Tuesday, February 03, 2009
Thinking of renting a house you cannot sell?
Do you have a house you cannot sell that you are thinking of renting out instead? You are not alone. The supply of property available to let has soared, and that is finally resulting in downward pressure on rent. That will be another bad shock to people who need (or want) to monetize real estate, but it is economic stimulus in the hands of people who are "short" housing or who just want to renegotiate with their landlord. First the price of gasoline collapsed, then food prices went down. Now rents may follow. Presumably, the combined effect of all three trends amounts to a massive "stimulus" (or "tax cut," depending on your taste) in the hands of people in the bottom half of the income distribution. The question, I suppose, is whether it is adequate in the aggregate to make up for the increase in unemployment.
3 Comments:
By 
Purple Avenger, at
Tue Feb 03, 06:01:00 PM:
Renting a house is a good way to put 10 years worth of wear and tear on it in 1 year.
At one point I had 20 rental units and have gotten that down to 8 to get rid of now. Being a residential landlord is something you wish on your worst enemy.
By 
, at
Wed Feb 04, 05:48:00 AM:
Haven't unloaded that house on Shady Brook, eh, TH?
JLW III
Word Verification = deman
By Brian, at
Wed Feb 04, 09:51:00 AM:
Interesting point on the stimulus effects for the bottom half.
A tax-revenue-neutral stimulus would be to get rid of the mortgage tax deduction and then lower taxes on the poor. Might make sense from a free market perspective of ending governmental biasing of the market for ownership and against renting.
I might be buying soon though, so this cuts against my personal interest.
