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{Opinion} How Corporate Landlords Are Influencing Millions

{Opinion} How Corporate Landlords Are Influencing Millions

Over my career I have personally helped hundreds of clients along their home ownership journeys, and through my agents have helped hundreds more. What I have learned even through my own experience as a homeowner is how even though some parts of homeownership are not fun, I wouldn’t trade it to become a renter ever again. All over the internet, you will find articles, videos, etc that promote being a renter. They highlight all the maintenance costs and headaches of homeownership, but rarely will you see stories like the one I am about to tell you.

In early 2020 I was representing a new construction builder who was building some nice 3 bed/2 bath homes on half acre lots and no Home Owner’s Association (HOA). An acquaintance approached me about buying one of them, as they were just renting at the time. The homes were in the low $200’s and rates were in the low 3% area. With taxes and insurance thrown into the mortgage, they were looking at a payment of $1200-$1300/month. At the time they were renting for $1100/month. Ultimately they decided not to buy, as they were worried “it wasn’t the right time” and “we can rent for less”. Fast forward to early 2023…

Now we are in early 2023, and I became aware of where these acquaintances are at now. Their rent is now $1500/month on the same house. They have a landlord who does not maintain the property and they have had roof leaks, sewage back-ups, dishwasher leaks, appliances breaking with no repair, and now mold from all of the water damage. So looking back, would it have been better to buy a brand new home in 2020 for $1200-$1300/month? But what about how much it costs to maintain a home? Because you know that any time someone talks about how owning a home is better, somebody will continue the narrative that maintenance costs make owning even more expensive than renting.

Well, let’s talk about it. We will ignore the fact that this new construction home shouldn’t have any major system replacements for 10+ years… We will also ignore the fact that they are paying at least $200/month more in rent than they would mortgage now, which amounts to $2400/year that could be saved for maintenance. Let’s just look at equity! That same home in 2020 that would have been bought for low $200’s, is now is likely worth about $300,000. That is easily $75,000+ in equity that far exceeds any maintenance costs associated with home ownership.

So here is the truth. Your landlord is a homeowner. Your landlord is likely creating wealth through ownership. Landlords make money from renters. So does owning really cost you more than renting in the long-term? No. An emphatic no! While renting has its place and is a necessity (big thank you to mom & pop landlords that have filled this need for generations), fear tactics and bad information on home ownership have cost so many people. Young people especially. With the rise in corporate landlords, home ownership propaganda is going to continually pop up anywhere you consume media. Hedge funds, Real Estate Investment Trusts, and other corporate landlords have spent billions of dollars acquiring real estate to turn around and rent to the largest generation, millennials. Millennials make up the largest generation, but most studies conclude they have one of, if not the lowest home ownership rates. Corporate America wants to take every dollar they can from you. And they intend to do that by weaponizing media and advertising to make you believe it is not a good time to buy. And I will let you in on their secret… They will never tell you it is a good time to buy.

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