> people don't know how to price rentals
And "helping" them is a lawsuit magnet: Big landlords are colluding to raise rents, D.C. lawsuit alleges https://news.ycombinator.com/item?id=38155840
And "helping" them is a lawsuit magnet: Big landlords are colluding to raise rents, D.C. lawsuit alleges https://news.ycombinator.com/item?id=38155840
My theory is that single family homes get rented below what it costs to rent them and the landlords make it up via appreciation.
It's pretty obvious that there are places like this, where the rental prices are substantially below 1% of the purchase price (one of the "rule of thumbs").
In college three friends and I rented a 1000sqft 2 bed 2 bath apartment with one parking spot for $X, then the next year a 2000sqft 4 bed 4 bath 2 car garage for $1.15X. Per zillow, the owner was renting it to us for 0.3% of the purchase price. The only way for them not to be losing their shirt is crazy appreciation.
I'm curious if you have a source for this? Intuitively, it makes sense, but I haven't actually seen any figures that support this. Although my guess is that data would be hard to come by.