alt Hacker News> I love how this conveniently ignores the equity you acquired in this year and almost certainly the appreciation.
I love how I addressed both those things in my comment and you chose to ignore it or just didn't read
Appreciation is a gamble that you bought at the low or just plan on holding for a very long time and even then, most economists will tell your real estate should appreciate at the rate of inflation - so not a good investment. Rent can go up but that's a gamble too, or just takes a long time to become significant above your mortgage payment. Everything else goes up with time as well - tax, insurance, maintenance, etc. So it doesn't flow through to the bottom line like you think it does.
Equity is not very material either for the first decade or more. Most landlords have a mortgage to pay on that property and you should look into how an amortization schedule works. Your rent payment is mostly going to interest to the bank, not building equity for the landlord.
The landlord is mostly taking on a huge risk in hopes the stars will align and 1) appreciation will happen 2) equity will be built and 3) it's not all eroded by a high maintenance structure or bad tenants destroying the place. The main reason it is so prevalent in the US is, low interest rates for a long period of time allowed leverage (most landlords would not be if they had to pay cash) and shortage of housing inventory and housing cost more to build that many people can ever afford-aka-forced to rent.
Sure, there's plenty of regulations that could be done to falsely manipulate this market. But, so far, the only reason rentals continue to be developed is because of the investment opportunity. If that went away due to regulation, I for one wouldn't trust our government to solve the problem completely and also fund development, renters can't fund it or they wouldn't be renters, and so prices just go up even more because there is now a severely limited supply of rental housing and no ability for investors to deploy capital towards that problem. Like most things related to regulation, you can't just ban something without thinking the problem through more completely and having a holistic solution. If you do, you just are meddling and will screw it up worse than it already is.
> Most landlords have a mortgage to pay on that property and you should look into how an amortization schedule works. Your rent payment is mostly going to interest to the bank, not building equity for the landlord.
What? No. Explain to me how after putting 10% down, I was able to get out of PMI because I had 20% equity after the first 18 months of my mortgage? After all, at 18 months at 3.5% I've only paid down 2.1% of the principal. That's not how that works. Principal != Equity.
> The landlord is mostly taking on a huge risk in hopes the stars will align and 1) appreciation will happen 2) equity will be built
A "huge risk"? No, it's a pretty safe bet. Positive appreciation on home prices in the US has happened 28 out of the last 30 years.
And again, you build equity with each payment of your mortgage, 0.29% per month even factoring in that negative appreciation in, on average, 2 of the 30 years of your mortgage AND zero positive appreciation. Like I said, between May 2021 and November 2022 I was able to garner 4.8% equity due to appreciation alone (net zero I should have gained 5.2% - 18 months at 0.29%/month).
"Hoping the stars will align"? Come on now. Then why bother, if it's such a crap shoot that you're unlikely to ever make a profit on? Out of the sheer good of your heart? No.
Also, coming back to one of your original points:
> Sure even if you pay a few thousand in rent, it may be the landlord only has a couple hundred of cash flow. Then, one repair on the home can easily wipe out a year or more of that.
Then maybe you can't afford to be a landlord?