> >As for rent, the property owners just pass the cost on to the tenants by increasing rent
> Rents would either remain unchanged or go down.
The rent must cover all the costs of the property (+ some profit). If any cost goes up, the rent will go up by at least that much. Anything else is wishful thinking.
If the costs go up so much that it's no longer possible to rent because nobody can afford it, that still won't make the rent go down because the owner isn't going to start taking a loss on it for fun. Instead, they'll sell the property and now it is off the rental market for good.
>The rent must cover all the costs of the property (+ some profit). If any cost goes up, the rent will go up by at least that much. Anything else is wishful thinking.
When businesses that can't raise prices get taxed more than their profits they go out of business.
Anything else is wishful thinking.
>Instead, they'll sell the property and now it is off the rental market for good.
It's almost as if there were an army of renters complaining vociferously that prices are to high for them to get on the housing ladder.
"If the costs go up so much that it's no longer possible to rent because nobody can afford it, that still won't make the rent go down because the owner isn't going to start taking a loss on it for fun. Instead, they'll sell the property and now it is off the rental market for good."
What do you mean it's off the rental market? The house doesn't dissapear. Either the next owner rents the house out, so nothing has changed, or they live in the house which means that someone who previously had to rent is now a homeowner. Either nothing changed or it's an improvement.
What is this weired attitude anyway, laws and markets change all the time and sometimes I have to eat a loss, are landlord some kind of divine nobility that never does?
> What do you mean it's off the rental market? The house doesn't dissapear.
I mean it's no longer available to renters. If it's no longer affordable to rent out, the alternative is to sell it off to someone who wants to live in it themselves. Of course the house itelf doesn't disappear, but the number of units in the rental market for that town now went down.
That's fine if those who were considering renting that unit are just as happy buying it as a homeowner. But I see many people saying they only want to rent, so for that audience, the rental supply went down.
> What is this weired attitude anyway, laws and markets change all the time and sometimes I have to eat a loss, are landlord some kind of divine nobility that never does?
I don't understand this comment. What I'm saying is that if the landlord find that renting out becomes unprofitable, they'll simply get out of that situation by selling it off.
"I don't understand this comment. What I'm saying is that if the landlord find that renting out becomes unprofitable, they'll simply get out of that situation by selling it off."
So if previously the buyers consisted of 50% landlords, and 50% would-be residents, presumably now there will be fewer landlords buyers and the price will go down. Is the landlord selling at a loss?
> Rents would either remain unchanged or go down.
The rent must cover all the costs of the property (+ some profit). If any cost goes up, the rent will go up by at least that much. Anything else is wishful thinking.
If the costs go up so much that it's no longer possible to rent because nobody can afford it, that still won't make the rent go down because the owner isn't going to start taking a loss on it for fun. Instead, they'll sell the property and now it is off the rental market for good.