You’re still extracting wealth from the tenant, and the tenant is only losing money. You’re still preventing the tenant from building their wealth through property ownership.
The ethical thing to do in this situation would be to sell the house to the tenant at a price proportional to the rent, minus what they’ve already paid in rent to this point.
Sorry I genuinly don’t follow. If I were to rent out at cost, that means if the tenant were the owner, they’d have to pay the same cost as well. So they’re losing the same amount of money either way.
And how would they be building wealth through property, if the property value doesn’t rise? They would buy the flat for say 50k$, and then own 50k$ worth of property
minus what they’ve already paid in rent to this point
I think you’re assuming that I would be paying off a loan with their rent? By renting at cost I meant their rent covers maintanance/upkeep
So they’re losing the same amount of money either way.
But if they own the property, they can potentially get that money back as the value of the property increases. Property is an appreciating asset, at least in the current US housing market, which is the frame of reference I’m coming from.
And how would they be building wealth through property, if the property value doesn’t rise?
The property value almost certainly will rise, as long as the property owner maintains it properly.
I think you’re assuming that I would be paying off a loan with their rent?
I was assuming that, yes, but it’s sort of besides the point. The fact remains, any money a renter puts in, they can’t ever get back. The property owner however, being the one in control of the appreciating asset, can grow the money that they collect from the renter by investing it back into their property, increasing the rate at which it appreciates.
Edit: in the imaginary scenario where property value never changes, the tenant is still paying all the costs of homeownership, without the benefit of homeownership, ie, owning an asset which has value and can be sold. In this scenario the landlord is simply a middleman who is hoarding an asset.
So ideally every apartment would either be owned by the tenant, or collectively owned by a group of tenants that individually couldn’t afford it (housing co-op)
You’re still extracting wealth from the tenant, and the tenant is only losing money. You’re still preventing the tenant from building their wealth through property ownership.
The ethical thing to do in this situation would be to sell the house to the tenant at a price proportional to the rent, minus what they’ve already paid in rent to this point.
Sorry I genuinly don’t follow. If I were to rent out at cost, that means if the tenant were the owner, they’d have to pay the same cost as well. So they’re losing the same amount of money either way.
And how would they be building wealth through property, if the property value doesn’t rise? They would buy the flat for say 50k$, and then own 50k$ worth of property
I think you’re assuming that I would be paying off a loan with their rent? By renting at cost I meant their rent covers maintanance/upkeep
But if they own the property, they can potentially get that money back as the value of the property increases. Property is an appreciating asset, at least in the current US housing market, which is the frame of reference I’m coming from.
The property value almost certainly will rise, as long as the property owner maintains it properly.
I was assuming that, yes, but it’s sort of besides the point. The fact remains, any money a renter puts in, they can’t ever get back. The property owner however, being the one in control of the appreciating asset, can grow the money that they collect from the renter by investing it back into their property, increasing the rate at which it appreciates.
Edit: in the imaginary scenario where property value never changes, the tenant is still paying all the costs of homeownership, without the benefit of homeownership, ie, owning an asset which has value and can be sold. In this scenario the landlord is simply a middleman who is hoarding an asset.
So ideally every apartment would either be owned by the tenant, or collectively owned by a group of tenants that individually couldn’t afford it (housing co-op)
Yes