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this post was submitted on 09 Jun 2024
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Costs rising more than 3% a year. Since it's California I'd imagine the insurance is going up much faster than 3% of total ownership costs. If small landlords cannot stay in the black because they can't afford the insurance with capped rent increases they will sell to the entities that can afford to self-insure. Corporations like BlackRock
After reading a comment by another poster I don’t think these are “small” landlords, at least not mega-corporate buyers, but the kind that serial buy properties leveraging the assets to buy more. So not someone that bought an investment or two but someone buying as many as they can get away with. Maybe the bigger fish are doing it too… but anyway, they don’t have the profit margin on the rates they took the loans that are now rising. They probably didn’t do fixed rates, as you wouldn’t as a non-homeowner. So rates went from 3% to what…8%? Margin is eaten up along with inflation, labor costs, materials, etc.
Screw ‘em. They just want to make the renter eat it so they can profit, I have zero sympathy and I hope they go bankrupt.
Blackrock and other REIT's should be abolished. Using single family homes as an investment vehicle is what got us into this, we need to regulate the bad actors out of the marketplace.
everything is an investment if you're stupid enough or the supply is pathetic enough.
The running costs are not only insurance costs. The insurance "crisis" e.g. entirely predictable results of climate change affects everyone and why would the tenants have to foot the increased risk of damage to their landlords property?
Finally i doubt that it will just be swept up by actors like Blackrock. If the profit is limited due to the law, then the value of the property will reduce until equilibrium at which point each solvent market actor has equal opportunities. Because of the 10 Million property values now at 6 Million, the insurance rate will react accordingly.