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I spent 15 years living in my current state before I bought a home. In that time I moved on average every 2 years often due to changing jobs or changing living circumstances. There is no way I could have afforded to buy a home when I first moved here, and even if I could have, I didn't know anywhere near enough about the area or where I would be in 5 years let alone 10 or 20 to have made a good choice for where to buy that home. I love my home but owning this home has cost me well over 50k in repairs and maintenance in the 15 years I've owned it. That is absolutely money I would not and did not have when I first moved to this state and it would have financially ruined me to have bought and owned a home when I first moved here.
Have I had some crappy landlords? Sure. I've also had some great ones too and have very fond memories of some of the places I've lived over the years. None of which would have been possible without landlords in general.
I'd like to know which lenders allow you to do this, given a standard mortgage starts at 20% down and needs to be paid down from there. Unless you're committing mortgage fraud you can't exceed whatever initial leverage you started out with.
That affects houses too
>and the amount you have paid off from the first loan
See previous comment. The amount of money you collect from rents will approximately track mortgage payments.
No, they provide capital. In modern society it's hard to picture what "capital" actually is aside from some wall st bankers in suits, but at the most basic level it's forgone consumption. Every dollar invested in a company or a house is a dollar that could have been spent on an iPhone or a nice steak, and whoever forgone that consumption needs to be compensated for it, otherwise nobody would bother doing so.
If you're trying to imply that absent landlords, every renter in Manhattan is going have $3000 (or whatever) more in their bank accounts per month and can buy so many iPhones and steaks, it quickly breaks down when you think of second order effects:
1. There are only so many apartment units in Manhattan. How do you dole them out? First come first served? How's that any different than the current situation where boomers are set for life, and young people are locked out of the housing market unless they're rich or they inherit? Everyone giving up $3000/month for a place to live in might not be ideal, but it's better than the alternative. In areas without a rental market, but where supply exceeds demand, a black market eventually develops where it basically turns into rent.
https://www.bbc.com/news/business-58317555
2. If there's no cost for continuing to live in an apartment, what incentive is there to vacate a unit? Manhattan is expensive to live in because that's where the jobs are, but if lived there and then retired, why bother moving? It's not costing your anything, why bother uprooting your life, or even downsizing? Note that even owners have incentive to vacate their unit, because it means they can either rent it out for $$$, or sell it to someone else. Absent that you'll have to pry them from their cold dead hands.
3. How would new housing get built? Skyscrapers are expensive, so you need some of capital to build. It might be hard to picture, but not buying an iPhone means that the global economy has slightly more resources that can be put towards building a new apartment tower. So capital will still be needed. Who will provide it?
It's true that the housing economy would become less dynamic. The metagame would have to shift from forcing people to vacate existing properties to the government led construction of attractive new units and some kind of planning to ensure that new areas are not starved of jobs. Kind of like China.
The basic problem in America today is an absolute lack of democratic control of the government and our capitalist class. I can go into this in some detail but it is a large digression from the topic at hand. But I will add, that even Donald Trump is afraid to directly cut popular programs, or at least has some limits.
Yes, every time my lease was up, I elected to stay or move. I did that multiple times for 15 years. By contrast, every time I moved, I was in the same state, so never changed governments.
By comparison, if I had lived in a world where all residential property was owned by the state, I would likely have to wait anywhere from 2-6 years before I could even begin to make a change in management. Then I would have to hope that the majority of voters in my area wanted the same things I wanted from my management. Then assuming that my preferences carried the day, I would have to hope that whatever changes I voted for were implemented before the next election or run the risk that they would be overturned by a subsequent election loss. And all of that for no additional upsides. The ability of the public to dictate rental law remains the same. The only difference is now every possible change, whether it would normally rise to the importance of a legislative debate or not, is now subject to that legislative debate process.
Ain't no different than leasing bajillion dollar process equipment.