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Comment by notch898b | Hacker News Reader

I guess the big question is whether landlords will hand down to tenants the massive increase in mortgage costs as interest rates rose while real estate barely budged.

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> massive increase in mortgage costs

Sorry, but why do you think landlords have experienced an increase in mortgage costs?

Maybe if they have adjustable rate mortgages or if their loan originated after March 2022. But I don't think that's the case for the vast majority of established landlords.

What's way more likely is that everyone marking rent money off of leveraged property went ahead and refinanced everything to 2-3% fixed rate mortgages as soon as that became an option.

There is the other side of the coin here, in that if landlords are trying to expand their businesses / finance improvements to properties, they will be looking at taking on more debt. This will increase their average rate, and they will absolutely pass that on to their tenants. The question is of timeframe over which this process will occur.

In the US, improvements/repairs to rental properties are extremely tax advantaged. You might take on debt for the initial liquidity, but as I understand it's easy for landlords to use these expenses to effectively nuke their income tax liability.

If we're to believe the media, one of the myriad issues with housing at the moment is that landlords held onto their low-rate pre-pandemic mortgages, so there might broadly not be an increase to pass on.

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