First, the tenant is paying the mortgage. So while your landlord makes $X in monthly income ($X x 12 in annual income), they make $Y in capital accumulation. That is, their tenant is buying the landlord a property and giving the landlord a monthly income.
Even if the mortgage is interest only, the landlord benefits from property appreciation (house prices going up) for as long as the tenant keeps the bank happy with mortgage payments.
$3600/yr plus a free house in Cali to live in or sell at retirement isn’t a bad deal for doing zero work. If all or a portion of that income goes towards the mortgage for the property where the landlord lives, the tenant is really paying off two mortgages, not one.
Second, the portion of the rent that goes to pay taxes, interest, agency fees, etc, is still rent. The landlord facilities all these other scummy practices. Additionally, if there is ‘only’ a $300 cushion, the landlord is likely to immediately pass on any increase in fees, interest, taxes, expenses, to the tenant in the form of charges or increased rent. That kind of thing makes it very difficult for tenants to plan for the future and probably increases the likelihood of eviction if they can’t get a pay rise the next time the landlord ‘has to’ put the rent up.
I’d suggest that those landlords who are doing the buy-to-let thing are liable to being worse landlords than others. How much can/will a landlord pay to maintain the property if they have conceptualised the whole thing as them ‘only’ earning $300/month? (For doing nothing except ‘own’ a deed, which on a mortgaged rental property is effectively a small partnership with an imperialist bank.)
I should add a caveat. This is just to lay out the facts. I’m not overly concerned with small landlords like this. It’s not much different to investing in a pension is stocks and shares or buying government bonds. It’s also relatively insignificant in comparison to the functional exploitation by western labour aristocrats of proles (in the global north but mainly in the global south). (In simple terms: western workers get paid so much only because global south workers get paid so little.)
How much rent does the tenant pay?
Two points.
First, the tenant is paying the mortgage. So while your landlord makes $X in monthly income ($X x 12 in annual income), they make $Y in capital accumulation. That is, their tenant is buying the landlord a property and giving the landlord a monthly income.
Even if the mortgage is interest only, the landlord benefits from property appreciation (house prices going up) for as long as the tenant keeps the bank happy with mortgage payments.
$3600/yr plus a free house in Cali to live in or sell at retirement isn’t a bad deal for doing zero work. If all or a portion of that income goes towards the mortgage for the property where the landlord lives, the tenant is really paying off two mortgages, not one.
Second, the portion of the rent that goes to pay taxes, interest, agency fees, etc, is still rent. The landlord facilities all these other scummy practices. Additionally, if there is ‘only’ a $300 cushion, the landlord is likely to immediately pass on any increase in fees, interest, taxes, expenses, to the tenant in the form of charges or increased rent. That kind of thing makes it very difficult for tenants to plan for the future and probably increases the likelihood of eviction if they can’t get a pay rise the next time the landlord ‘has to’ put the rent up.
I’d suggest that those landlords who are doing the buy-to-let thing are liable to being worse landlords than others. How much can/will a landlord pay to maintain the property if they have conceptualised the whole thing as them ‘only’ earning $300/month? (For doing nothing except ‘own’ a deed, which on a mortgaged rental property is effectively a small partnership with an imperialist bank.)
I should add a caveat. This is just to lay out the facts. I’m not overly concerned with small landlords like this. It’s not much different to investing in a pension is stocks and shares or buying government bonds. It’s also relatively insignificant in comparison to the functional exploitation by western labour aristocrats of proles (in the global north but mainly in the global south). (In simple terms: western workers get paid so much only because global south workers get paid so little.)