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0 pointsbombcar2y ago0 comments

If I had a group of graduate students at my beck and call I'd love to try to factor out what effect single-family rentals have had on the rental market in toto - because once you remove appreciation, they're often losing money each month, which means they're subsidizing the renters (and willing to do so because they're making it up on highly-leveraged appreciation).

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RussianCow2y ago

> because once you remove appreciation, they're often losing money each month

I'm curious if you have a source for this? Intuitively, it makes sense, but I haven't actually seen any figures that support this. Although my guess is that data would be hard to come by.

downWidOutaFite2y ago

Why would the math be different for apartment buildings? They also appreciate and they usually have better accountants to make sure no money is left on the table if it's available.

bombcarOP2y ago

Apartment buildings get handled in a business-like manner, but are also apartments (which have downsides for the renters).

My theory is that single family homes get rented below what it costs to rent them and the landlords make it up via appreciation.

It's pretty obvious that there are places like this, where the rental prices are substantially below 1% of the purchase price (one of the "rule of thumbs").

cryptoxchange2y ago

I think it’s safe to call this a fact in markets like the Bay Area.

In college three friends and I rented a 1000sqft 2 bed 2 bath apartment with one parking spot for $X, then the next year a 2000sqft 4 bed 4 bath 2 car garage for $1.15X. Per zillow, the owner was renting it to us for 0.3% of the purchase price. The only way for them not to be losing their shirt is crazy appreciation.

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