As if more evidence were needed that we are seeing an entire generation that doesn’t understand money, we have young people claiming that them having the housing that they want at the price that they feel like paying. Yep, housing is a human right, but landlords making a profit is a luxury. Those are the exact terms used in this story.
Granted, the above story is from Australia, but the sentiments are identical to those here in the US, as evidenced by posts seen on social media where the latest generation vents that landlords should lose money because they are rich. They claim “they don’t own the properties at all most of the time, they just keep taking out equity from the last place and end up with 7 mortgages that need consistent renters.” Yes, that is how investing works. It’s called leveraging. You borrow money, invest that money, and turn a profit. The rate of return has to be higher than the cost of borrowing the money, or the investment isn’t worth making.
Proving that many legislators don’t understand economics either, the state of Connecticut is considering a law that would prohibit rent increases that are larger than the CPI plus 3%. The law would also make it illegal to evict a tenant when the lease expires. Since we all know that the CPI is complete and utter horse manure, it is easy to see where this will go. As expenses increase, they cut into profits. The landlord can’t ask the tenant to leave when the lease expires, meaning that a lease becomes a lifetime contract of involuntary servitude between the tenant and the landlord. All because housing is a “human right.”
This is nothing more than slavery disguised as human rights. They are demanding that property owners provide losers with a subsidized place to live. Communism in a nutshell.
The part that make me laugh as I realize the magical thinking here is the sentiment that “Get those houses back into the market, 70% of renters want to buy!” as if there are no houses out there for sale because landlords own them all. If renters wanted to buy, all they need is good credit, a steady job, and a grasp on managing money. They don’t have those things.
Many young people don’t grasp the way things are. They want to live in luxury without paying for it, without sacrifice, without work. They have decided that all they must do to have everything that they want is protest and vote for it. Working for what they want, being responsible with their money and saving for a down payment are all foreign concepts to them. As far as they are concerned, having to do those things means that capitalism has failed.
Rob · February 23, 2023 at 7:53 am
Great post! Personal responsibility no longer exists. Government schools have successfully created this socialistic generation. “Raise teacher pay!” While NO ONE requires that students can read or do math.
Divemedic · February 23, 2023 at 8:14 am
I agree that it’s a crime that students graduate from school without the skills in the “three ‘Rs” but that issue is more complicated than simply looking at outcome.
Schools and teachers are working under conditions that doom them to failure before they even start. That, however, is a story for a different day.
Vitaeus · February 23, 2023 at 8:23 am
Now we just need a hippodrome and two mobs to fear/appease
Jonathan · February 23, 2023 at 11:39 am
We can even keep the traditional Blue and Green, though the factions won’t be as clear cut this time.
Steve · February 23, 2023 at 11:16 am
People a couple decades or so older than I were bitching about the fact that the oldsters had bought up all the good lakeshore property, the ones my age were mad at their oldsters because they only paid $30k for a 3 bedroom/2 bath, etc.
What is different this time is that most people outgrew that kind of envy by their early 30s, and accepted that your circumstances are what you make of the opportunities we all had. Yes, the whiny left were exceptions. They never outgrew it. But now, even bloggers more or less on our side of the aisle seem to not be able to outgrow their childish greed and envy even by their 50s.
it's just Boris · February 23, 2023 at 2:08 pm
Something a lot of people, especially younger ones, fail to appreciate is, when those lakeshore property owners bought those wonderful lots – they probably weren’t that desirable. No roads, or dirt roads if you’re lucky; no docks; no utilities; etc. That’s part of the reason those lots were affordable “back in the day,” and those purchasers were taking a risk at the time that the area would improve.
There are lots of places in this country where people made similar bets, with different outcomes. Large tracts of lots in the Southwest, for instance, that never quite made it.
Divemedic · February 23, 2023 at 2:20 pm
That, and $38k for a house in 1975 meant that a house cost the equivalent of 1,000 ounces of gold.
In 2023, an average house cost 2,000 ounces of gold. You would say that the price of homes doubled, but the average house size today is 2,500 square feet. In 1975, the average house was only 1,500 square feet.
It's just Boris · February 23, 2023 at 3:55 pm
Interesting metrics for comparison. Thank you.
Steve · February 23, 2023 at 5:57 pm
Price is always determined by demand. You have to offer enough to make the guy who has the property want to sell.
What happened is not the roads and docks. That’s dirt cheap. (You put in gravel and the county/state eventually upgrade to blacktop because then they can collect more property tax.) The prices went up because a whole lot more people were willing to offer a whole lot more of their earnings in exchange for the property, driven largely by the second wage-earner making it possible to offer more.
That’s what a lot of people my age (retired, or nearing it) are not getting. The house is only “worth” the difference between what someone will pay for it and what it costs you to live elsewhere. For whatever reason, younger generations as a whole did not save enough to give boomers full market value.
The same applies to boomers’ 401(k)s. Regardless of whatever your statement balance shows, the only way to cash out is to find someone (younger) to buy the stocks. If they don’t have the dosh, neither will you.
Zeb · February 23, 2023 at 11:37 am
Well, I am so Glad the you are one of the “Good Landlords” (sarc).
Unlike the ones I had in 25 Years of Renting before I had “Good Credit, A Steady Job, and Money Saved”. One Otherwise Decent Enough Fellow we rented from for 8 years refused to replace the A/C Unit (Built in 1964) with a new one because “I can still get parts for the old one!” (from One Parts House in Mississippi).
He had been renting the house since 1962. In his mind, “that” A/C unit was still new, since he had bought it 2 years after he had bought the house to rent. These conversations took place from 2003 to 2010, as I begged him to replace the worn out A/C with one that would actually cool the house. He did not buy a new one, until we told him we were moving out. Then it was a priority, to try to get us to keep renting. By then, too late. We had bought our house.
This is to say nothing about the various Houses and Apartments we rented in the 17 years before we bought our house.
I really feel for you, as a Landlord as I have heard and read many “Bad Renter from Heii” stories. But, Frankly there are too many awful Owners / Landlords undermining the Rental Housing Business, for me to have an over-abundance of sympathy for you. Huge Real Estate Investment Companies are currently upending the whole Rental Housing Business, like roaches. AS they take over the whole “Renting a Place to Live” experience gets worse and worse. Small Folks such as yourself are being pushed out. For that, I do feel for you.
But, the whole “Dave Ramsey-Rentals as Passive Income/Investments” paradigm is as dead as the Baby Boomers soon will be. In the world that was, “Some” Landlords were ok, a few were great, and the rest range from cheap to slumlords. Nowadays? 50% of rentals are owned by Corporate Slumlords, who’s only interest in “Monetizing Their Investment”, while most of the other half are desperately underfunded and inept seemingly “accidental Landlords” who have no clue and no money to be in the business they find themselves in.
The small 2-6 Houses professional with adequate resources and care for his renters? A Dying Breed. Sad to see them go, but the world has changed, and that type of person and business has had their time in the sun. Their days are numbered. Those foolish Young Folks you mentioned. They WILL get their way, sooner or later. The fact that when they do, get what they want, it will kill the rental business is of no consequence to them. They are too foolish, to even see what it leads to. They are too arrogant to listen to others who try to warn them of their foolishness. So, it will all burn down sooner or later.
Best Bet, just try to step out of the way.
Divemedic · February 23, 2023 at 11:47 am
So you didn’t like your landlord’s business practices, yet didn’t move anywhere else. Meaning that you voluntarily stayed in that house. So the value you go for your rental dollars wasn’t so bad, right?
No one FORCED you to stay there for 7 years. I will rent places out as long as I can turn a profit and not one day longer. Then those tenants who can buy a place will, but that isn’t most of them. No, most tenants will be shit out of luck. Then I will sell and move into other investments. I just don’t care if some loser with a part time job and mommy’s money can afford to buy it or not.
You better hope that the “foolish young folks” don’t get their way, because when they do, private property rights in this country will be a thing of the past.
Zeb · February 23, 2023 at 3:35 pm
I did move, several times when I was younger. The A/C guy was a better Landlord, than many of the others I left. Besides it took me some of those years to build the stable credit history needed to buy my house.
So which is it? Keep moving and torpedo my credit, or put up with an ‘adequate” L.L. and save to buy? Which is what we chose to do.
You can’t have it both ways.
Divemedic · February 23, 2023 at 4:07 pm
Moving doesn’t torpedo your credit. Changing jobs doesn’t, either. Not paying your bills is what torpedoes your credit.
If you lived there for eight years, you renewed that lease seven times. That means there were seven times where you could have walked, but you didn’t. You CHOSE to live there eight times- with seven of those choices being with the full understanding of what that house and the landlord were like.
The point is that the landlord enabled you to have a place to live that wasn’t your parents’ house until you could afford to buy one. If there were no landlords, what would have happened? You would have lived with your mom and dad.
Bitching that the house wasn’t what you wanted is a pussy ass move. You could have moved to a better place but chose not to. For whatever reason, it beat the alternative.
So now you cheer on the collapse of the entire country because you want to be a bitch assed little child about the landlord not buying you a new air conditioner while still not raising your rent.
Zeb · February 23, 2023 at 5:55 pm
Boy, You have me wrong.
But, I have said my piece.
First time in 50 years I have been called that name.
But, you do you.
Divemedic · February 23, 2023 at 6:02 pm
That’s how it came across. If that isn’t what you meant, you are certainly encouraged to clarify your position.
If that isn’t what you meant, then I would owe you an apology.
Steve · February 24, 2023 at 11:36 pm
@Zeb, your story is not unusual, but you do not understand the backstory. The A/C system in the house you rented was almost certainly R-22 Freon. By the time you were renting there, that had been phased out. Not by your landlord, by the government. It was not as simple as squirting in R-410 as a replacement. R-410 is not compatible with the compressor or the A-coil of a system designed for R-22. Someone was going to have to pay several thousand dollars for the conversion, and it sounds like you weren’t willing to be the one to pay.
Heck, just the refrigerant itself is on the order of $1, 000 for a 30# cylinder. If you were the landlord, would you have spent that kind of money on a rental?
Yes, I get that you and the young-uns don’t really care that it was the government that screwed you. You prefer to blame the landlords. Though I am not one, I will stand with them.
Jonathan · February 23, 2023 at 1:05 pm
If they don’t like the work that capitalism requires, they really won’t like what socialism requires!
This reminds me of the saying that hard men produce good times that produce soft men that produce hard times… These people are going to produce epic whining when hard times come, if they survive that long.
Divemedic · February 23, 2023 at 5:59 pm
They all think communism means that they are going to get a check to sit around and play video games or write rap “songs”
Wait until they find out that they have to work at the job assigned to them by the local collective.
Bad Dancer · February 25, 2023 at 10:15 am
I’m not young I’m in the beginings of middle age
I’m not a socialist, communist, or any other kind of ist I didn’t sign my name to any ideology other than my oath to protect and serve my nation and community.
I recognize landlords are like any person or business. Some worked hard to get to where they are by denying themselves excess and frivolity to build up a portfolio of investment and others have used their families money or scammed their way to sucess. It is very much against my ethics to paint with a broad brush and further any form of government interferance.
When I complain about rent it is because I am living in an older community with no gym, pool, clubhouse, garages, parks, or anything else but a roof and a parking spot. I picked this place because it was the cheapest, safest option while I worked to repair my ruined finances from lending most of my savings to family who decided it was a gift and a failed business when my two friends bailed after finding out hard work was hard work.
A new company bought us out and raised rent 30% with 30 days notice and no notice of new ownership. They’ve raised rent 30% again this year and added on fees for everything from their office supplies to the street lights calling those security systems. The units of the tennants that left due to not being able to afford the place were remodeled and priced at almost 3,000 dollars have almost all gone so far to section 8 and voucher housing which has caused a massive increase in crime.
I could move across town to the ghetto and face even more crime and a lax police force, I could move further out past what used to be affordable but that area has been bought up my ‘luxery apartment living’ developers to where what is within my price range is more than an hours drive in to work.
I acknolwedge these things are legal and am not asking for a law to punish people or take from those that have. I’m here because I made foolish financial choices earlier in life and am working hard to fix them.
Work has locked everyone but administration from merit based raises through a new Roadmap and Workday program/company. Now the only way you can get a raise even if your job duties change is through a matching job offer from another insitution. We’re also one of the largest employers in the state and that massive administrative HR force spends much of its time blackballing employees from other businesses up to fradulant preformance reviews and threatening termination.
Am I free to leave? Yup sure am! Am I doing the assigned duties of four others above my pay grade who left? Yup! Because my sense of honor wont let me half ass a job. With my limited free time I’m studying for my network security certificates as you once suggested to get the skills that might allow me to escape the leviathan.
Things suck right now for people who weren’t winning 10-20 years ago. Please dont assume malice and ignorance on all our parts. Sometimes we just want to sit down around a campfire and say, “Its hard right now” and not get called lazy or stupid.
TRX · February 26, 2023 at 3:16 pm
> The rate of return has to be higher than the cost of borrowing the money, or the investment isn’t worth making.
That’s waaaay too complex for Joe Sixpack to understand. Even Congress doesn’t have a handle on advanced financial concepts like that!
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