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To: rb22982

The fact that there is inflation (as there has always been since the Fed was created) does not force anyone to raise the cost of a good or a service, or justify major price hikes in all cases.

If you own an apartment building and your primary expense is a fixed-rate mortgage, the fact that gasoline and food prices are going through the roof does not have a major or immediate impact on your operation. You may want to make more (who doesn’t) but a 9.5% increase in rental rates in one year cannot be justified by inflation alone.


20 posted on 06/15/2021 8:09:49 AM PDT by PTBAA
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To: PTBAA

That is incorrect - 1) Many of my costs will go up in that scenario - property taxes, property insurance and maintenance are all subject to inflation 2) the value of my property is higher now and I have to consider selling it at the higher value vs maintaining rent or increasing my cash flow. If the value goes up and the cash flow does not (or goes down with my input costs higher), I’m going to sell it, which is going to take rental stock out of the equation and lower housing values. 3) The point of capitalism for both the buyer (renter) and seller (landlord) is not to stay at the same point, but to constantly find the best equilibrium for themselves. If someone can get a higher rent, why should the landlord not charge it? Similarly, if the renter can find a cheaper place to live, they can absolutely take advantage of that and move!


21 posted on 06/15/2021 1:32:10 PM PDT by rb22982 ( )
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