Are Landlords Greedy?
November 1, 2001
To some people anyone who demands that his or her business makes a profit is greedy. To others greed is the excessive accumulation of wealth. But “excessive accumulation” could mean only that someone else has a couple of dollars more than they do.
To an even greater number of people landlords are in a special class, with no right to make a profit at all. Thus any landlord who makes even enough to pay the mortgage and the taxes is overcharging.
A recent study found that tenants believe initial rents to be 10 to 15 percent too high, so rent increases are “price gouging,” and thus that landlords who charge market rents are greedy
Landlords do not rent properties out of the goodness of their hearts, they do it to make a profit. In fact, they are more likely to do a good job if they come out ahead financially.
If landlords are greedy, they’re not doing a very good job of it. The Census Bureau found that only 58 percent of multifamily properties made a profit or broke even. About 27 percent had a loss, and for 16 percent the owners did not know whether they made or lost money (not a good sign). The fact that just over half of landlords made a profit or broke even doesn’t say too much for landlords being greedy.
Fact is, the “greed” of landlords is what keeps many of those who denounce greed working. Greed pays the taxes that support the government that provides the handouts for the poor and the jobs for the bureaucrats and politicians who would and do restrict landlords’ property and civil rights.
Taxes are just the beginning. Let’s look at how much landlords contribute to the economy of this country.
The Property Owners and Managers Survey conducted by the US Census Bureau in 1995 found that there were about 25 million rental property owners or partnerships in the United States.
It also found that over 70 percent of the owners spent at least $1,000 per year maintaining their rental properties. Over half of that 70 percent spent more, and the ones who spent more than $1,000 make up for those who spent less. So conservatively, rental property owners pump at least $25 billion into the economy just taking care of their properties. That’s $2,854,000 a day from rental property owners going to companies that provide goods and services, who employ people and who pay taxes. And remember, that figure is in addition to the interest on mortgages and the taxes of various kinds.
That’s the kind of greed we can use more of.