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this post was submitted on 21 May 2024
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Can you explain your last sentence? I don't see how landlords are providing capital, at all. If anything, landlords are depriving you of capital, and using your money (rent) to gradually gain capital (increase in ownership of property, through mortgage payment) for themselves.
But maybe I'm misreading you somehow.
Because if you had the capital to buy a house, you would. A landlord has the capital to purchase the house and rent it to you under more favorable terms. I.e., not putting ~20% down and committing to a 15-30 year loan.
What is the alternative (besides a utopian society where everyone is provided housing for free or near-free)?
Sorry, I know you're not the original poster, but that doesn't actually answer my question. The question is "what capital does a landlord provide?" and the answer is, none, because when we talk about capital in this context, we're talking ownership of money or assets.
The landlord does not provide either of these things, and in fact only takes them in order to increase their own personal wealth.
The capital needed to buy the house which the renter either doesn't have, or doesn't want to spend.
I'm not even sure what you mean by this? The capital the landlord provides IS the money to buy the house and the asset (the house).
Just because the landlord makes money off the transaction? It's a transaction. The landlord is providing the risk of using their capital to purchase the home and the renter gains the ability to live there without having to extend their own capital to purchase the house (for whatever reason, maybe they don't have it, maybe they don't plan to live their long, maybe they are adverse to owning property, there's lots of reasons).
Why is it OK for any other business to make a profit from their risk and service they provide, but it's not OK for a landlord? The landlord is providing a service just like any other business.
I get the argument against large corporations buying mass amounts of land and driving up housing prices locking homeowners out of the ability to purchase land, but what is wrong with, if for example I have extra cash, am able to buy a home and rent it to someone who can't purchase a house for whatever reason?
Capital, as in ownership of money or assets that combine to a persons overall wealth -- A landlord does not provide this, and only takes it from the renter in order to increase their own capital. You can make an argument that a landlord provides a service, sure, but not that they provide capital, because they really don't. Maybe you mean they provide a means for a renter to accrue capital? Even then, that's shoddy, because you have to drill down to owners who actually care about their tenants vs those who charge as much as the market allows.
You can bring up risk, and sure, the landlord incurs risk. That risk is losing their property and becoming a renter. The "service" they provide is entirely dependent on their ownership of property, and I don't have much sympathy for a person who uses their ownership of property to exploit another person's need for shelter in the name of accruing more capital.
Those are kinda my quick thoughts, and I'm not totally prepared to defend the absolute shit out of them. My initial point was that landlords do not provide capital, and I stick by that.
To be clear, I don't think being a landlord automatically makes you a bad person, considering the economic system we live in. But I also don't think landlords provide a good, generally, to society. I don't think we need landlords, and I don't think they become landlords out of the kindness of their hearts, or that they wish to provide a home for someone. They just own more, and as such they can use that ownership to further increase their ownership. I don't think your example about you with extra cash is wrong in the context of the society we live in -- hell, I'm pretty much in that exact situation with my roommate, with whom I was renting before I bought a house. Sure, you could say I'm doing him a favor by letting him live in my house for a low cost, but mostly I am the one accruing capital at his expense. It doesn't make me a saint for doing that, it makes me greedy that I'm charging anything at all. That's part of the disgust I personally have for this system, is that we are all compelled to own more more more more. It's really not work hard and you'll succeed. It's own hard.
Landlord lets tenant use their capital in exchange for rent.
That totally clarifies it, thank you. I was confused. Still, that does not increase the renter's capital, and puts them at a disadvantage, because as they lose capital, the landlord gains equity. That's where we were disconnected, but I see now how you were using the term.