[anthonycerra]

Can't one argue that income from rental properties is more predictable than the income from full-time employment? In the former, there are binding contracts between the landlord and tenant that guarantee the landlord income (similar to the relationship between a homeowner and a bank, which seems hypocritical on the bank's part). In the case of full-time employment the employee is not guaranteed to have a job as an employer can fire someone at any time for any reason.

[ohazi]

There's also stuff that breaks unexpectedly that you're on the hook for repairing immediately, at whatever the cost. It can sometimes be difficult to fill vacancies, and in many instances those "binding contracts" aren't worth peanuts. If a tennant leaves or destroys the apartment, you could either go after them in court (expensive, time consuming, and you aren't likely to recoup very much very easily, and you certainly can't compel them to continue to pay you if they're broke), or live with keeping their security deposit (again, peanuts).

[pavel_lishin]

Leases almost always have a provision for breaking them, typically with 2 months payment as a penalty fee.

So you're guaranteed some income, but all of your tenants can leave at any point.

[jedrek]

As opposed to full time jobs, that can fire you at will and you might get two weeks termination pay?

[georgemcbay]

That's the real kicker for me, the idea that being currently employed under a W2 means anything for future earnings. That is a very outdated concept, IMO.

[sliverstorm]

It's not as strong of an indicator as it was in the past, but if you have years of track record with your employer you probably will keep getting that paycheck in the future- and if you get fired, you can probably find a new job.

Not a perfect signal, but it's not like there actually is a perfect signal to be had.

[x0x0]

1 - If a tenant loses a job and can't pay the rent, that contract isn't worth the paper its written on. You can't practically collect money someone doesn't have. Even if you collect a judgement, and sell it, you'll be lucky to get 20 cents on the dollar. Not even mentioning your time, court costs, and legal costs. Those may be recoverable, again, but practically speaking they're gone. The number of tenants who actually have the ability to pay and don't is, in my experience, very small. Few people wish to fuck with their housing situation.

2 - we just went through a rather unexpected bout of widespread unemployment

3 - the author appears to not have verifiable income streams (ex rent) with which to service the mortgage. If you are unaware, at least in markets I'm familiar with (and I have some familiarity with this), newly purchased rental properties rarely cover the mortgage + taxes + maintenance. You often expect them to be cash flow negative for some period. Which doesn't even begin to mention the risk of not finding tenants. Or the tenants not paying. And even in the latter situation, depending on where you are, it can take many months to forcibly remove them.

4 - basically, the author just switched from w2 to self-employed and therefore has no history with which to demonstrate his self employment is anything but a fantasy. If he had a year of demonstrable self-employment history, he probably would have been fine. His complaint, in general, seems overwrought.

5 - and again, in case anyone has forgotten, we just went through a bout of systemic risk due to banks selling mortgages people couldn't service combined with people overestimating their ability to pay. Therefore, even if he is stuck in the cracks, this is the price of insuring a lack of systemic risk to the system (for which the US taxpayer is on the hook), particularly when banks just demonstrated you can't trust them to properly underwrite mortgages.

6 - credit != ability to pay. You can get very good credit simply by taking small loans and paying them on time. In my experience, those two things aren't well related at all. Note you also may make $250k/year, forget to pay a small medical bill (which is easy to do), get sent to collections, and have a credit score in the 600s.

7 - in the history of tenants we've had to evict (thankfully very few, and not all for nonpayment of rent), several have had very good credit

[drcode]

> Can't one argue that income from rental properties is more predictable than the income from full-time employment?

Sure, in an open market for lenders some may agree it's in their interest to risk their capital, or they may not, if the numbers don't add up.

[j2d3]

And op's point is that we do not have an open market due to ill conceived regulations like dodd frank.

[sliverstorm]

Income from rental properties is only as predictable as your tenants.