- Joined
- Aug 14, 2012
- Messages
- 35,070
- Reaction score
- 26,905
- Gender
- Male
- Political Leaning
- Libertarian - Left
My comment was tongue-in-cheek. I agree that the video makes incorrect assumptions.
And those would be... ?
My comment was tongue-in-cheek. I agree that the video makes incorrect assumptions.
I get that. However, I think if given the financial opportunity to buy or rent, most renters would buy.
No one said there should be a law against living in the country. In fact, if you love your five acres you should be opposed to sprawl as it leads to higher property taxes for you.
Sprawl leads to several problems including increase of infrastructure costs, more pollution, destruction of natural space, light pollution, etc.
I am a happy man: my place is paid off. My cars are paid off. I owe almost nothing. Great place to be even if it took 20 years to get here.
The beauty of a fixed mortgage is over time it tends to consume a smaller % of your income.
The video verifies that increased wages will contribute to a higher cost of living for all -- so, that should tell those who favor forced increased minimum wages that they'll just be creating a vicious cycle of inflation and higher rent.
Good video for opposing minimum wage increases.
The Law of Rent:
Inflation happens in all thriving economies and it makes it worse when wages don't keep up.
In a free market, wages naturally increase or decrease based on supply and demand. Artificially boosting wages, however, such as implementing minimum wage increases, can contribute to inflation.
My five acres isn't in the country, it's part of the sprawl. We are surrounded by neighborhoods that are four houses per acre. Doesn't matter to me that they like a smaller lot, I guess that's better than living in a high rise. Last thing I want is for government to assign me a living space, I can make my own choices and pay for them.
Good video for opposing minimum wage increases.
Nonsense. The minimum wage demographic is represented by roughly 3% of the population. The actual problem is the inverse of your postulate: a minority earns within max wage rate and therefore is capable of purchasing property in excess of the population's ability to own, for the sole purpose of earning economic rent.
:lol:
Did you ever consider where the term economic rent originated?
That's what the video claims.
Didn't you watch it?
So basically, it's what we've known since we were kids? It's better to own, then rent? Sounds like it!
The Georgist video is not good for opposing minimum wage. Didn't you watch it?
Maybe. Of course a lot of people who are buying are essentially renters as they will strip out that equity every few years to pay for other things so there isn't much hope they will ever pay it off. In addition, there is a landlord philosophy essentially along the same lines--building up equity doesn't maximize revenue so it is better to have no equity and buy up more and more houses as opposed to just having far fewer paid for houses. That was the cornerstone of the infomercial get rich real estate programs they sold people off TV back in the 90's and early 2000's. Think the guy was named Tony Robbins or something like that.
I personally prefer owning. A lot of the repairs and replacements I can do myself to save money. More to the point, when I am elderly and having to spend all my money on drugs, I don't want to have to be choosing between food and meds and heat/AC because I still have a roof to pay for. It will already be paid for.
Landowning has practically no risk, which is why landowners in the city can sit on a vacant site for years without selling/renting. It is one of the few investments where you get an almost guaranteed return due to population growth and infrastructure.
There is risk. Not everyone can afford to own that property, pay taxes on the property that sits there and gives nothing in return
I can't really say I have any experience in owning land in the city. I was never interested; the taxes are typically very high, the regulations and requirements rather stringent (read expen$ive) and you're subject to frequent changes by city council or bureaucrats with the co$ts associated with same.
But I have studied real estate, owned real estate, and had friends who were landlords. To say there is no risk in land ownership is false. If you're getting $0 income from a property but still paying taxes and compliance costs, let alone mortgage payments, you're in a negative cash flow situation. Every owner has a limit to how much negative cash flow they can withstand before they become desperate to get rid of the property, even if it means letting the government take it for back taxes.
Maybe things are different in Jersey and Chicago, land o' corruption, but I wouldn't know I stay away from them.
Land values fluctuate. While it is true that, over the long term property values tend to rise, there can be short-to-medium term drops in local property values that can put a real bind on owners in the area.
If a neighborhood goes into decline (crime, poverty, etc) and property values fall, this can be a problem. If you own 50 units (@ 1440/mo rent ech) in Fallen On Hard Times Ville, and your mortgage plus expenses plus taxes are $60,000 a month on them; but people are leaving the area in droves, your occupancy is way down and you've had to offer deep discounts to get/keep ANY renters... let's say you're only renting 70% of units and at a 20% discount, you've got $40,320 income and you're losing 19,680 a month... most owners who aren't huge national-scale corporations can't sustain that level of loss indefinitely.
Unless you're a giant corporation with lots of pull in City Hall, you can't make the police put in extra effort to clean the neighborhood up; you can't make the people living in FOHTVille stop dealing meth and shooting at each other; and you can't afford to drop a couple million in improvements to attract more/better renters if things might continue to slide downhill.
You'd have to be able to afford to suffer that big monthly loss for a very long time before the "land always rises" principle paid off, and many landlords could not afford to.
Now obviously smart investors try to choose wisely and avoid such situations, but things like that can and do happen.
No it wouldn't.
Prices are set based on what the market will bear, and ratios change all the time. Milk is now half what it was five years ago, yet wages are up. Tshirts cost exactly what they did ten years ago despite the fact that wages are up. Gold fluxuates daily without regard to income. the cost of education and medical care has risen much faster than wages.
Overall, most things on average do not keep up with wages. If they did, we would all still be living the standard of living that we did two hundred years ago.
Sorry, but you are making a wrong assumption. Ratios change all the time.
Landowning has practically no risk, which is why landowners in the city can sit on a vacant site for years without selling/renting. It is one of the few investments where you get an almost guaranteed return due to population growth and infrastructure.
I did. It claimed increased wages led to inflation.
Why are you ignoring that?
There is risk. Not everyone can afford to own that property, pay taxes on the property that sits there and gives nothing in return
Agreed. Prices are what the market will bear, including the price of rent.