoings regardless of whether he bought the house outright or not.
The tenants literally pay the taxes, insurance and maintenance in their rent payment. When any of these inflates, so does the rent unless there are protections in place.
So being a landlord means someone else pays the mortgage for your unit.
The only thing that could be seen as a service are short term rental, and even then, it was abused to death by the AirBnB/VRBO and any other short term rental service.
Rent seeking is the most capitalistic thing someone can do : you use your money to get someone else to pay your rent. You do the minimal maintenance that you can get away with, and when you actually do real maintenance, your tenants get a rent hike.
If there weren't any landlord, there would still be housing. But a lot more people would own the place they live in, at a reasonable price, instead of housing being used as an investment vehicule.
Your argument is more aligned to capitalism in general rather than something particular to landlording. Your argument is applicable to leased vehicles and other businesses as well. Your argument incorrectly rests on an assumption that landlords simply raise rent high enough to cover all their overheads, but like any other business, landlords are beholden to market rates. If the rent is too high, then you have a smaller pool of potential tenants and it's less likely they will be long-term tenants. Also, if a landlord has mortgaged a house to rent out, it's unlikely that the rent he can collect would come near to covering the sum of the mortgage, the rental-insurance costs, the property taxes, maintenance, and other services. Property taxes alone can be several month's rent. Whenever someone assumes that mortgaged landlords are skating on rental income, I assume that someone doesn't know the true costs of owning a house.
What's really happening for mortgaged landlords is that they are using your rent to build equity in their investment faster than they could otherwise.
The prevalent anti-landlord sentiment seems mostly to stem from bad experiences, rising rental costs, and the notion that landlords are somehow "getting something for nothing". Only the first two points are fair grievances. If you're going to take it further and propose that the owner of an asset (real estate or otherwise) cannot hire their property out, then you are striking at Capitalism itself. If you then nuance your argument by proposing that housing is a special case, and that housing rentals should not be a thing because we all need houses, then you're obliged to consider other businesses as well. One might consider owning a vehicle essential to life; should we do away with car rentals? After all, you're paying Hertz's overheads. Groceries? We all need to eat right?
That's useful, but not Value. Value isn't as simple as "use."
Get him
Landlords also do repair and maintenance (jokes aside) to maintain the property in good working order / habitability.
At least, they are generally required by law to do so. Your laws may vary.
Landlords also prep the unit for habitation between tenants and handle all of the paperwork for rent and utilities (depending).
Maintaining housing is very expensive, and many people cannot afford to just drop $25,000 to redo a kitchen or reroof a building when it is required.
So landlords are basically the middle manager between your living at the property, and all of the maintenance and financial details. You pay rent to them for that service.
My landlord doesn't do that, they have a property manager that does that stuff. Ive never even seen my landlord. If the landlord does it, then they are not doing landlording, they are being a property manager and landlord, but they don't necessarily have to, and one doesn't require being the other.
That’s disingenuous. The property manager very much is NOT paying $30k for a new roof. The landlord is. The property manager just executes the maintenance plan the landlord is paying for.
The real problem here that these kinds of discussions usually miss is the system of laws that force everyone involved to treat housing as an investment. Housing is a necessity that the government should ensure availability of for all. Some countries get it right, like Germany where the laws pushed so much reasonably priced housing that rent isn’t even painful so tons of people don’t bother buying
Paying for a roof isn't work. It's not producing anything, transforming anything, or doing labor, and it takes no time. It takes 30 seconds to cut a check. And they're using money I and other renters have paid them because we can't afford a house, despite very much wanting to, because of how expensive housing is due to landlords buying up all the properties lol. You can tell it's not a real job because a lot of landlords have full time other jobs. Or it's why being a landlord is also a great way to get money for old people who can't work and maybe haven't saved for retirement nor have a pension.
I 100% agree that the problem is that housing is an investment. Real estate investors should not be buying homes to make a profit at the expense of available housing. I haven't heard how the situation is in Germany, but that's good. I heard Tokyo also does it right, where housing depreciates like a car, because they have so much.