[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.

[SgtBastard]

I don’t think you made the comment you thought you made. If you’re caveating “everyone” to mean something other than every single person, you should state those caveats.

[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 $