[jjav]

> landlords also hold little risk

Landlords hold all the risk. There's risk of devaluation, risk of renters destroying property, risk of unexpectedly high maintenance costs, risk of insurance/taxes going up more than planned. If anything bad happens to the property, the renter can just walk away, the owner is stuck with it.

I'm not a landlord, sometimes look into it but every time conclude that the risks are far too high for what minimal profit it might bring. So I stick to index funds.

[pnutjam]

In what world are owners "stuck" with property? The bought an asset, the can sell an asset. Yes, they may need to absorb some losses, but probably not more then then several thousand it will cost a renter to move if the landlord does any number of things in addition to the risks you outlined above.

Yes, landlords have risk. My original point was that renters shoulder the same and more risk.

[jjav]

By "stuck with it", I meant stuck with the problem. e.g. flood damage renders the place unihabitable (nearly always not covered by insurance even), renter packs up and moves, owner is stuck with the problem and the expenses.

[aantix]

Rents are small portion of the overall loan size. They have a limited contract.

Less time and monetary exposure.

Renters incur less risk.

[pnutjam]

The amount a landlord is likely to lose is more then likely less then on years rent. The renter assumes the risk of one years rent and carries that, albeit diminishing, ever year they sign the lease. There are multiple issues that could cause the landlord to lose the house, all of which would also impact the renter. There are multiple issues that could cause the renter to lose their lease, only some of which impact the landlord.

The renter is more likely to carry the financial fallout longer, because they have no assets backing their risk.