"The next morning at 6:30 I'm at Lowe's, haggling over the price of carpet remnants."
June 15, 2009 4:13 PM Subscribe

The Accidental Slumlord. In 2005, Daniel McGinn, a writer for Newsweek, wrote a story about out-of-staters buying rental properties in Pocatello, Idaho. A year later, Daniel McGinn, who lives 2,450 miles away from Pocatello, bought a rental property there. Why?

I didn't expect to get rich; my main motivation was to have a good story for the book. By that measure, the deal was a success; when House Lust came out in 2008, the chapter in which I described my early misadventures as a property magnate (an early tenant went to jail; my first property manager made off with $1,300) helped fuel reviews and interviews. But now, long after the buzz over the book has died down, I'm stuck with a house in Idaho—and friends who call me a long-distance slumlord.

He goes to visit the duplex, seeing it in person for the first time. Previously in writer-and-real-estate-related schadenfreude.

posted by Halloween Jack (62 comments total) 4 users marked this as a favorite

The Accidental Slumlord.

I think he may be unclear on the meaning of "accidental."
posted by yoink at 4:23 PM on June 15, 2009 [13 favorites]

"In late 2006, after seeing only e-mailed photos, an appraisal and an inspection report, I paid $62,750 for a two-unit rental property in Pocatello"

I think I may have discovered how he accidentally became a slumlord.
posted by mr_crash_davis mark II: Jazz Odyssey at 4:28 PM on June 15, 2009 [7 favorites]

Mother Beese always told me: Anyone who calls you a long-distance slumlord isn't really your friend.
posted by Joe Beese at 4:30 PM on June 15, 2009

when's the movie of this fascinating book/article/dinner table anecdote due?
posted by johnny novak at 4:39 PM on June 15, 2009

I still hope to make money here, but I'm more aware that no matter how much I try to be the benevolent landlord, my profits are based partly on exploitation

Entirely on exploitation. Every landlord of rental SFHs should be liquidated -- the world would be a better place without these scumsuck social parasites driving up the cost of housing, a basic human need.

That the UK even had a bespoke term for this practice of the wealthy enslaving the poor -- "Buy to Let" -- chills my soul.
posted by @troy at 4:40 PM on June 15, 2009 [3 favorites]

Every landlord of rental SFHs should be liquidated

Woah, woah, woah - what's the alternative? Soviet-style apartment allocation? That didn't seem to work too much better.

Isn't there some sort of journalistic etical restriction about being the subject of the story on purpose? Ian brown writing about his mentally disabled son in the Globe and Mail is interesting, but he already had his son. This seems ethically suspect, not to mention a bad financial decision although one might say that he's making a profit on the deal even as he loses money on the house because he gets to keep writing for Newsweek.
posted by GuyZero at 4:44 PM on June 15, 2009

You've heard about the current real-estate boom. You've read about investors who are "flipping" properties in hot markets like Las Vegas or Miami. Maybe you've even participated in a dinner-party discussion of what's becoming America's most tiresome question: will the housing bubble burst or not?

It's amazing how glibly these confectionary sentiments of caution rolled off the tongue in 2005.
posted by KokuRyu at 4:45 PM on June 15, 2009 [1 favorite]

I think he may be unclear on the meaning of "accidental."

It's very modern American culture, that. Be happy he didn't call himself a victim-slash-hero.
posted by rokusan at 4:45 PM on June 15, 2009 [1 favorite]

Isn't there some sort of journalistic etical restriction about being the subject of the story on purpose?

Not only is there not an ethical restriction, there's an entire branch of journalism, Gonzo Journalism that seeks to do just that.
posted by willnot at 4:46 PM on June 15, 2009

I'm kind of going on the assumption that newsweek isn't going for gonzo journalism, but I guess I could be wrong.
posted by GuyZero at 4:52 PM on June 15, 2009 [1 favorite]

I continue to be amazed at the kind of editor who allows a writer to put this kind of shallow, worthless personal piece out there. It's clearly a disservice to the writer, and any editor worth a shit would know that going in and say no to such a stupid idea for the writer's own good. That so many editors not only approve but seem to encourage this kind of thing for the "you asshole" hits is really, really sad.
posted by mediareport at 4:56 PM on June 15, 2009

kind of shallow, worthless personal piece

kind of like some of the journalists i know.
posted by lester at 5:00 PM on June 15, 2009

Every landlord of rental SFHs should be liquidated -- the world would be a better place without these scumsuck social parasites driving up the cost of housing, a basic human need.

That the UK even had a bespoke term for this practice of the wealthy enslaving the poor -- "Buy to Let" -- chills my soul.

In the UK, there is far less land and far more density, meaning that a few wealthy people could buy up a bunch of SFHs and basically hold them in perpetuity, renting them out to people who would never be able to acquire a SFH themselves. In many parts of the US, we're having trouble giving SFHs away. And at $60k, a 30 year mortgage on such a property can be carried by someone making 25k/yr. We're not talking about a property owner who's acting like a feudal lord, monopolizing the housing market in order to force people to pay him to live anywhere.

I'm one of those people who does have sympathy for the idea that housing is like heat and electricity-- things that we pay for but nevertheless have the government create a set of rules that ensure we all of access to them... but in most of the USA, there are enough SFHs to go around. People who want to rent, for whatever reason, can rent one, but if they don't, there's pretty likely to be one available to buy. (certain metropolitan areas excepted)
posted by deanc at 5:01 PM on June 15, 2009 [2 favorites]

Woah, woah, woah - what's the alternative? Soviet-style apartment allocation? That didn't seem to work too much better.

I was talking about SFHs, property intended to be owner-occupied.

I don't have a problem with private enterprise putting up new apartment blocks to serving a more transient housing need, as long as their profits are relative to the actual capital expenditure of the improvements and not the total investment value of the property (land + improvements).

The funny thing WRT the communism was ~10 years ago in the midst of the first dotcom rent jack-up I experienced -- I didn't know there could be a third alternative between the present unjust status quo and the general bullshit of soclalism/communism; I just could vaguely feel something wasn't right in the state of denmark WRT housing costs here in the Bay Area.

There is a third alternative, but I don't want to go into it here any more. Lemme just hate on the landlords :)
posted by @troy at 5:02 PM on June 15, 2009

So this guy has a rental house that's not particularly expensive, does fine living in New Jersey, complains about barely making expenses when he's paying minimal on the mortgage and letting his $62,500 investment cost him far more (Think about that next time you think whether you're taking a loss on selling your house. Even if the price goes up, you almost certainly are losing out), and yet has very little to actually do with the house itself. He manages the place from across the country. Then it goes into how his tenant likes naked ladies and has four teeth, just to stomp in the idea that Idaho is a poor shithole with nothing but rednecks. He replaced the carpet when he didn't need to, so maybe he's got a shred of conscience. Or maybe that $213 investment made for a damn fine story. I'd wager the latter.

Fuck Daniel McGinn, and fuck the rest of the out of state landlords trying to make a quick buck on cheap real estate. $213 to pay off his guilt is pretty damned cheap, especially when it's worth plenty more than that for some feel-good reading material for the other long distance slumlords on the coast.
posted by Saydur at 5:04 PM on June 15, 2009 [5 favorites]

"Entirely on exploitation. Every landlord of rental SFHs should be liquidated -- the world would be a better place without these scumsuck social parasites driving up the cost of housing, a basic human need."

It's not a SFH, though, is it? It's an apartment...how do apartments function without being rentals?
posted by Bugbread at 5:08 PM on June 15, 2009

I was talking about SFHs, property intended to be owner-occupied.

Some neighborhoods have restrictive covenants against renting out houses. Some don't. Who are you to say that the property was intended to be occupied by the owner?

Some people who want to rent a place to live would like to rent a house, not an apartment. A house where they won't have to share walls with the neighbors and can hang out in their backyard or even have a garden if they like. Most of the people I know who rent live in houses, not apartments. They could rent an apartment if the wanted to, but they like living in a house.

What's wrong with renters having a choice between houses and apartments?
posted by yohko at 5:12 PM on June 15, 2009 [2 favorites]

I've never rented a house, but I've known quite a few folks who have, and greatly enjoyed it. Largely poor college students. It would be a shame if they were told "In order to stop oppressing you, we've decided that the only way you can stay in this house is to take out a decades-long mortgage and buy it. Oh, and we won't give you a mortgage, because you're college students with minimal income. So, I know you'd love to live here, but we just can't oppress you like that. Get out."
posted by Bugbread at 5:16 PM on June 15, 2009 [8 favorites]

Mother Beese always told me: Anyone who calls you a long-distance slumlord isn't really your friend.

Princess Buttercup always told me: Anyone who's a long-distance slumlord isn't really your friend.
posted by inigo2 at 5:18 PM on June 15, 2009

While the OMG Slumlord!! rage is fun, I'll be the bore and ask why anyone would "buy to let" (or rent, in the US) if not for profit? To sit on valuable property and just break even? Maybe as a tax write-off and lose some money?

Daniel McGinn is a dick because he's playing it off as if he had no idea he was a slumlord, but by being uninvolved in the actual running of his place and using this to sell books. But there are people who get involved with some amount of care for the place they buy and the people who live there. Here's my father's story:

My mother's dad invested in real estate in the 1980s, mostly rental units. My grandfather passed away, but my grandmother still gets money from these investment properties, and all the grandkids have gotten windfall from these investments over the years. Many of the folks who rent the places are long-term residents, partially because my grand parents weren't looking at maximizing profits by comparing rental rates with the rest of the local market. My father wanted the same for our family, and his future grand-kids.

He refinanced my family's home, and bought a few small units half an hour from where my parents lived. He would buy places that were run down and pay to fix them up. He would then refinance that place, once it had new floors and a fresh coat of paint, and he bought a few more. He didn't raise the rents much, but he was looking to make a profit on what he bought.

Things were going well, so he kept going, unfortunately relying on refinancing properties, before the bust. He ended up getting a few beautiful places in northern California, but he'd get up there to see the places, get them fixed up as he went. He got a few Christmas cards, and lots of thanks for getting places looking nice.

Then he bought a giant apartment complex in Texas. Texas, he said, had the best land value to rental rating ratio anywhere. We have family out there, so he and my mom flew out there to see family, and look at their potential purchases. Unfortunately, this one was better on paper than in reality. The 100% occupancy rate was because the current landlord wasn't charging everyone to keep living there. This was a slum. But my father, ever-hopeful, went ahead with it, trying to fix things up and make the place more livable.

But he stretched his finances too far, especially with this last one. Instead of charging unreasonable rental rates on the tenants, or letting the places fall to ruin, he sold them off and took a hit.

He wasn't in it for humanitarian good but for profit, though he didn't run these places to maximize his returns. There are landlords who are decent people and have the money to buy investment property. Then there are slum lords, who will charge less than competing places based on square footage, but they fill the gap of people who need to live places but are willing to live in sub-standard conditions (or don't have enough money to live in somewhere better). Screw you, Daniel McGinn, and your house bought on e-mailed photos, an appraisal and an inspection report (2,450 miles from his Massachusetts home, he notes). You're renting to people, and either hire someone to deal with the people in a humane way, or do it yourself.

And now I realize there wasn't much OMG Slumlord!! rage here, but a comment to single family residences... so my story is ranting against no one in particular, except Daniel McGinn.
posted by filthy light thief at 5:19 PM on June 15, 2009 [4 favorites]

Sometime you wish it was the 18th century still, you know? "The Accidental Slumlord, Or, The Story of a Clueless Douchebag's Profitable Exploitation of His Mild, Class-Based Guilt."
posted by Diablevert at 5:20 PM on June 15, 2009 [2 favorites]

the chapter in which I described my early misadventures as a property magnate (an early tenant went to jail; my first property manager made off with $1,300) helped fuel reviews and interviews.

This sounds like really weak, bad stuff. He thinks it's interesting --- and worthy of writing about --- that a tenant went to jail? What does that have to do with him? Yes, the poor go to jail. What a naive dumbfuck.
posted by jayder at 5:22 PM on June 15, 2009

"how do apartments function without being rentals?"

Co-ops.
posted by mikelieman at 5:22 PM on June 15, 2009 [1 favorite]

I glanced through the wikipedia article on housing co-ops, but it seems that you're paying money for "occupancy rights", but never gain ownership. Isn't that rent? I can understand how it would be a much cheaper rent, though, if that's what you were getting at.
posted by Bugbread at 5:26 PM on June 15, 2009

I was talking about SFHs, property intended to be owner-occupied.

That's the weirdest thing I ever heard. Why would people only want a house if they got a mortgage with it?
eg: my brother has three kids and desperately needs a yard. However there is no way he could afford the mortgage on a house he wants to keep for 30 years, and anyway he's probably going to live in at least two different countries in the next five years, so doesn't want to be stuck with one house somewhere. Fortunately, he is able to rent a house. Everyone (him and the owner) wins!
posted by jacalata at 6:01 PM on June 15, 2009 [2 favorites]

I prefer living in houses, or at least apartments converted from SFHs. I have no problem with landlords, or even landlords from away. But this guy is making himself out to be both an idiot, because oh somehow I've ended up being a landlord how did this happen? and a jackass because well he's a slumlord doing his best not to fix the fucking house.

And he's getting paid to write about his experiences.
what
posted by Lemurrhea at 6:12 PM on June 15, 2009

I grew up in a co-op apartment in DC. My parents owned their apartment -- technically shares in the building. Those shares came with proportional voting rights, and also proportional monthly fees. The fees paid for maintenance, gas, water, etc. with electricity and property taxes paid by the 'shareholders'. If you fell behind on the fees, eventually the rest of the shareholders would sell your apartment and send you a check for the remainder.

The co-op fee isn't really rent, and isn't priced like it. At the end I think my parents' fee was maybe %0.2 of the sale price.

It's more like a homeowner's association with a reason to exist (and wackier politics).
posted by blasdelf at 6:16 PM on June 15, 2009

Likewise, I hope Bill keeps on making minor repairs that are really my responsibility. And when these current tenants move out, I'll be relying on Ryan Olsen to find another set whose lack of savings, poor credit or crummy jobs prevent them from living someplace nicer.

$213 spent on new carpet may buy you out of some guilt, but sadly doesn't buy you out of being a flaming asshole.
posted by DarlingBri at 6:17 PM on June 15, 2009

In the UK, there is far less land and far more density...

In Melbourne, Australia (where you'd think space was plentiful), we have artificial scarcities of space defined by the Urban Growth Boundary. One of the supposed benefits of the UGB is a reduction in speculation, but in fact the UGB has been an urban speculator's best friend, keeping real-estate and rental prices in Melbourne artificially high even in the middle of a credit crunch.
posted by Ritchie at 6:23 PM on June 15, 2009

I was talking about SFHs, property intended to be owner-occupied.

That's really one of the strangest opinions that I've seen on Mefi. What the hell is wrong with renting a house? I grew up in a rented house, my parents couldn't afford to buy so we rented. Are everyone but homeowners supposed to live in apartment blocks?
posted by octothorpe at 6:28 PM on June 15, 2009

I have no problems with a person buying a house or two as an investment.

I have alot more problems with people and companies who gamed the real-estate and mortgage markets in order to further inflate the real-estate bubble, or to collect more fees from issuing sub-prime and ninja loans.
posted by Artful Codger at 6:39 PM on June 15, 2009

Hey officer, it's cool--I'm doing research for a book that I'm going to call "The Accidental Murdering Bank Robber".
posted by DU at 6:55 PM on June 15, 2009 [3 favorites]

A strange coincidence. I am a journalist with the Pocatello paper, the Idaho State Journal. And my wife and I are having a heckuva time finding a suitable home here.
posted by bigskyguy at 6:58 PM on June 15, 2009

At least in the coop my sister lives in, you own your place to the extent that they can assess residents for major repairs to the building, or common areas, and you pay for upgrades specific to your residence.

On the other hand, my parents bought houses to rent out, and set the rents to cover expenses, including loan payments, so the tenants did, essentially buy the properties for them. My parents also did maintenance and repairs , mostly by their own sweat until they got too old and feeble to do so. But their rents were always so low that renters, mostly farm workers, tended to stay forever. Since I took over management of the properties, I've spent thousands of dollars fixing stuff like termite damage , while keeping the rents low. Covering those expenses protects their investment, and will eventually provide them with income - which was the idea in the first place.

So, some of your hate us? Our renters don't. We've given a few of them the opportunity to save enough to save up to buy their own houses. The others may never have that opportunity, but it's since they have minimum wage jobs.

So, are we terrible people because we've seen this as an investment? Ask yourself if you'd buy something for your old age, when it wouldn't give something back.
posted by path at 6:59 PM on June 15, 2009 [3 favorites]

My dad was a landlord for a couple of years. He went in on shares on a house with my grandpa, spent the summer renovating it, and rented it out to first a girl I was in high school band with, and later a disabled lady who he ended up selling it to when he got tired of the landlord gig.

And also I am reminded of the $300/mo apartment I thought about leasing for two weeks before I took a look at it. If nothing else, I'm thankful now that I have the opportunity to live somewhere else.
posted by rubah at 7:01 PM on June 15, 2009

There will always be people who seek to make money when there appears to be an opportunity to do so - especially if it's perfectly legal. I don't have a problem with that, although I personally believe that one's investments should be ethical, too.

What I hate about the Daniel McGinn article, and this has - rather sadly - become a trend with journalists of late, is that What I'm doing was kind of stupid and wrong. But it's okay! Because I'm learning lessons and I get to write with a certain amount of false humility now attitude, which is totally self-serving and grotesque.
posted by Dee Xtrovert at 7:11 PM on June 15, 2009 [6 favorites]

He knows he's a slumlord, but he's okay with it, because fixing the carpets is a bad investment.

Okay then.
posted by Malor at 7:41 PM on June 15, 2009 [1 favorite]

Be happy he didn't call himself a victim-slash-hero.

Or an actor-singer.
posted by potsmokinghippieoverlord at 7:55 PM on June 15, 2009

I have a really, really hard time empathizing with this guy. But isn't he wonderful for lighting up an old man's eyes with his eventual presence? Aw.
posted by katillathehun at 8:03 PM on June 15, 2009 [1 favorite]

There could have been an interesting rumination there about social class, about economic realities, about the lives of people who live in houses like that...it grated on me that his conclusion was, "I still hope to make money on this..."

Also, "No matter how hard I try to be a benevolent landlord..." Any sign he's tried at all, beyond the carpet remnant? He's letting himself off the hook pretty easily there.
posted by not that girl at 8:25 PM on June 15, 2009

So, are we terrible people because we've seen this as an investment?

Definitely not. I think it's more a situation where if the percentage of rentiers exceeds a certain threshold, it causes real or perceived imbalances and obstacles in society. But the problem of defining the acceptable limits to rentierism is too difficult, let alone the problem of determining who gets to be a landlord and who doesn't, so the frustration manifests itself as hostility toward all landlords.
posted by Ritchie at 9:02 PM on June 15, 2009

That's really one of the strangest opinions that I've seen on Mefi. What the hell is wrong with renting a house? I grew up in a rented house, my parents couldn't afford to buy so we rented. Are everyone but homeowners supposed to live in apartment blocks?

. . .

Why would people only want a house if they got a mortgage with it?

Why did that dilipated duplex in bumbuck Idaho cost the current landlord $60,000+, when the physical dwelling itself isn't worth its recycling cost?

The premium is the land component of the price, which based on the going ground rent. People in that area of the world have sufficient income -- largely from the government's $800/mo SSA/SSI checks and no doubt Section 8 -- to pay $350 or so a month for housing, so rentable homes, being a good in fixed if not limited supply, have a capitalized value of $60,000 to $80,000 depending on how much the landlord is able to squeeze his tenants and how long his payoff horizon is.

This absentee landlord in NY did fuckall to create this value of these Idaho properties, yet he can swoop in like the great titled landlords of Ireland and profit from his ability to acquire the buy-to-let housing of this area.

In isolation this buy-to-let is just one act, but in the aggregate it reduces supply, pushing up land prices and keeping people who want to buy a decent place to live off the market and stuck as renters, paying down someone else's mortgage for life. As Churchill said almost exactly 100 years ago, land is the mother of all monopolies. It is quite a racket, and the world was a fairer and nicer place before I fully saw this present and longstanding systematic economic injustice.

Even in the immediate aftermath of the present boom-bang-crash, the reason houses still cost so much is that we have to buy the land use rights bundled with them, and the reason these land use rights are expensive is because included in them is the ability to fully^[1] pocket the future rental value of the property.

By eliminating the ability to profit from renting SFHs, SFH prices would fall such that their mortgages would more closely match area rental levels, and their would be much less of a barrier to home ownership.

I'll leave designing the mechanism that diverts the unearned increment from rental SFH away from the landlord as an exercise to the reader; but from what I can tell it exists, and actually works well wherever it's been implemented.

[1] modulo often token property taxes
posted by @troy at 9:13 PM on June 15, 2009 [1 favorite]

I think it's more a situation where if the percentage of rentiers exceeds a certain threshold, it causes real or perceived imbalances and obstacles in society

Back in the midst of the dotcom bubble (when I was first dealing with this personal landlord hostility issue of mine), the thought occurred to me that these fuckers would speculate in oxygen if it were as scarce a good as livable space.

But back then I didn't put 2+2 together. . . that both the atmosphere and the surface area of the South Bay where in fact the same class of thing, a form of wealth that is not created by human labor and thus is not properly considered capital, or at any rate shouldn't be *private* capital to be bought, sold, and profited from.
posted by @troy at 9:18 PM on June 15, 2009

So, could you explain to me what the "problem of determining who gets to be a landlord and who doesn't, so the frustration manifests itself as hostility toward all landlord"? is? It strikes me that the answer should be pretty simple - no votes need to be counted, no campaigning to be done. "Gets to be" sounds as though it's some sort of popularity contest.
posted by path at 9:30 PM on June 15, 2009

But within limits there are benefits to allowing some people to be landlords. Otherwise people in need of a place to live would either have to buy a house, with all the responsibility that entails, or live in a hotel.

Also, not everyone seeks to become a landlord. When your parents die, you might just end up with a surplus house.
posted by Ritchie at 9:30 PM on June 15, 2009

Every landlord of rental SFHs should be liquidated

I see I'm not the only one who reacted negatively to this. (I, too, have lived in a few rental houses, and I'm happy I did; they fill a perfectly morally acceptable niche between apartments, condos, and homeownership.)

I see what @troy was getting at, though; if people own-to-let to the extent that it makes it harder to buy a house if you want to, then I think this is a social ill (rent-seeking behavior in its most literal sense). And it makes sense for the government to set policy to avoid that situation. I don't think the answer is to eliminate rental SFHs, though.
posted by hattifattener at 9:33 PM on June 15, 2009

Whoops, I wrote that before I read @troy's most recent post.
posted by hattifattener at 9:35 PM on June 15, 2009

Well, as a landlord of six units across two buildings, with a SFH that god willing will be fixed up and rentable in a year or so, I guess I must take umbrage with @troy. My parents bought these properties with the goal of managing them well, making some money for themselves as well as providing decent homes for the tenants, and have succeeded in keeping drugs, gangs, and other assorted ills off of at least our own property. I don't know what the abstruse quasi-Georgism is all about. We are involved in this community and have seen good and bad landlords. There are plenty who are bad just because they don't know any better or don't try hard enough, and plenty who are bad because running a property into the ground no matter what happens to the neighborhood suits their need for tax write-offs.

I don't even think flipping in and of itself is an ill. It can in fact be a quite sensible division of labor between the type of owner who likes fixing things up and the type who would rather buy something ready to rent. The vast majority of landlords are in fact mom and pops who have one or two extra properties, much like my parents. But there are many different ways to skin the cat in terms of real estate investment tax advantages, some leaning toward cap gains, others toward passive losses, and many trying to play them off against each other. I don't think the tax structure really contributed to the bubble, though. I would like to see the write-off capability triggered only if a certain floor is passed in terms of improvements as a check on the "warehouse" landlords who can utterly destroy a block or a whole neighborhood with one single demolition-in-place.

But anyway. Good landlords, bad landlords. The guy writing this book clearly thought he was being a good one, but succeeded in being a bad one. The honorable thing to do is either get out or swallow your pride and start learning how to be better.
posted by dhartung at 10:33 PM on June 15, 2009

how can this guy be an exploitative asshole if he's not making any money at it?

i'm also not getting how one can bitch about a 365 a month rent - god, i wish someone would exploit me like that

i'm paying 440 - it's not a dump but it's not real nice either
posted by pyramid termite at 10:45 PM on June 15, 2009

on the other hand, i work with someone at the factory who has been buying cheap rental properties, fixing them up and either renting them or flipping them - the ONLY way mr mcginn is going to make any kind of money doing this sort of thing is by sweat equity - you buy a run down place cheap, you fix it up, using your skills as a carpenter, whatever, and you rent it out or sell it to someone for a profit

my friend's been making 10-20K a house on the ones he sells - the ones he rents, i'm not sure he's doing all that well on, but he's making some money

of course, the alternative is to let these houses sit and rot until they get condemned and the city tears them down to build something to make the middle class feel better about coming to town - even if it's only a lousy parking lot

mr mcginn isn't very savvy, but he's not an exploitative asshole - well, except for the part where he's making money writing about his problems

and this basically is a thing where city government needs to step up to the plate and ensure that rental stock isn't too disgustingly defective - but, i don't think his apartments seem all that slummy to me

but, of course, i'm a lot closer to his tenants' tax brackets than many people here, so maybe i'm just used to it
posted by pyramid termite at 10:58 PM on June 15, 2009

My husband and I once bought a fourplex. It was in relatively good shape. But the tenants, oh, the tenants. The most stable couple broke up - he moved out leaving unemployed her to scream at me.
In another apartment. the guys removed the window screens, then shot at flies on the walls with a BB gun. Naturally the BBs embedded in the walls. We figured that we simply were not cut out to deal with renters. We sold.
posted by Cranberry at 11:57 PM on June 15, 2009 [3 favorites]

So in an ideal world, your man's tenant would have paid the same rent and never gotten his carpet and linoleum changed but still, the author / landlord is an asshole? You people are making the author out to be Satan when he simply wants to make a reasonably safe investment that performs just above or at the market average. He was obviously seemingly poorly-informed going into this whole deal but this doesn't make him a bad person.

In an ideal world land would have zero acquisition cost for this tenant, the ground rent would be an annual tax liability, and the money the tenant could spend for housing would be equal to the fixed depreciation on the improvements (likely a premanufactured house) so the present shitty housing stock would have been bulldozed off a long time ago. In some versions of this ideal world ground rents below the area median could actual be converted into subsidies, to reward those who economize either by choice or necessity on their land use, in keeping with the Lockean Proviso.

In the real world, some schlub from NY electronically waltzed in with in $7000 capital and outbid his present tenants for this land in BFE Idaho, entitling said schlub to a nominal $2400 annual operating return, 34% cash-on-cash before maintenance expenses (the interest expense on this loan @ 5% is around $200/mo and will decline over time).

And as for safe investments, it is the aggregate of the upper classes buying up the very limited resource of LAND that I have a socioeconomic problem with. I've seen plenty of medical professionals redirect their guild rents into even more rent-seeking by investment into income properties. Makes it tough for the lower classes to get by in this world with all the wealthy people buying up all the fucking land, but then again if I had the means I'd probably be doing the same thing because real estate has been the historically proven way of becoming and remaining independently wealthy.
posted by @troy at 1:47 AM on June 16, 2009

What the hey! How did this dead hooker's body accidentally get in my truck!?
posted by PenDevil at 2:43 AM on June 16, 2009 [2 favorites]

20 years ago I rented a two bedroom house from a long-distance landlord. In the five years I lived there I only saw him twice. Rent was $300, with water and gas paid. The place had bad paint, leaking plumbing, a leaking roof, termites, a quirky A/C system, and occasional burglaries.

The neighborhood was sort of rough, and we moved because we wanted a better school for our young child. However, it was close to work, parks, and shopping. A bike path at the end of the street lead to 20 miles of trails.

Our arrangement was that I would fix things and deduct the cost from the rent. Over the years I learned about painting, plumbing, carpentry, sheetrock, roofing, security systems, masonry, floors, and electrical repairs. When I finally moved, I had saved up a down payment for the old house I bought, and I had the skills I needed to fix and improve my home. I was also glad that I had learned to fix things right, having fixed a lot of things wrong the first time, on someone else's property. I also learned that the crap you can buy at Home Depot is not appropriate for a place you intend to live in for a long time.

My rental house experience showed me that there is a lot that can go wrong with a place. It does not look like the kind of business to be in if you want a trouble free path to wealth.
posted by Midnight Skulker at 6:35 AM on June 16, 2009 [2 favorites]

I'm frequently hit with repair bills (a broken stove, a leaking underground water line) that send me into the red.

Good god, he never thought of this before? The whole idea of "income property" sounds lovely in perfect conditions, but how often are you going to have those? I have never wanted to be the person who gets called at 3 a.m. about an overflowing toilet. Hopefully, this will serve as a cautionary tale to other twits who have never given this a thought and fantasize that being a landlord is all about easy money.

Also, you just know that this guy, if he himself lived in a place like this, would be calling the landlord-tenant complaint hotline, talking to a lawyer, documenting expenses for time and materials, and withholding rent. But he's just fine with Bill taking on this burden that is rightfully his.

But the thing that bothers me most about this piece is the invasion of privacy. Sure, these people must have given McGinn permission to write about them, but how could they possibly have imagined being described with such contempt? Just another tax on poverty, I guess. Ugh, this is really horrid.
posted by littlecatfeet at 6:40 AM on June 16, 2009

You people are making the author out to be Satan when he simply wants to make a reasonably safe investment that performs just above or at the market average. He was obviously seemingly poorly-informed going into this whole deal but this doesn't make him a bad person.

It's not the fact that he bought the house that makes him come off like a douchebag, to me. It's that he finally shows up to check out what he bought, and he's like "These tenants of mine who are paying $360 a month are poor! Poor people are icky! The house is beat up to begin with and they're kind of messing up worse! That guy has no teeth! Ew!" That he didn't think this through as well as he could have doesn't make him a horrible person. It's that when confronted with the realities of the situation, his reaction is distaste and a burning desire to dump the whole problem. He has some sympathy towards his tenants, and he admits to some guilt over the whole thing ---- and if I was an acquaintance of his and we were sitting in a bar and he was telling me this story, then I'd probably have a lot more sympathy for him. But instead I read about it in Newsweek, where his judgmental discomfort towards his tenants has become a useful little contribution towards the weekly word count quota, and, in his view, a fascinating, unexplored, revelatory angle on the national housing crisis. Fucking wanker.
posted by Diablevert at 6:48 AM on June 16, 2009 [2 favorites]

Sometimes it only makes sense to rent. For instance, run your numbers through a rent vs own calculator (1, 2, 3 - the first have a few different variables, the 3rd is really basic). Owning your own home doesn't always make sense, financially.

In regards to urban growth boundaries and the sort, they exist in most, if not all, US states, too. The issue isn't simply speculation on property creating leap-frog development (cheaper land is farther away, so I'll develop this land even farther out, for less money!), but also infrastructure development. If you want the amenities of the City, you have to live near the City. Otherwise, instead of a sewer system, you have your own septic system. And instead of municipal water, you have your own well to take care of. These systems need ample land (an acre minimum is required in this part of California).
posted by filthy light thief at 7:21 AM on June 16, 2009 [1 favorite]

I looked up SFH on Wikipedia. oops.

What does the acronym stand for? Single Family House, I presume?
posted by shemko at 10:18 AM on June 16, 2009

Single Family Home, you presume correctly. (And I fixed Wikipedia. That's a tertiary meaning at best.)
posted by dhartung at 11:34 AM on June 16, 2009

@troy, I live in CA, and would guess that less than 10% of the people I know who invest in real estate are beating inflation. If you add in the cost of their often inefficient labor, it's even less. Those inflated real estate prices you are complaining about are also affecting landlords. The only ones I know who do make real money never buy a house unless the rent can cover all of the expenses and leave a profit. They don't buy rental properties in the expectation of making capital gains, because rental properties are depreciating as they are run down from poor maintenance, or so much is spent on maintenance that they lose money every month on the property. And yet, so few of them can do the appropriate analysis of how much money they are losing. Like compulsive gamblers, they only remember the houses that pay out when sold at the top of the bubble, and forget all the ones they took a bath on.

Metafilter: I fixed Wikipedia
posted by BrotherCaine at 10:02 PM on June 16, 2009

I used to be a landlord, with a 2 family home. In theory, if I had invested the capital I used to buy the house elsewhere, I'd have made more money, but in reality, a 2 family house meant we could start owning our home. I took the risk, made the repairs, took the equity loss when the economy soured, profited when I eventually sold the building. It's capitalism. People with capital get to make more of it. I was a pretty good landlord; kept rents lower than market rates, didn't hassle tenants, but not speedy on repairs/updates. Urgent repairs, of course, were prompt. I got kind of screwed by several tenants. A home can be damaged a lot, and you won't know till they move. I'm offended by crappy landlords as well as by crappy tenants.

Why are single-family homes more inclined towards ownership than apartments or condos or 3 family homes? Condo developers often retain condo management, and charge lots of money for services that could be had much more affordably. Single family homes on quarter acre lots are an American standard, but aren't energy efficient at all. Aggregate living, in condos, apartments, attached dwellings, etc., is much more environmentally friendly, and you can argue that they create a social good.

The article is matter-of-fact, but has a tang of whininess. Accidental, indeed.
posted by theora55 at 7:00 AM on June 17, 2009

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