Mastodawn

@BinChicken quite :(

@anathema_device @BinChicken
Could you elaborate why you are angry with Steve precisely?
I am not familiar with the details in Australia, but usually guys like Steve are not the problem. He got himself into an uncomfortable situation, but still seems to be willing to talk with his tenants.
12 properties sounds like a lot - but he still has mortgages all of them. So he does not really fully own them.
At least this is what I get from the article. Or maybe I misunderstood you.

@peter @BinChicken Well, for one thing, 12 houses is a lot of housing locked up in a market which is screaming for houses for people to buy and live in.

Second, the landlords in this city are gouging tenants like you cannot believe, so boohoo for Mr Landlord.

Third, if he couldn't working that historically low interest rates would eventually rise, then he's an idiot. 1/2

@peter @BinChicken

We own two holiday homes in an unusual area which has almost no residential demand. We bought the first because we loved the area and wanted to be able to visit regularly. We bought the second because we loved it and our money was doing nothing in the bank. We do stay regularly, and the accommodation we offer is very affordable.

If we had bought them on mortgages, and were facing interest rate rises, the last thing I would be doing would be whinging!

He can sell a house.

@anathema_device @BinChicken
thank you for the explanation.
While I agree that he is not the smartest investor, I am still not convinced that the anger towards him makes sense (for me). And he is considering to sell. Since he planned for those houses to be his retirement plan, I can understand that he is not happy about needing to sell them.
1/

@anathema_device @BinChicken
With regards to the price gouging:
I do not know the details in Australia, but if he starts loosing money when the interest rates rise, he either has a rather bad mortgage rate or is charging too little rent.
The problem with rent in general is, that it needs to remain profitable for the landlord. If / when Steve sells, I am pretty sure the buyer will adjust the rate accordingly, unless the buyer uses it as a home themselves.

https://www.reddit.com/r/brisbane/search/?q=rental%20increase&restrict_sr=1&sr_nsfw=&sort=new

@peter @BinChicken

"I do not know the details in Australia"

I invite you to browse here

While this man is bellyaching about his mortgages, I bet he's made a lot of money in equity, which he will realise upon sale. I know we have, and our houses aren't in a high demand area.

He is also benefiting from Australia's generous taxation and superannuation fund laws for landlords.

So when he's down to his last property, get back to me with his complaints.

brisbane: search results - rental increase

All things Brisbane, Australia!.

@peter @BinChicken He obviously borrowed money at a variable rate. Fixed rate mortgages are available. So boo-hoo.

Bin Chicken 🗑𓅠 Mar 14, 2023

@anathema_device @peter Well said, @anathema_device.
To answer @peter's questions, I think houses should be for living in, not tools of financial speculation. If you own your own home then it's nice to think it would be worth more if you sell it, but buying additional houses shouldn't come with the unsustainable expectation of continuous and unbounded growth. And I fear because it seems to be the "Australian Dream" nowadays for upper-class and upper-middle-class people to buy additional houses, get renters to pay-off their mortgage for them, and thereafter be a source of "passive income".
In practice, this greed by unsophisticated investors has inflated the housing bubble in Australia and led to a corresponding increase in rent prices.
Renters are being forced to be unofficial guarantors for financially illiterate investors who are taking out reckless mortgages.
All this is happening while there's a shortage in availability for people who want to buy their first home.

@BinChicken @anathema_device
Thank you for your answers. I looked a bit into the reddit, and it seems like the landlords are on average overdoing it quite a bit.
In the areas I am more familiar with, rental places are important for people that do not qualify for a reasonable mortgage. But rental places are only possible if they are either profitable or funded by the government (which is nothing but a dream, at least in Austria).

@BinChicken @anathema_device
But to be frank, I still find calling for a guillotine a bit stark.

According to my experience small investors like Steve usually do not cause the trouble, but large scale investment firms, trying to squeeze out every penny.
Might be different in Australia though.

And, I think this was not clear, while I understand why Steve is upset, I do not think that a lot of pity for him would be justified.

@peter @BinChicken

"I still find calling for a guillotine a bit stark."

Wealth inequality is a massive social problem, and I say that as someone who would probably be first up against the wall come the revolution, as we are comfortable off.

Seriously, you should see the stories of families with kids, people with disabilities, being thrown out of homes by greedy landlords, and it should, if you are at all empathetic, be happy to drive a tumbrel yourself.

@anathema_device @BinChicken
I agree with the problem of wealth inequality, even though I am only observing it from a rather privileged position myself.
I am most familiar with Austria, where renters protections are rather strong, and a decent social net does exist. However, even there, the privileged are getting more benefits by a way too low capital gains tax, and apparently ways to even avoid that.

@anathema_device @BinChicken
Currently I am living in Tokyo, where often multiple generations need to share small apartments, since the rent is too high.
And I am sure, that I am not seeing most of the issues, since I am not able to follow the local news, since I have not grasped the basics of the language yet.

With my limited knowledge, I think that often a fundamental social reform is required, and some of the "villains" are actually just the scapegoats by those really profiting...

@peter @BinChicken I think, also, you might not be used to Australians extremely blunt and often coarse way of speaking to each other :)

@anathema_device @BinChicken
that might very well be the case.
I am a bit odd even for my cultural background in how much I avoid swearing. 😅

@peter @BinChicken um, then you would be *very* odd in Australia! :)

@peter @BinChicken @anathema_device

ekkles Mar 14, 2023

I would not call Steve a small investor. Even if his houses were at the low end of the price scale (say $500K), that’s $6 million in investment assets. Not counting his own residence and anything else he owns

@ekkles @peter @BinChicken indeed :(

@ekkles @BinChicken @anathema_device
$6 million minus however much his mortgage still is. What is the minimum rate that you need to pay yourself? Since he did not do his calculations with variable interest rate, he might also have leveraged his existing properties to buy the new ones - would also explain why he still has a mortgage on the first one.
Steve certainly is well off, no doubt about it.
But he is not institutional level.

@ekkles @BinChicken @anathema_device but with that I think I am out of this discussion - I think we only disagree on the details.
Steve will not starve, and there is no need at all to feel sorry for him.
He just is an investor that did not plan for bad times, but he will manage.
In the markets I know, people like Steve are not the problem, might be different in Australia.
I do not have the data to truly understand him and his precise circumstances. And I feel I talked about him more than enough.