[saiya-jin]

Yes, and you are exposed to myriads of risks that tenant isn't either - property market crash, tons of possible environmental disasters, issues with plumbings, fires, damage done to property, gradual degradation of, well everything.

Another thing is the amount of time and energy invested into acquiring, renovation, maintenance and improvement of the property.

Financially any of those, especially market crash can ruin you for life - how do you want to price this massive risk in rental price?

Ever tried to buy a property? For mortals getting mortgage, its such a stressful experience even for simplest type - obtaining already existing and equipped flat, that it easily breaks relationships and marriages.

I understand the tenant point of view to try to pay as little as possible and have as big choice as possible, I am also in that camp, but there is other side (and I don't mean some super rich or people inheriting big properties by being lucky with birth).

[bluedevil2k]

All this, plus you forgot taxes & insurance. Not even homeowners insurance, but liability insurance in case someone hurts themselves on your property. You need to cover times it's not occupied, pay for a property manager, any legal costs when a renter abandons the property and you need to instantly evict them, clean up costs between each tenant.

Building equity on a property backed by a mortgage is such a slow process that the only way to make profit (in my real estate market) is to eek out a thin margin every month and cross your fingers nothing breaks.

[michaelscott]

Yes, and you are exposed to myriads of risks that tenant isn't either - property market crash, tons of possible environmental disasters, issues with plumbings, fires, damage done to property, gradual degradation of, well everything.

A property investment, like any investment asset, is a bundle of risks as well as rewards. Yes, you as the owner take on the risk of things like market crashes, insurance and repairs but you also own an expensive asset which you can sell at any time (a renter cannot). You need to deal with the risks and rewards of a property like you would any other asset.

[r_smart]

Right, and you price the rent based on that risk profile. A price that is absolutely going to be higher than the mortgage, unless as another commenter pointed out, there are incentives & tax breaks that cover the cost you would otherwise bear.

[michaelscott]

The risk profile is carried by the asset owner, not the person making use of the asset. I buy equities, fixed income assets and bonds based on my risk profile, not someone else's.

[r_smart]

Riiiigggghhhhtttt....and at a selling price determined how?

[lallysingh]

Yup, but the difference is that some of your appreciating asset is being paid for by someone else. In some cases that's worthless, in others quite valuable.

As for pricing, the market does that for you.

[anoncoward111]

When it works, it works really well.

When it goes wrong, it fails catastrophically.

That is to say, the variance of slumlording and poker arr probably equal :)

[lallysingh]

Yes, investments involve risk. If you believe that another cataclysmic crash is coming to the real estate market, then stay out. If you think it's unlikely, it can be a relatively low risk investment for the returns.

[anoncoward111]

I definitely agree, but I wouldn't say the market crash is the biggest risk.

Tenants who damage the property and withhold rent are way worse.