[stevecalifornia]

As a landlord of single family homes, I have to look at the detailed credit history of potential tenants. Before I even get to that stage I let them know the income requirements, etc. so usually we are looking at the top 3 applicants out of the 30 that applied.

With almost no exception, the renters make horrible financial decisions that set them up to work until they die. The average credit report I see is about a 500 and it's filled with missed payments, loans sent to collections, etc. Then, right at the top, in the last two or three months will be new loans for expensive cars and jewelery. It's mindboggling and sad. Most of my tenants have a nicer car than me (I own a pretty vanilla $30k sedan).

The renters usually come just above the 3x income to rent ratio and they never fail to pay their rent. But I don't really ever forsee them owning a home if they continue to make luxury purchases that prevent them from saving. The loan industry really enables a life of debt.

[fathyb]

> The loan industry really enables a life of debt.

It really does, and I've seen so many people fall into it, especially at the beginning of their career. Financial responsibility should be something taught early on at schools. With cryptos today, maybe even with the risks behind investing.

That said, I'm glad I live in the majority of countries where someone more privileged than me cannot judge my financial decisions to give me access to housing. I consider myself financially responsible, and credit scores aren't a thing here anyway, but I find it very disturbing.

[josephcsible]

What happens in your country if you move into a house and then just stop paying?

[into_infinity]

It is pretty unusual in most parts of the world for landlords to get access to one's credit records. Credit reporting is a pretty US-specific phenomenon, even if you're applying for a bank loan or a credit card.

You usually present proof of earnings and possibly references from previous landlords. And if you get unlucky - well, same as in the US, in many of the nicest markets, you're facing an uphill battle to evict people.

[oezi]

I guess it depends per country. In Germany it has become common that the landlord will require a credit score (called Schufa) plus the things you mentioned (3 months of pay slips, references of balances paid from past landlord).

Strong data protection rules have made it that there is now a credit score report which is only giving you a pass/fail so that landlords don't know too many details.

[wink]

AFAICT Schufa is not like a US credit score. It's just OK/NOT OK, or a list of "infractions".

Which means if you always paid your stuff on time, a virtual +1 is the same as a +1000, and the visible result will just be "OK" and after a while the entries will age out if it was a "NOT OK"

[dazc]

In the UK you invariably rent through an agent who has access to credit reporting, the cost of which is passed on to both you and the landlord. If you're self employed or a company director then there are a few other things you have to pay for, £45 to look at your balance sheet, for example, which is freely available to anyone else.

I know a few landlords and despite the efforts they take to find the perfect tenant, they all have tales to tell of people who passed all the tests with flying colours but soon turned out to be a costly disaster.

[EVa5I7bHFq9mnYK]

US has very strict non-discrimination laws in housing. Requesting credit reports is a way to circumvent those laws.

[sadpasture]

Standard practice in Germany, although the credit system here is a bit better than the US since it works by "demerits" rather than "building credit". Meaning you start out high, and only lose credit if you fail to make payments on a loan.

Also I think landlords can only see a high level summary and final score, not the details of your financial situation.

[pcthrowaway]

Completely normal in Canada also

[tpxl]

One of three things happens in my country:

* A mafioso comes for a chat with the tenant and they move out. This rarely happens.

* The case is presented to court and they'll evict the tenant in about 2 months. This usually happens.

* The tenant has small children and is poor. The owner is fucked as the court won't do anything - the tenants children have a basic human right to a roof over their head. This also rarely happens, but when it does, the damages are huge. My great aunt lost 1-2 years of rent and about 10k in damages due to neglect this way.

Because of this, there are interviews for tenants. Mostly just a chat, but rarely you need to prove you're employed and provide bank statements.

[walkhour]

What happens in most cases is that rents go up, because landlords have to factor in this uncertainty. And the debt of the non paying tenants is collectivized.

[yakak]

Rental prices are based on the rental market price and then affect house prices. A landlord deciding they aren't going to make enough for their risk at the market rate and selling doesn't change much as whoever buys either stops renting or is going to rent it out.

[FrontierPsych]

>Financial responsibility should be something taught early on at schools.

100% guarantee that this does not matter one iota.

I've tried and tried to help so many people with their financial picture. You would have more luck talking to a brick wall.

People don't care. They just simply do not care.

This is because most people - maybe 95% - are ruled by their emotions rather than rationality. Or to put it more precisely, people make decisions based on emotions and then use their rational mind after they make their decision to rationalize their purchase.

Also, becoming financially responsible is just about the simplest thing to do, at least at the beginning stages. All it requires is addition and subtraction, mostly, which we learn in second grade or whenever it is. Second grade.

I remember opening my first savings and checking account when I was 15 years old (when you could do it yourself without parent's permission). The person who helped my took about 10 minutes to help me understand, that's all you need.

The internet is inundated with videos and classes on basic financial knowledge. I'm sure that I could go to Udemy and find 500 courses on basic financial training and pay $15 for it....hmmm, let me go check right now...ok, typed "personal finance" in the search and it came back with "6,496 results for “personal finance”"

People don't take those classes because they don't want to take them. Probably personal finance is one of the topics that is #1 for total courses available.

Honestly, personal finance is so easy. It is just about the easiest thing to do. Sure if you get into complicated stuff, if you have $200 million in the bank/assets/whatever, maybe it is hard. But for the general person, no, it is simple. And the part that someone doesn't get, there are a ton of videos and articles on that, too.

I have gotten exceptionally angry at some people because they were so broke and asked me for help. There I was, spending countless hours with them, doing what you said and educating them, and they go out and blow a HUGE chunk of their feeble savings on the stupidest shit. I got angry because I knew these people and got emotionally invested in helping them (I don't regret getting emotionally invested).

I don't help people anymore. It's an exercise in frustration and futility. People simply do notwant to be financially responsible...well, maybe in the 20/80 law, 20% are financially responsible. The other 80%...don't waste time on them.

Kind of a rant, but it still burns deep in my soul, because the people I tried to help are good people.

You can lead a horse to water, but you can't make it drink. Pearls before swine.

[jjav]

> All it requires is addition and subtraction, mostly, which we learn in second grade or whenever it is.

To be fair that's not quite true. For example credit cards go out of the way to make their interest and penalties algorithm obscure in order to try to lock people into paying interest forever.

[FrontierPsych]

I understand what you're saying. However, I pretty much learned all there was to learn about them in 15 minutes when I got my first one. I read about them. I'm not the smartest person in the world, by far. If I can easily learn now, then anyone can learn this stuff on their own, in 15 minutes. It is NOT complicated.

Getting information is exceptionally easy, and a LOT easier than when I got my first one. I knew from when I got my first credit card that I had to pay off the balance in full, every month. That using a credit card should be the exact same as using cash. You never buy anything unless you actually have the cash first. Then you can use the credit card and pay it off at the end of the month. It's so easy to understand. It doesn't matter about credit cards companies and their obfuscation. I didn't learn it from credit card companies. I just learned it because it was easy to learn. How difficult is it? Don't use a credit care unless you have the cash first. You pay it off in full and you don't pay interest, whatever level it is - .01% or 40% - it does not matter what the interest rates are, unless you don't pay on time.

And the problem is that people don't care. They think emotionally, and don't give a crap about future ramifications.

This is my favorite video that explains it all: https://www.youtube.com/watch?v=R3ZJKN_5M44

[jjav]

> It's so easy to understand.

But difficult to find. Do you know how to get out of paying interest on credit cards if you happen to be late for a payment once? Unless you've researched it, probably not. And it's unintuitive to have to research it because you'd think the answer is obvious (just pay it off) but it's not. Credit card companies count on people not noticing and then keep paying interest forever.

I know plenty smart people who just pay their credit card bill on autopay and don't examine every line item of the monthly statement. That seems crazy to me but it happens.

[RyanHamilton]

I would suggest it's not the ease of access to data nor the ability to understand it. It's the constant bombardment of advertising.

42% of Americanas are overweight, do you think it's because we don't have the data or it's not available? No, it's that within this capitilistic society its more profitable for companies to sell sugar with a high markup and copyright protection, than a piece of fruit. If a banana was the most profitable food item to sell, there would be less obesity. At what % obesity or taking out loans or addiction do we shift from blaming individuals to blaming the scenario and the players creating that scenario often for profit?

[gloryjulio]

If u treat ur credit card just like debit card u will never need to be end up in the situation in the first place. Don't spend what u didn't earn. And I use autopsy when I got my first credit card when I was still in school by just asking the bank for this service from instinct. I got plenty of discount and never needed paid interest once.

If u didn't earn it, it's not ur money. Don't spend what's not urs. I don't think that's hard to understand

[boppo1]

What about just paying the balance every month? 'Don't spend money that isn't in your pocket' seems pretty simple.

[P5fRxh5kUvp2th]

Then just use cash.

[FrontierPsych]

That is perfectly acceptable and the way to go.

There are reasons to use a credit card - you get purchase protection, for one. You also can build up credit if you want to buy a house. You need one to rent a car.

But really, while there might be other reasons, the only reason to get a good credit rating is to be able to buy a house. Everything else can be paid for in cash (check, online payment from your checking account, etc)

When you use a credit card, you should treat it exactly like cash. You should have cash in the bank before you purchase anything with a credit card, and then pay the entire credit card balance each and every month.

If someone has a problem with this and just can't do it, then they should not get a credit card at all. Credit cards are very dangerous technology if one can't control it. Just like fire - if you are not careful with it, you can set your house on fire.

[candiodari]

It's only that simple before you actually own any resources. Even just having a tenant will make things more complicated than that.

[djbebs]

You don't need to use credit cards.

[glandium]

I don't know how it is in the US, but in Japan, it's bonkers to the point that you can regularly hear/see ads on radio/TV for multiple lawyer offices that will help you recover money credit card companies have extorted you over the years.

[wizofaus]

"This is because most people - maybe 95% - are ruled by their emotions rather than rationality. Or to put it more precisely, people make decisions based on emotions and then use their rational mind after they make their decision to rationalize their purchase"

I thought there was pretty solid evidence it was 100% of us who acted like this. Just that for some our "emotional" decisions (or at least, our subconscious decision making processes) are better informed.

FWIW, I'm pretty sure one's financial sense is more guided by upbringing than genetics - though supposedly there's a lack of strong evidence that, for instance, whether you give your kids pocket money and encourage them to manage their own finances makes all that much difference, which always surprised me (and I did it anyway - kid's now got his own job and seems to manage money pretty well so far).

[deterministic]

I couldn’t agree more. And you are right that it has nothing to do with peoples intelligence or education.

I also have given up helping people. It is a waste of time. Most people simply don’t think further ahead than today or tomorrow. And then they turn around and blame their financial difficulties on the system, politicians, greedy rich people, immigrants, white people etc. Anybody but themselves. consistently refusing to take responsibility for their own actions.

[FrontierPsych]

>And then they turn around and blame their financial difficulties on the system, politicians, greedy rich people, immigrants, white people etc. Anybody but themselves. consistently refusing to take responsibility for their own actions.

I didn't write this, but could have. 100% agree with what you are saying. The whole thing about "my school didn't teach it, that's why" just makes me so mad. It's just simply not that difficult.

[EVa5I7bHFq9mnYK]

You don't know all their circumstances. Maybe they have a rich dad who will die soon and cover all their debts.

[FrontierPsych]

I'm not covering all the exceptions, because exceptions = exceptions.

But even for wealthy people, stupid financial decisions will sink their ship. Mike Tyson won $300 million (a third of a billion dollars) and blew it all. Johnny Depp made $500 million (half a billion) and almost went broke with profligate spending and poor financial decisions.

There's a well-known saying - Poor to rich to poor in 3 generations. This means someone comes to America without a penny and they put their kid through school and that child makes hundreds of millions, but that child's child grows up with no respect for money and is fritters it away, and they end up poor.

This is why people who win the lottery or pro athletes go broke after 3 years of winning the lottery or out of the sport - they blow money.

Saying something like "Maybe they have a rich dad who will die soon and cover all their debts" shows a complete and total lack of respect for money. Anyone who thinks this way has a great chance of blowing all the money, unless they change their thinking. Why would making crappy financial decisions just because you have a rich dad make any sort of logic at all? It makes no sense. Why would one make poor financial decisions, just because they are going to come into some money? All it means is that this same person is going to continue to make poor decisions when their rich dad dies, run out of money and then complain about it when they are broke. Happens all the time.

[EVa5I7bHFq9mnYK]

Inheritance is not an exception. Quick Bing search shows that "68% of millennials expect an inheritance". So that might be the reason behind their behavior that you are not aware of.

[koliber]

Your comment blew my mind, and I just realized something. Thank you.

If 68% of the millennials expect an inheritance, how much do they expect to get? Are they making their financial decision based on getting mom and dad's house? Have they considered that this house might be used to pay for mom's and dad's care in their last years? Did they think about the fact that they might get the money only once they at 40 or 50 year's old? What if they end up with $2300 and a dinnerware set after a lifetime of poor financial decisions--I imagine most inheritances are not 7 figure affairs.

I'm worried if this is truly the case.

[FrontierPsych]

It's like...you read my first sentence and didn't read anything after that. Good job, well done.

[tomxor]

> the renters make horrible financial decisions that set them up to work until they die.

Did you read the article? Genuine question. Because you seem to be completely missing the main point it's making, it's not exactly lacking in examples.

[rich_sasha]

Not GP but these comments and the article are not unrelated.

TFA says amortized cost of things is lower when you have access to cash, or cheap credit. Buying in bulk in large shops is cheaper than buying small amounts at local shops. Proper renting is cheaper than weekly-billed accomodation.

But then GP is saying, the poor often have better access to credit than it might seem, it just goes to things that don't improve their financial situation. Nice cars and jewelry for instance.

I don't really know and suspect both are true to an extent, but chipping in since poverty is fascinating to me and I don't fully understand it (I come from and remain in a modest background btw). Sometimes it's just a lack of cash but often it seems not as simple as that.

[tomxor]

> Nice cars and jewelry for instance. I don't really know and suspect both are true to an extent

Yes, it probably is a bit of both, but the GP seems biased towards colouring everyone with the caricature of being in a financial position purely of their own making. It seems incredibly cliche like shouting "get a job you lazy bum" and ignoring any systemic factors and other forces at play as outlines in this article.

I personally have been in situations very close to the threshold of not being able to make rent in the past, and I'm very very far from a "consumer". When the window of time in which you have to make ends meet is on the order of days or weeks it's impossible to make long term optimal financial decisions, not merely because of stress, but because in the short term other people need your money, like this unempathetic landlord who apparently owns many properties.

[P5fRxh5kUvp2th]

If they're unrelated then maybe they should have posted in a different thread with a different article.

[johnthewise]

He is saying they are not unrelated

[onphonenow]

Other factors in fairness are kids and medical stuff. I spent 3k fixing up a wonderful 3.5k used car - have had it for years - runs great even though 16 years old. I do want / need to buy a new car but prices seem crazy to me! Kia soul maybe as a cheap car? Everything else has puffed up to high 20s and 30s (and far far higher) - this old car costs nothing to insure - and Kia seems to have waiting lists around the block for warranty work. My old car I can have anyone work in it without warranty issues.

It made me wonder if all the required features and electronics are puffing up costs a bit?

[caeril]

I grew up around a lot of poor people and I saw much of the same.

I wish this article broke down the "food" and "clothing" categories into the specific products they are purchasing.

A little anecdata:

These families would buy brand-name sneakers and jeans for their kids, whichever brand was popular that year, whereas I was on year two of home-sewn or no-brand cheap jeans. I'd go visit friends and see boxes of brand-name Lucky Charms, Apple Jacks, etc, and be envious versus the bulk oatmeal I choked down every morning. Their mothers were getting their "nails did" regularly whilst mine had perpetual dishwater hands.

My parents didn't make much money, but they knew how to spend it wisely. Other poor families, not so much.

Another anecdata:

My father-in-law grew up absolutely dirt poor (far far worse than my parents), but did reasonably well for himself over time. He still has significant debt and inability to manage his money because he has to buy luxury goods regularly as some sort of compensatory mechanism to ensure that other people would never see him to be poor.

At the end of the day, when I look at poor people's spending habits, I see the same thing you do: they are hooked on unnecessary spending. I suspect there is something in the human psyche that makes poor people try to compensate for it by spending to not appear poor, thus exacerbating the cycle.

It's a largely self-inflicted problem.

[derivagral]

Consider that some of those appearances aren't just for social circles but for job status. As someone in startup software (now remote!) my wardrobe choices are far broader than someone working in service who may be expected to wear and use the products they're selling.

[Eextra953]

Why do you have to look at their credit history before allowing someone to rent from you? Shouldn't their income be all you need? Whether you realize it or not, you are a part of the system that enables a life of debt. Owning a home allows people to build equity and sets a foundation for a stable life. By being a land lord, you are preventing people from buying and building equity. Instead their hard earned money goes right into your pocket.

[zdragnar]

Believe it or not, people exist who don't want to own a home and would rather rent. There are also plenty of times where it is a better idea to rent than buy a home- plenty of people who bought right before a housing market crash then needed to move for a job can attest to that. Generally, if you aren't sure that you're going to stay in a home for several years, you're not getting any equity back out if you need to sell... Especially if you had to do any big repairs or maintenance.

Landlords are a necessary part of a functioning society.

[riku_iki]

There are incentives were produced which put people who didn't buy into significant disadvantage:

- refinancing on low interest

- significant leveraged appreciation of housing pricing because of fiscal policies

[pasquinelli]

imagine you lived in a world where roads were all private and it was just how things are done that you pay fees to use them, fees set by the roadlords to keep them confortable. you'd say roadlords are a necessary part of a functioning society, but you'd be wrong, wouldn't you? you'd be confusing how things are with how they must stay.

[zdragnar]

It's an interesting point. There are private roads, and most that I've used have been on par with public roads of equivalent traffic patterns (mostly because people who put in private roads are the same ones hired by the government to put in public ones).

What's more interesting is if you take that extreme and flip it back to housing.

Imagine a world where:

You are banned from owning land or housing. There's a variety of options to live in, but limited by what the government decides is fitting. Then, a popular movement within government decides that a particular type of housing is not appropriate for society, and starts destroying all of those houses. Instead, they decree, the best and only type of housing that should be available are communes where everyone gets a bed but zero privacy. You're not allowed your own four walls, you have to share space with everyone.

It's so much more efficient! they decree.

Well, that's exactly what is starting to happen to roads in some major cities. Parking spaces are being removed in favor of expanding public transportation. Entire blocks are being declared off-limits to private cars to make them "walkable".

I'm not really advocating one way or the other here- my point is that it's kindof silly to compare roads and housing at such extremes, because the benefits and consequences of various polices are not directly analogous to each other.

[yanderekko]

>you'd say roadlords are a necessary part of a functioning society, but you'd be wrong, wouldn't you?

Not really, given that something is apparently different about this world such that the existence of roadlords represents a stable equilibrium.

[MisterMower]

> Shouldn’t their income be all you need?

Sometimes people can pay but choose not to. Ability to pay is necessary but not sufficient. Demonstrating a proven track record of financial responsibility makes a landlord much more willing to lease on favorable terms.

> By being a land lord, you are preventing people from buying and building equity.

Landlords increase the supply of housing by improving and renovating older structures or converting them into residential use.

A landlord has the exact same costs as a homeowner. He has a mortgage, property taxes, insurance, repairs, etc. Because he wants to operate at a profit he needs to keep those costs low, and a lot of landlords do that by purchasing distressed properties at lower prices, improving them, and leasing them profitably.

Alternatively a landlord can lease to tenants who have poor credit and can’t obtain a mortgage to buy a house. Those tenants would probably be homeless if it weren’t for landlords willing to risk leasing to them. No bank will lend $300k to those tenants so they can purchase the houses they would otherwise be renting. Those landlords are charging higher rents commensurate with the higher nonpayment risk inherent in tenants with low credit scores.

Generally the only thing preventing tenants with poor credit from building home equity is their poor financial decisions.

[UncleMeat]

A landlord performing repairs is a good joke.

[P5fRxh5kUvp2th]

> Demonstrating a proven track record of financial responsibility

credit is a record of your debt load, nothing else, but landlords use it as a proxy.

I have no credit and had to laugh when I realized no one would rent to me despite my 6-figure income. I had to start vetting THEM to see if it was a waste of time or not.

These kinds of things sound good in your head, but they're just not reality.

[walkhour]

Credit allows to get a probability of how likely it is payments get done. Landlords use it to get a probability of how likely payments will be.

In your case, they don't have your credit, so they obtain the probability through other variables, like your income. Most likely they'll assign a high probability to you paying, but the confidence interval mat be too big for their liking.

Obviously credit history doesn't give zero information, which is implied in this thread several times.

[P5fRxh5kUvp2th]

I've never been late on rent since I started renting and I have no credit. Not even a little, I literally have no credit and I'm in my 40's.

[walkhour]

Sure, but we're talking statistics here and you're just a data point.

[zamfi]

> By being a land lord, you are preventing people from buying and building equity. Instead their hard earned money goes right into your pocket.

What? This is like arguing that someone who owns a car and is a taxi driver is “preventing people from buying” and “instead their hard earned money goes right into your pocket”.

One person being a landlord does nothing to prevent others from owning property. Housing is no more a scarce resource than cars are. Or, at least, that would be true if the US weren’t covered in laws preventing new housing. There’s your actual bogeyman.

[jakelazaroff]

> One person being a landlord does nothing to prevent others from owning property.

In the sense that land ownership is zero sum, yes it does.

> Housing is no more a scarce resource than cars are.

That’s simply not true. In any given market, there’s a limited supply of housing, and it’s much more inelastic than the supply of cars.

> Or, at least, that would be true if the US weren’t covered in laws preventing new housing. There’s your actual bogeyman.

Who do you think is lobbying for these laws? I’ll give you a hint: it’s the people whose property gains value if there’s less to go around.

[zamfi]

Oh if only you were right — plenty of renters also vote to maintain zoning, fearing that their neighborhoods will otherwise change for the worse, and rent control guarantees they can’t afford to move.

Sure, land is limited. But housing is not 1:1 with land! Housing supply is inelastic, but population growth is also slow, and it’s absolutely not a lack of construction capacity that prevents new housing. It’s inelastic because our laws make it so.

The folks lobbying for these laws are interest groups like any other. The problem is they’ve also suckered too many others in to the belief system that neighborhoods must never change or grow.

[djbebs]

Land ownership is not the constraint to housing that you think it is.

I can buy thousands of square meters of land that is physically able to support housing for a negligible amount of money.

The land is useless to me because construction is expensive (as a result of regulatory requirements) and I'm not legally allowed to build there (also due to regulatory requirements).

[joeamroo]

> In the sense that land ownership is zero sum, yes it does. Blame that on zoning laws + People moving into big cities. Just supply and demand, At least in Urban areas with that problem .

> That’s simply not true. In any given market, there’s a limited supply of housing, and it’s much more inelastic than the supply of cars

Is that the fault of humans wanting to live in close proximity with other humans? maybe, there is an ample amount of land anywhere between cities with an inelastic supply of housing.

> Who do you think is lobbying for these laws? I’ll give you a hint: it’s the people whose property gains value if there’s less to go around.

Moloch is a problem.

[pas]

it's not zero sum. people are dumb unfortunately and that makes building new housing hard nowadays.

but it's not a human universal. incentives matter, look at China, for example.

in the US renters outnumber landlords in many cities, yet they too mostly voted for stagnation.

[josephcsible]

> Why do you have to look at their credit history before allowing someone to rent from you? Shouldn't their income be all you need?

Am I missing something obvious? Isn't it just because not everyone who misses payments is low-income?

[kube-system]

The rest of the comment makes it pretty clear why income is not the whole story. Overextending finances can happen in any income bracket.

Renting is a service that is available to everyone, not just those who can’t afford houses. Most people who buy houses previously rented. Gotta live somewhere when you save up.

[P5fRxh5kUvp2th]

> Renting is a service that is available to everyone

Go try to rent a decent place with no credit history and then tell me you still have that opinion.

[kube-system]

The rest of my sentence is important to the meaning of my statement. I am saying that people who are responsible with their finances can and do also rent.

[P5fRxh5kUvp2th]

and I'm saying it's not true that it's available to everyone, certainly not in practice.

[kube-system]

I am aware. You are accusing me of using "everyone" in a different context than I used it above. Obviously I am aware, for instance, that homeless people exist.

https://news.ycombinator.com/newsguidelines.html

> Please respond to the strongest plausible interpretation of what someone says, not a weaker one that's easier to criticize.

[za3faran]

In some other countries they don't check or care about credit history, only that the salary is able to cover the rent.

[KingMachiavelli]

For better or worse, real estate is one of the earliest investment opportunities available for the most Americans. The ROI is easy to understand and capital is much easier to access compared to VC, bespoke business loans, etc. The industry is large and competitive, not investing or participating in the market isn't going to actually change housing affordability. Almost everyone except the poor/working class is invested in real estate directly or indirectly.

Most importantly, only residents vote in local elections and it's local policy that has the largest impact on housing supply and renter protections. Market's are quick to react to policy changes but policy has to actually change - advocating for individual actors to behave against the market is, on average, not going to actually help the people you aim to help... instead other actors (and perhaps actors biased to even more amoral decision making) will take advantage.

[pas]

hailing housing as an investment leads to the hazard of too big to fail, when too many people have it as their only asset.

there are regional trends that can make it a great investment, and the secular trend of urbanization (and the growing US population, and growing economy) also help, but almost all of the growth in prices is due to very harmful shortsighted policy, and the circumstance of the move to near zero interest rate.

[KingMachiavelli]

I completely agree. It's just we are already at the point of it being too big to fail - you can just look at the housing market during COVID compared to 2008 to see that we've doubled down on housing as a speculative asset.

[rich_sasha]

The landlord is effectively a lender, or at least a rusk-taking intermediary. They buy the house with outright cash or a mortgage backed by good credit. Their risk is that they don't find tenants, can't receive rent, or the house price goes down.

It's effectively shielding the tenant from the financial risks of house ownership, for a price.

I also agree it's unfair to the poor that renting is more expensive long-term when they can't afford to buy, but I don't think it's the landlords fault.

[EricDeb]

What would also shield a poorer person from the risks of house ownership is if houses werent so expensive in the first place.

[mym1990]

Your judgement seems misguided towards someone that may have been incentivized to take risk on an investment property, or someone that bought a home and had to move due to any number of circumstances, but was not able to sell.

I agree that homeownership is becoming less and less viable for the middle class and below due to a lot of speculation that has entered the market in the past few years, and this should be nipped in the bud with regulation. But without knowing much about OP, it feels like an over reach to make assumptions that they are the problem.

On the credit history, I don't know if you have rented out a place before(sounds like maybe not), if you get a bad apple as a renter...everything gets massively more complicated and remedying the situation is not a clean maneuver. You wouldn't buy a vehicle off one picture, so why would someone rent out something that is 10-20x more valuable without proper due diligence?

[skt5]

Income is evidence of a person's ability to pay. Credit history is evidence of a person's willingness to pay. I would expect a positive correlation between the two but relying on that correlation seems risky.

[koliber]

Your comment is confusing.

Are you concerned that the parent is using a credit history to make a decision who to rent to?

Or are you concerned that by being a landlord the parent is somehow preventing people from buying a house?

I can see each being a concern. However, phrased as it is, it sounds like an incoherent emotional rant that is hard to respond to.

[kamaal]

>>By being a land lord, you are preventing people from buying and building equity.

Yeah me going to the gym, reading, and eating healthy is the reason why so many others are obese and unread.

>>Instead their hard earned money goes right into your pocket.

What is the connection between X being a landlord and Y not being allowed to be a landlord?

[twojacobtwo]

>Yeah me going to the gym, reading, and eating healthy is the reason why so many others are obese and unread.

Not OP, but do you actually think those situations are analogous? This feels like either a strawman or arguing in bad faith.

>What is the connection between X being a landlord and Y not being allowed to be a landlord?

The more houses being purchased for rental, the fewer that are available for individual ownership and landlords typically own more than one home. Additionally and probabaly more importantly, by using housing as an investment vehicle, it pits people with excess money to invest against people who may only have enough money for basic essentials in bidding for a house. This is all exacerbated further when you take note of the fact that companies/invesment funds are also buying up homes and becoming 'landlords'.

[kamaal]

>>Not OP, but do you actually think those situations are analogous? This feels like either a strawman or arguing in bad faith.

Yes, in fact it is as true as it gets. The thing is lots of things reduce to individual agency and responsibility and regardless one agrees with it or not, you are always in total ownership of any situation. Sure you can't buy a million dollar mansion inside a horse ranch. But there's always something you can buy.

There's always a minimal level of bootstrap anybody can start with. But you have to be very serious, very failure immune and be ok with taking multiple shots at the problem.

>>The more houses being purchased for rental, the fewer that are available for individual ownership and landlords typically own more than one home.

Have never ever seen homes go like hot cakes. You have time, you have lots of time. The question here really is do you want to buy a home? If yes, there is always something you can do about it. You might not get a million dollar home, but theres always something you can buy.

[twojacobtwo]

>Have never ever seen homes go like hot cakes.

Take a look at toronto or vancouver, to name a couple places in my country where no one has had to sell at or below sane asking prices for years.

>You have time, you have lots of time. The question here really is do you want to buy a home? If yes, there is always something you can do about it. You might not get a million dollar home, but theres always something you can buy.

You were originally saying that landlords buying up houses doesn't affect other people being able to buy a house. Sure, if we move the goalposts far enough and say 'it doesn't stop you from erecting 4 walls and a roof somewhere in the world', you're right. However, if you want a house anywhere near where it's likely to be of practical use, there is no question that landlords/investors scooping up houses absolutely affects those who need a house NOW and who are without the capital to compete against millionaires with multiple properties.

Also, if you say I/we 'have lots of time', that's implying that there's no marginal cost to having to rent for all that time. If that were the case all the time, why would anyone bother buying a house?

[kamaal]

Whatever rocks your boat buddy.

Since you already believe you can't buy a home, it might end up becoming a self full-filling prophecy.

[pas]

If you look at housing as equity why do you have problems with renting it out?

[paulpauper]

it's hard to evict people. missed payments means loss of $

[pasquinelli]

you make your living off them, so you have a psychlogical incentive to see them in a certain way.

[breadbreadbread]

> the renters make horrible financial decisions that set them up to work until they die

The point of this article is that those "horrible financial decisions" aren't mistakes, they are costs of living that are imposed upon those that are already struggling. Sometimes it may be irresponsibility, other times it is an inevitability, a distinction that you truly cant discern from the outside. It's possible that splurging on a car might be a long term benefit, maybe fuel efficiency or maintainence costs are money savers after the initial buy in. You don't know the personal calculus of each decision so maybe don't assign motive to what renters are doing under the heel of capitalism.

And it turns out, these people need a roof over their heads, which you could provide at a cheaper cost if you chose to but instead you take a chunk of their paycheck each month as your personal profit. Like you could help people. You could treat housing as a necessary resource and not a commodity. Overnight you can alleviate people's debt if you wanted to.

[smn1234]

very fair, but from my handful of observations I've seen people chase brand name over the quality benefits a brand carries (e.g. maintenance, efficiency) to consider

[P5fRxh5kUvp2th]

You're not renting to poor people ... and you're rationalizing.

poor people don't have 3x income to rent ratio, middle class people do. poor people don't drive $30k+ vehicles, middle class people do.

The only thing you got right is that poor people make bad financial decisions. Often times they're forced into it, although not nearly always. Poor people trade time for money.

People are often predatory towards the poor because there's a combination of money being there but not having enough to protect yourself from the bullshit.

Personally, the one group of people I have absolutely no sympathy for are landlords, and I say this as someone with a 6-figure income who rents. I grew up dirt poor, to the point of being homeless.

And the number of times I've had a landlord try to pull some shit only to be shocked when my lawyer got in touch is entirely too damned high. Only for the problem to magically go away.

And why? Because you would never imagine my resources by looking at me and how I live. landlords do this shit as a matter of course and only back off when they realize not only CAN you defend yourself, but you WILL defend yourself.

Think about it like this.

There are laws on the books that very explicitly state if a landlord makes a persons property inaccessible before they're legally required to move, that person can sue them for the value of everything lost.

1. How do you think I know that (they gave away 2 of my pets, reptiles)?

2. Why did that law need to be passed?

---

I'm sure there are landlords that act in good faith as decent human beings, but it seems as if there's something unique about landlords that makes it difficult. In all the time I've been renting I've met a single decent property manager, and no decent land lords.

[joenot443]

> the one group of people I have absolutely no sympathy for are landlords

Going through life categorizing people into buckets and then proudly proclaiming you have zero sympathy for ANYONE in that bucket isn't a mature or healthy way to view the world. It seems like you have some really intense bones to pick (your reptile story) and are extending that anecdotal experience onto a group of tens of millions, a mental leap which is usually frowned upon in circles like this. Just my thoughts.

[P5fRxh5kUvp2th]

Hey man, I get it. I'm a worse, less moral, human being than you are. It's just my lot in life, and as such, I deserve to be judged for it.

But I must ask, could you judge in silence? I suspect I'm not the only one who finds the noise distracting.

[kodah]

> But I must ask, could you judge in silence?

No free human will ever do this.

Landlords can be a mixed bag, tenants can be too. My mother's had a tenant nearly totally destroy one of her homes by bringing in five juvenile pitbulls when there was supposed to be one. She then refused to leave the property and didn't notify my mother when the aerobic septic system wasn't working because that'd require my mother to go in the bathroom where a 3x3 hole was made in the floor.

On the other hand, as a renter I've been subjected to some arcane laws. I was threatened with having to pay the remainder of the rent on a contract when I bought a house. I've had them nickel and dime me for average wear and tear. I had one that liked to stop by nearly monthly.

This tells me a few things, some probably based on my own biases:

- The laws that maximize one person's rights can cut into another person's. Sharing property complicates this further.

- Poor folks (who my mom rents to) do make poor decisions, but a lot of it is experiencing the cycle of being poor or trying to cope with it. That doesn't give them a right to destroy other people's stuff, but it tells me that we should be focusing on the poor cycle as a class issue.

[P5fRxh5kUvp2th]

The issue is that I'm a great tenant and still have to deal with the crap. I've been renting for well over 20 years at this point and I've never been late, not even once.

That crappy tenants exist is not an excuse for so much consistency in how badly landlords treat their tenants.

The single property manager that treated me well? I stayed in that house for 6 years. Do you know why I moved? The landlord switched property managers. Literally month X everything was fine, month X + 1 I was fighting with them. And what about? They wanted to charge me a processing fee for my rent and wouldn't accept a check. They were based out of state, didn't have a local office, didn't accept check, and were pushing the processing fees onto their tenants. yeah, fuck that.

And what I said above about never being late? Not totally true. That property manager had the same bank I did so I would transfer money directly to her account, send her an email and she would respond with a confirmation that she saw it. At some point she switched banks. I waited until the last day to pick up a cashiers check to run by her office, only, unbeknownst to me, my bank had shortened their hours due to covid so I couldn't. When I realized this I called her, explained the situation, told her I'd be at her office first thing monday morning (it was a friday) and nothing was ever said about a late fee.

landlords tend to be assholes for no good reason and they generally get away with it because of the power differential that exists (or is perceived to exist) between them and their tenants. There are many more laws on the books protecting tenants than landlords and the reason for that is BECAUSE they tend to be assholes. There are laws on the books stating landlords are not allowed to let themselves into others homes whenever they want because if that law didn't exist many of them would.

[kodah]

Sure, just saying I've seen both ends of this. It seems to me the problem is the framework that's at work. It incentivizes landlords and tenants to think of the situation extractively rather than as a member of the social fabric.

[milkytron]

I think it's good to be called out for this to allow for introspection and also it helps the community here realize that vast generalizations may not always be accurate.

[P5fRxh5kUvp2th]

Here, let me quote myself

> I'm sure there are landlords that act in good faith as decent human beings, but it seems as if there's something unique about landlords that makes it difficult. In all the time I've been renting I've met a single decent property manager, and no decent land lords.

In reality it's just a random jackass on the internet that wanted to preen in front of others.

Introspection ... lmao. "I should figure out why I keep having to pull out my lawyer to keep landlords from abusing me".

In reality, it's because I rent cheap and they're used to having a power differential that doesn't exist with me.

[joenot443]

If you were talking about a group I have no relation to, I'd get it. But I'm a landlord; two of my best friends and I are living in a home I purchased last year. Things are great. I didn't mean for my comment to be distracting noise, just an honest observation about how you're coming across.

[P5fRxh5kUvp2th]

You're technically a landlord, yes, but there's an ocean of difference between living with your two best buds who pay you rent and renting an entire house to a complete stranger.

[lordfrito]

> Personally, the one group of people I have absolutely no sympathy for are landlords

As a counterpoint, I was a landlord of a cheapish condo (rented for 17 years), and also a decent house in a solid middle class neighborhood (rented for 5 years). Wasn't looking to be a landlord, fell into it (really long story involving divorce right before housing bubble burst). Needed to do something to tread water until the housing market returned, renting was the only sane option (or bankruptcy, which I abhor). Had 4 tenants over the 17 year span.

Anyhow, having no experience as a landlord I tried my best to treat my tenants as "real human beings" and not be the evil landlord character you see on television. Repairs on time, quality work (by me), below market rent, didn't raise rent often (had an elderly lady on HUD in one, only raised her rent once in 10 years). I really tried to make it work, treat them well and they'll treat me well I figured.

I learned several valuable lessons about tenants. By and large they can and will take advantage of any good will you give them, as they assume that you're screwing them somehow. They also will not take care of your property regardless of how well you treat them. Their attitude towards me can be summarized as "take what you can get while the getting is good". I did not have a single tenant that didn't burn down the relationship with me on their way out. I usually found out the tenant was planning to leave once they stopped paying rent. Twice they squatted, had to get a lawyer in both cases, took forever to get them out. Just a mess.

The experience was (and still is) quite shocking to me. Being the type of person that pays my bills on time, I figured that everyone else did as well. I learned the hard way that you have to protect yourself or you will end up getting screwed. End of the day it's financially stressful making my monthly mortgage payment (and lawyer) on a place that someone else lives in but isn't paying me rent.

It seemed to me that what all of my renters had in common was that they rented because they weren't responsible enough to own. Being poor is a trap for sure, but at the end of the day I don't feel bad for the people I dealt with. Maybe I should, but it's hard to look past having to pay a lawyer to reclaim control of my property.

Got out of being a landlord as soon as the market made it possible. I could feel the stress roll off me when I sold those places.

The entire experience really soured me. I don't give people the benefit of the doubt like I used to, and am a lot more jaded with random strangers. Talking about it now is bringing back bad memories.

That said, it sucks being poor for sure. It's hard to rise above it. And yes I'm sure most career landlords suck. You have to be a lot more callous than I was to make it work at scale. Personally I know I went above and beyond and was just treated poorly for it. I suppose I let that happen, but I'm never going to make that mistake again.

It's not so much that the poor can't catch a break, but that they don't recognize the break when they get it, and don't know how to follow through and/or capitalize on opportunity, and have no problem biting the hand that's helping them. It's a very moment-by-moment type of existence, I suppose it's survival instincts kicking in that explains some of the behavior. Lying is better than being homeless, etc.

Just one man's experience and my 2 cents. I wasn't a career landlord. Draw whatever conclusions you will.

[P5fRxh5kUvp2th]

Even the attitude.

You're giving them a helping hand by asking them to pay you every month and fixing things that a part of the contract.

---

And to be clear, I'm not bitching that a landlord will evict someone for not paying rent. Those issues have absolutely nothing to do with it.

[lordfrito]

I'm bitching because I met my end of the contract, and they didn't.

I'm bitching because I gave them goodwill, and they burned it.

I'm bitching because I trusted them as human beings, and got taken advantage of.

I'll give you just one example of what I dealt with. The son of the elderly lady was trying to start a handyman business, and she asked if I would pay him to do the repairs. Help him get started etc. Long story short, I paid him (in advance, I'm the idiot) and he never did the work. I found out about this when I went over to the place and saw the work wasn't done, but the materials I paid for were gone. She stopped asking for ridiculous things for a while after that one.

I'm not saying I'm a saint. But I really tried to not be "that guy". It was impossible.

I'm getting angry just revisiting this stuff. sigh.

Edit: Regarding fixing things was my end of the contract, there was nothing too small I wouldn't fix. When it got to the point she was asking me to change lightbulbs for her, and clean the shower she let get full of mildew, I had enough.

[P5fRxh5kUvp2th]

I understand what you're saying, what I'm saying is that most landlords treat people like ass regardless of how that person has treated them.

[lordfrito]

I totally understand. Been on the receiving end of shitty landlords myself when I was a young man with little to my name. I'm sorry for your bad experiences, the power imbalance you described is real. Apologies for appearing callous and not making that point clearer.

I only posted my experience to counter your generalization about landlords. There are good and bad actors on both sides, and landlords can get taken advantage of too.

It seems that a small minority of folks ruin it for the larger group, who then get conditioned to treat the other side in kind as a pre-emptive defense mechanism (When in Rome...). I wasn't like most renters, but got treated the same as the rest. I'm sure my landlords had horror stories, and were jaded, so I was just another young punk to them, which isn't fair at all to me. At some point you give up. I got out of being a landlord before I got too jaded.

My experience as a landlord probably had less to do with me and more to do with their previous landlords.. To them I was just another landlord, so they're thinking why would I treat them any different? So why would they treat me any different?

The power imbalance goes both ways, and seems to me to have something to do with "having nothing to lose". I had a lot to lose if I didn't pay my mortgage to the bank, but my renters had nothing to lose by not paying me. They had all the leverage. I learned to be careful when dealing with people who have little/nothing to lose. As much as I tried to make renting a mutually beneficial relationship, it just exposed me and my finances to people with no real skin in the game.