[zxxh]

I’m actually a landlord and my management company literally just has a list of all the rents being paid in my condo complex. Once I saw that I basically gave on my job as a SWE. We are just working for our landlords, you can’t win.

[LeafItAlone]

I’m not sure what you are trying to say here?

[whoknowsidont]

He's saying that land lords were dramatically increasing prices because they could, in spite of supply and demand.

Another reason why landlords need extreme oversight.

[chii]

> increasing prices because they could, in spite of supply and demand.

you mean _because of_ supply and demand, rather than in spite of?

So to fix the problem isn't to regulate landlords (aka, attempting to legislate price controls), but to produce more supply.

[reactordev]

In some markets, there’s plenty of supply - for rent - that no one can afford. Half my building is empty. Yet they charge “luxury” prices for a very much “unluxury” place. I’m one of a small handful of owners that bought before the “management company” came in. They had no choice but to accept us into their system. I’ve seen rent go from $700/1bdr to $2100/1bdr in 4 years.

[richbell]

> So to fix the problem isn't to regulate landlords (aka, attempting to legislate price controls), but to produce more supply.

It's both. Producing more supply works best when it isn't being sabotaged by landlords intentionally keeping units vacant.

[chii]

> intentionally keeping units vacant.

they should be free to do so. They have a holding cost, which they're going to have to pay.

I mean, why don't wheat farmers intentionally hold sales of wheat to force the price higher?

[richbell]

So you don't think that landlords should be regulated because the solution is more supply, but also think that landlords should be allowed to intentionally restrict supply?

[mym1990]

Just off the top of my head: 1) there could be legal issues with it 2) the logistics of organizing such an operation at a scale that would impact price enough to offset the risk would be…extraordinary 3) wheat isn’t an inelastic good, people will find substitutes. There is a reason that when things become commodities, there is downward pressure on price…the thing that becomes a commodity just isn’t that novel anymore. The wheat farmers would essentially need to corner the market.

[callmeal]

>you mean _because of_ supply and demand, rather than in spite of?

GP means _in spite of_. It's the only way to explain the number of apartments kept vacant to artificially reduce supply.

See below for instance.

https://www.thecity.nyc/2024/02/14/rent-stabilized-apartment...

  The latest New York City Housing and Vacancy survey estimates that last year 26,310 rent-stabilized apartments were “vacant but unavailable for rent,” down from about 43,000 in the same survey two years ago.

[crooked-v]

26,000 out of 1,000,000 [1] is a vacancy rate of 2.6%, which is way below the expected vacancy rate of 6–8%.

[1]: https://www.nytimes.com/2023/04/20/nyregion/rent-stabilized-...

[rahimnathwani]

Why are you picking out 'rent-stabilized apartments'?

These are exactly the apartments where landlords have exactly zero ability to set price, let along to collude to fix prices.

[Findeton]

In my experience there are too many people that don't want to understand that.

[addicted]

I don’t understand it either. Wouldn’t the people who collect the rents in the building have a list of all the rents in the building?

[rco8786]

You saw that people were paying rent, so you gave up on your SWE job? I don’t get it.

[esalman]

I think OP meant how much people were paying in rent. "We're working for our landlords"- bulk of people's salary is spent on rent, so it's more profitable to become a landlord rather than grinding and paying rent.

[refurb]

Being a landlord isn’t that profitable.

In high COL cities like SF, rent doesn’t even cover the carrying costs of a mortgage.

And if they paid the place off, say a $1.2M home, they might $5,000/month in rent. That’s a screaming 4.2% return on their money (ignoring property taxes, insurance, maintenance). Including those it 2-3%.

[BirdieNZ]

If you think of it in share market terms, it's a 4.2% dividend from a stock with a long-term price growth rate of ~7%. Not only that but you can use leverage (e.g. like a margin trader) in the form of a mortgage. In the USA, you can even lock your interest rate for 30 years, and only re-fix the rate when it drops!

It's very profitable!

[jjav]

> It's very profitable!

Have you tried being a landlord, if it is very profitable? If not why not?

The best way to be profitable as a landlord is to inherit a paid-off property and rent that out.

But if you aren't that lucky and have to actually pay for the property you rent out, it is very difficult to make a profit, let alone one that beats just putting the money into an index fund.

[BirdieNZ]

I lean towards renting out housing at market rent in my city to be unethical, so I refuse on ethical grounds to become a landlord. In the long term if the opportunity (e.g. money) arises I would like to build housing charging at-cost rent, but that'd be a charitable activity rather than a profit-seeking one.

I live in New Zealand, which is quite addicted as a country to profiting from real estate. The ability to leverage your money into an asset that provides both enough cashflow to cover costs and interest servicing as well as appreciates in value ~7% annually means that for most people, becoming a landlord is the most reliable path to easy wealth.

Yes, you can become a margin trader, but the cashflow management is much harder, the margin interest rate is higher (here at least), and it is much more difficult compared to buying an existing house and renting it out.

[esalman]

I think that's where the "Nvidia money" comes into play. I live in a VHCOL area and according to redfin/Zillow data, almost every house recently sold near me were paid for with between 40-60% down payment. If that's the case, mortgage starts to become manageable if you rent the property out.

Edit: for context, it is the orange county area where average home price is $1.4m afaik.

[SoftTalker]

Rent (or mortgage) is typically the single highest expense for most people, always has been. If your are paying more than a third of your income in rent, you need to downsize or get a better job.

[38]

> downsize or get a better job

wow great idea, why didn't I think of that

[fouc]

IMO if you're paying more than 1/4th of your income in rent, you need to downsize or get a better job. The 1/3 rule is crazy high IMO.

[esalman]

Agreed, 1/3 rule definitely does not work in VHCOL areas. I pay 28% in rent, that cuts down the commute and allows us to live at a stone's throw from good schools, grocery stores and small airports.

[rco8786]

Obviously the lower the better, with 0 being the ideal for anyone. But most people cannot afford a reasonable home on 1/4 of their income.

[rco8786]

Still kind of doesn't make sense unless they knew the landlord's expenses though. I dunno, just seems a little "jump to conclusions"-y.

[neilv]

Do you know how they got that list?

(Do they just manage the property and collect condo fees, or do they also collect rents?)

[nothercastle]

If you monitor the public for rent posts you could mine that data over time. Most units turn over every couple years it wouldn’t take long to get a complete picture. You just wouldn’t know the incremental adjustment though you might be able to buy that from a broker

[neilv]

I'm asking because it might be evidence of pricing collusion.

[sfifs]

Depends on the market. For instance in my country, all rentals need to be register and the cost is public.

[neilv]

Which is why I want to know how they got that list.

[nothercastle]

I don’t think there is significant desire to prosecute so non issue

[alchemist1e9]

In markets it helps greatly to have prices published publicly. Perhaps private rental transactions in apartment buildings should be required to be posted publicly?