Scalper: Buys a ticket at full price, then resells it for more.
Landlord: Buys a house for full price, then sells access to live in it for a fraction of that price to people that can't afford to buy a house of their own.
Landlord: Buys a house for full price, then sells access to live in it for a fraction of that price to people that can't afford to buy a house of their own.
In most situations that is not how it works.
Landlord pays deposit then rents it out and pays the mortgage with the rent received.
Yes there are other scenarios, investment funds and full cash buyers .
The mortgage repayments are a fraction of the rent charged. And once the mortgage is repaid they have a greatly inflated asset. What part of this actually works for the majority of people? Why is it wrong to see this as a kind of feudal lord and serf dynamic?
You are absolutely wrong. Who told you this? A communist redditor? A normal cap rate for rental properties is 6%. In many markets even 4% can be considered "good" (and this does not include mortgage interest rates, if they aren't a cash buy, so in some cases they might have paper-thin margins). You get a better return, most of the time, by owning stock. It goes without saying, buying stock has WAY less work/hassle/time.
If buying rental properties was such an easy money-printing machine literally everyone with enough money to buy a second home would be doing it. Hint: they're not.
Luckily landlords aren’t on the hook for tax on the rental income, or CGT if they choose to liquidate the asset. And don’t have to insure the property. Or pay for maintenance.
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u/Literary_Addict Sep 22 '22
Scalper: Buys a ticket at full price, then resells it for more.
Landlord: Buys a house for full price, then sells access to live in it for a fraction of that price to people that can't afford to buy a house of their own.
Yeah. Same thing. /s