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Comment by mistrial9 | Hacker News Reader

a single individual woman in California who inherited her family rental units business in Southern California declared on her IRS returns seventy thousand dollars a month personal income, for the year of 2019. The number of apartment complexes is about a dozen, of varying sizes. It is not clear that she has any real duties on a given week, living far away from the location with no contact details.

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>It is not clear that she has any real duties on a given week, living far away from the location with no contact details.

That's... how investing works? The average S&P 500 investor is probably making even more money than that lady (in percentage terms), with even less work. If you're a landlord you have to deal the hassle of finding renters and fixing stuff, or hiring a management company who take a significant cut. If you're an S&P 500 investor on the other hand you pay vanguard 0.03% and they handle everything for you.

The stock market investor makes money off of other stock market investors playing the game. Landlords are making money off of real working people.

It's hard to take the "stock market is just a game" claim seriously when it's been reliably delivering returns for the past 5 decades. Moreover the stock market pays for the retirement of working people after they've retired, and funds working parents' college fund for their kids.

Is that from the article?

> living far away from the location with no contact details.

To be fair, if I was renting apartments, I would 100% never give tenants my contact information, and have them deal with some sort of management company. I'd rather pay someone else to receive the "oh shit, the pipes burst" phone call at 3am.

What value do you provide then?

If you can outsource all of the effort to other businesses, but you still make a profit, then you're essentially just a tax on top of the service.

> What value do you provide then?

The main value add was capital to build the dwellings in the first place. If that capital didn’t exist, then the dwellings wouldn’t exist either.

The fact that the ROI of that capital is extending to multiple generations may be unpalatable, but it may not be unreasonable (lots of variables).

A secondary value in this case would be hiring a good property management company. Some of those companies really suck, and some are really good. As a tenant, you want one of the good ones. A silent owner who is willing to give a healthy rev-share to the management company is the type of owner you want.

For what it's worth, I would rather beg on the streets and eat out of a dumpster than take on the hassle of being a landlord, but to answer your question in good faith:

In this hypothetical scenario, what I'm providing is the actual physical place that's being rented out, having put up the money for a down payment and the monthly mortgage payments, taxes, etc.

That's nice of you, but you owning the place means that somebody else cannot.

> That's nice of you, but you owning the place means that somebody else cannot.

If this “somebody else” has the capital, then they should build or buy.

Obviously there is an issue of lack of purchasable land/units in certain desirable areas, but that’s a zoning issue. That’s not the problem and shouldn’t be the problem of someone who had the foresight to invest their capital many years/decades prior.

Yeah I should have bought a house when I was 12 years old in middle school. Still kicking myself for that

That's very true.

That is how ownership of a resource works. That is how shares work, how dividends work, how investing works in general. If you own a company, you can have someone doing the basic work, someone else doing taxed, yet someone else clean and someone to sit on reception while you make business decision here and there. Or a lot of them - entirely based on what you want.

Aside from maintaining the building, what landlords are doing is renting access to capital, same as a bank loan.

I have never understood that attitude. Isn't the ability to deal with broken pipes literally part of your job as a landlord? It's like buying a restaurant when you don't like to cook and don't like to process orders - why would you do that? If you don't like your business's business and want to outsource your core competencies, maybe invest in an index fund instead...

> It's like buying a restaurant when you don't like to cook and don't like to process orders - why would you do that?

It may surprise you to learn that restaurant owners often hire cooks & wait staff.

>Isn't the ability to deal with broken pipes literally part of your job as a landlord? It's like buying a restaurant when you don't like to cook and don't like to process orders - why would you do that?

Because you want to make money. You hire someone to do that shit for you, and you sit back and cash checks.

Most people who own restaurants don't like to cook or process orders, either.

Turns out, a lot of Americans aren't actually the fans of capitalism they think they are.

That it’s economical to hire somebody else to manage it while you both make an increasing profit as rents rise and have your assets appreciate alongside it really goes to show how extractive the process is and how much the cost of rent is inflated in order to protect investment return.

Why would you assume a business owner gets personal satisfaction from their business?

They do it because they believe the effort and risk provides a decent reward compared to other available alternatives.

The joyous nature of rent seeking. Best to completely alienate yourself from the people who enable your carefree lifestyle.

Business owners don't typically post their home address and cellphone number for customers to contact them directly, either. (With some exceptions, to be fair. My plumber gave me his direct cell number, though that may be a separate work phone.)

You wouldn't want to feel any sort of guilt or regret when you raise rent prices on a struggling family you've actually met, of course.

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