Interesting read.
A couple thoughts on rent control - on the landlord side.
1. Taxes. Somehow, the landlord has to collect enough rent to pay the taxes.
Let's make Taxes - "A" = $8000/12 = $667 month
2. Mortgage. Sure all landlords paid cash or owned the houses therefore, they
have no debt - even if it's true - it's not free cash.
Let's make mortgage = "B" = $1,000 (180,000 value, 30 years 5%)
3. Insurance. Since AP isn't exactly the world's safest city (correction, let's
say 07712) and it's close to the ocean - you ahve insurance rates above average.
Let's make insurance premium "C" = $1500 = 125 month
4. Repairs, Maintenance . No landlords take care of the property, but assume
they do. A couple trips to the home depot for kicked in doors, holes in the
wall etc. A good CO inspection or section 8 inspection and you fail the FED HQS
(Housing Quality Standards) cost you a few $ - no fault of your own.
Let's make repairs = "D" = $800 = $70 month
5. Misc - Things like permits, fines, lawn care etc that don't fit #4 above
Let's make misc = "E" = $500 = $45 month
PART 2:
Add up A+b+c+d+e and you get $1900 per month just to cover "avg" costs on home
valued at $180,000.
PART 3:
Sh-t. I forgot PROFIT. Sure when you pay your mortgage payment, you pay
yourself some principal. Some. But landlords aren't allowed to make a profit.
Add profit as Item "F".
In theory, the larger the property the greater the return - and maybe the
larger headache.
PART 4 on Rent Control
Another way rent is "controlled" is by what is deemed affordable for an area.
Many residents in AP are subsidized and even for those that are not - everyone
is looking for something clean, safe and affordable.
Housing Vouchers /Section 8 payments help those who are lucky enough find a
place to live and maintain as their home by paying what they may afford or a
portion of it. So if the rent is $1,000, maybe the tenant pays $100 or more -
or less. It depends on what they EARN as income. Unfortunately, some people are
clever enough to recall their math class and figure out the more they work, the
less the benefit is. Simply put, the overall lifetime benefit to NOT WORKING
is better then the long term benefit OF WORKING.... or working "off the
books.."
And to point out, it doesn't matter the color of the skin or the city or town.
People want safe and affordable housing. If you built a tower in AP of $700
studios and $1,000 1 bedroom apts - you'd fill them in 10 seconds.
If.
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