Renting vs. Owning Costs
The cluster debates the full costs of homeownership including property taxes, maintenance, insurance, and HOA fees compared to renting, questioning whether owners bear these expenses or pass them to tenants via rent.
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Sure you can. If you were renting it out instead of living in it, all those costs would have to be paid on behalf of the tennents. It's part of the cost of doing business. So whether you rent or buy for yourself, it's all part of the investment calculation.
aren't things like taxes and maintance passed along to the renters?
it can be if you take into account the rent you don't have to pay. or the rent you might gain from renting it out.
The problem is in the first two - taxes and maintenance. You are still paying your share of them. You are likely paying more, proportionately, than you would if you owned the property directly, because you are also paying someone else to handle them for you.
As long as you pay for maintenance and don't raise the rent, it seems like it would be the same as an investment.
It is expensive to _someone_ all the time. If not to the tenant then to the owner: taxes, heating, HVAC, preventive maintenance, cleaning, security need to continue - filled or empty.
Things like property taxes and maintenance are fixed costs for property owners. Those can eat up 50% or more of the rental income. So if renters aren't paying, even property owners who don't have a mortgage have high fixed costs that they have to pay.
If it costs 2k/mo just to insure, maintain, and pay taxes on your property, how is somebody renting something comparable for 3k?the landlords in your neighborhood are only taking 1000 a month to service their loans, their overhead, and then take profit? Sounds like a tough business
You often (depending on region and property) have to pay some kind of ground rent and/or non-trivial tax that you can transfer to the occupant. Also they can pay for maintenance and also point out big problems (water leaks - yes they do happen and be very unwelcome even if you have insurance). Overall, the net gain is low but that's better than 3 or 4 years of a minor accumulating net loss. Also the management fee is say 10% to keep your place in shape, so actually quite cheap in reali
Along the course of those 20 years will be 20 years' worth of property tax, home insurance, and maintenance that renters will largely not incur on top of rent (it is arguably built into the rent, of course).The owner is not "saving" $480K, but a sum quite a bit smaller than that, likely around 20-40%.