Comment by _andromeda_ | Hacker News Reader

Comment by _andromeda_ | Hacker News Reader

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>The only thing that stops this system of parasitic wealth transfer from spinning out of control is re-redistributive taxation.

At least we're in agreement that parasitism is not a desirable outcome. We seem to disagree on what constitutes parasitic behavior.

First of all, I think that the idea of estate tax is lunacy in and of itself but now that we have it, let's think about what you're saying; that it's not okay for an individual upon death to transfer his/her wealth to a person of their choosing (whom they may have mentored to further a legacy they were passionate about) but that it is okay for the proletariat to forcibly acquire said wealth because they know better?

How is that not outright theft? I would like the opportunity to freely determine how my acquired wealth will be spent after I'm dead. If I would like to leave it to a mentee of mine to further some work I had began, then being the acquirer of said wealth, I deserve that right.

You know, this experiment is already done and dusted. Any time you advocate for egalitarianism, look at the results of "The Berlin Wall's great human experiment" then be afraid. What sort of government shoots its own people to prevent them from running away from the horrid conditions they've created? I'll tell you which one, a socialist/communist one.

>How is that not outright theft?

It's re-redistributive. Taxation somewhat compensates for the redistributive effect of the rentier economy, which you could also characterize as theft for similar reasons.

>I would like the opportunity to freely determine how my acquired wealth will be spent after I'm dead

And I would like not to have to dedicate 40% of my income to renting property from non-productive (sometimes anti-productive) members of society.

Euthananize the rentier and I'll be happy for you to keep 100% of the wealth you earned with actual work.

Until that time, no.

That non-productive/anti-productive member of society is the one that keeps your appliances running, makes sure your roof isn't leaking, and fixes your pipes when they leak. They're not just sitting back and watching the money role in. Managing property, moreover doing so profitably, is not a kick back and relax kind of job. You're welcome to buy and maintain your own property if you'd like. It would cost you about as much in the long run.

>That non-productive/anti-productive member of society is the one that keeps your appliances running, makes sure your roof isn't leaking, and fixes your pipes when they leak.

No, that's called a property management company. Around where I live they take ~10% of the rent and pass the rest on to the rentier.

Try again.

Nope, rent management companies generally take a cut for doing the _Management_ portion. That means drawing up forms, selecting renters, doing background checks etc. The landlord still has to pay for or do repairs. I wouldn't be surprised if some management companies will arrange for repairs to be done as part of what they do, but it still comes out of the landlords pocket.

The problem with this is that even if you only just break even as a rent-seeker, you're still creating wealth for yourself and reducing the market of available properties for potential buyers, creating massive negative externalities.

Landlords are doubly parasites.

>even if you only just break even as a rent-seeker, you're still creating wealth for yourself

That sounds utterly contradictory.

Landlords provide a service by maintaining and managing properties. They assume most of the risks including damage to the property due to fire and natural disasters. They provide a means for people with little to no credit to afford a roof over their head when they can't get a loan. You are not just paying to live somewhere when you pay rent. You are paying for all of these services and more. If landlords were purely parasites they wouldn't be able to make any money. People would just go around them. Just because you don't like the need for the service they provide doesn't mean they don't provide a service.

>Landlords provide a service by maintaining and managing properties.

We already established that property management companies do this for 10% of the rent.

>They assume most of the risks including damage to the property due to fire and natural disasters.

Should I charitably assume that you've just never heard of insurance?

>They provide a means for people with little to no credit

That 80% of the rent which goes into their pockets after management, insurance and repairs are taken care of is pure, unadulterated parasitism.

Just as payday loans are parasitism.

They both effect net transfers of wealth that, similar to a payday loan. Capitalism grants an entitlement to those with more money to receive an income only because they have more money.

>You are paying for all of these services and more

You are often paying and not even getting these services. Many landlords end up not fixing stuff that breaks.

>If landlords were purely parasites they wouldn't be able to make any money. People would just go around them.

Not possible while they own deeds to the land. Ownership of the land is the part that lets them be parasites.

>Just because you don't like the need for the service they provide doesn't mean they don't provide a service.

Owning land is what gives them the ability to provide a service and charge 5x what it is worth.

If land ownership were illegal and it were simply rented from the government at the exact prevailing unimproved rental value then landlords would become more like an average shop owner rather than massive leeches on productive members of society.

>We already established that property management companies do this for 10% of the rent.

Closer to 30% and that doesn't include maintenance costs and insurance which are _VERY_ significant.

>Should I charitably assume that you've just never heard of insurance?

I've been charitable by not bringing it up. It costs ~40-50% of your gross income from a rental property where I'm from.

>That 80% of the rent which goes into their pockets after...

Point me to where I can make that kind of money and I'll quit my job today. I'm sure I would have absolutely NO trouble at all getting a loan if I was pretty much guaranteed an 80% profit.

>Many landlords end up not fixing stuff that breaks.

If it's in the lease that they will (It's in mine.) Then sue them. If not, fix it or move. I've yet to see a lease that didn't include timely repairs.

>If land ownership were illegal and it were simply rented from the government...

It pretty much is. What do you think property taxes are? When you pay for land you're just providing an incentive for another party to cut their lease short.

>Not possible while they own deeds to the land. Ownership of the land is the part that lets them be parasites.

Land is cheap in a lot of places. Sometimes much cheaper than renting. The barrier to buying land varies, but sometimes renting is a better option.

Offering people a service of housing, without having them to deal with the complexities of property purchase, financing, transaction costs, maintenance and whatnot comes with it.

How dare they!

Instead, they have to deal with the complexities of finding new rental properties and moving on a regular basis in order to keep the rent in check (or just sometimes randomly because their landlord decides to sell up), convincing their landlord to actually do maintenance, put up with the fact that they're not allowed to make any modifications to the property, etc.

And life of a landlord is all rainbows and unicorns?

Get real.

Except you can pay somebody to take care of all of the 'complexities' and still make a fat profit. I can't pay somebody to take care of setting up and running a software business and make a guaranteed large profit.

That profit is parasitically extracted. No 'work' was done to actually get it - it's merely the privilege that having money gives you.

Some landlords do do the work themselves, which simply means that not all of the income derived from their properties is parasitically extracted - only ~80%.

>fat profit

Probably not. You'll barely break even. It's not as lucrative as you think it is.

In some markets they tend not to do repairs, in some they do.

If you were being generous you could argue that landlords lose another 10% of the rent to repairs.

That still leaves a big fat 80% slice of the rents coming in which is free money.

More like 20% if you don't include labour. Then take out another 40-50% for insurance on the property. Then put the rest into paying the mortgage. Which you admittedly get back, but remember you're doing all the work on the house yourself and houses do wear out over time so that will eat into your margin even more.

EDIT: Don't forget about property taxes! Those eat up a pretty big chunk of the rent too. They're usually a couple hundred a month. Let's be nice and call that 10% although it's generally much larger.

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