Chat

7497 readers

48 users here now

Relaxed section for discussion and debate that doesn't fit anywhere else. Whether it's advice, how your week is going, a link that's at the back of your mind, or something like that, it can likely go here.

Subcommunities on Beehaw:

AskBeehaw

This community's icon was made by Aaron Schneider, under the CC-BY-NC-SA 4.0 license.

founded 2 years ago

MODERATORS

alyaza@beehaw.org

remington@beehaw.org

I feel like there should be a difference between "rent" and "mortgage rent" (programming.dev)

submitted 8 months ago by danhab99@programming.dev to c/chat@beehaw.org

28 comments fedilink hide all child comments

Since the housing market looks like a crowd of people just signing mortgages as fast as possible just to then turn around and charge that mortgage plus a little bit.

I shouldn't pay someone's mortgage like seriously this is just adding an unnecessary problem to the real problem of "living somewhere"

you are viewing a single comment's thread
view the rest of the comments

[–] jarfil@beehaw.org 4 points 8 months ago

Right, wasn't sure if you meant that or something else.

In real estate, people often forget that houses are not forever. They require maintenance, sometimes full refurbishment to bring them up to code, then eventually they become condemned, with extra cost to clear the land, and even the land itself may need utilities renewed. They're long lasting, but ultimately perishable goods (in most cases).

Even in captive audience situations, the calculation is not as simple as comparing mortgage to rent, since rent is the final expense, but mortgage is only a part of it. Depending on how long the housing lasts, how expensive is the upkeep, and what is its final resale value, rent as high or even higher than mortgage, can be the cheaper option.

In some cities with controlled rent, and historical building protection laws, owners have been known to purposefully leave a building unoccupied and in disrepair, just so it would get condemned and they could build a new one in its place. Some cities have struck a deal where owners can tear down the inside of a building, as long as they preserve the facades.

There is definitely a bunch of people speculating, and housing seems to follow a periodic bubble cycle, but then they burst, leaving most of the small and naive investors as bag holders.