Every year they have more equity they can just cash out and walk away. Worst case, they lose the property and their credit gets ruined, exactly the same thing that happens to any renters that have to break their lease.
Landlords lose an investment, Renters lose a home and their kids might have to change schools, etc...
offset by property taxes? Maintenance? Inflation eroding the value of the equity. Time/cost of managing the property. Potentially depreciating property values, depending on area?
I've been a landlord. It's a money sink. Tenants brought in cats (against the lease) that peed all over, making the residence smell unbearable. Had to completely rip out carpet, reseal the floors to get the smell out. Ripped out stair case railings.
It's far from "little risk". It was a time and money sink.
The area itself did not appreciate in value. So after all said and done, definitely lost money.
I'm glad to be done.
I didn't "walk away" like the renters could. I fixed the house, the damage that the renters caused, I assumed the very liabilities that the renters get to punt on. Their leverage in the deal worked in their favor that time. They get to just move on.
Did it break you? Did it damage your family? "After all is said and done", you lost money. You walked away.
How is any of that different then a renter where the landlord sells the home, raises the rent (they can do that every year or so), refuses to fix something (or takes forever to find the "best" price), or just starts doing some other crazy stuff? The risk seems pretty similar to me.
That's very difficult and unlikely to happen under US law. They probably have a corporate entity that will just cease to exist along with any debt. If they don't, bankruptcy or old debt will only impact their credit for afew years.
No different and probably more easily explained then an eviction. Try renting anywhere with an eviction. The risk is largely the same.
> If they don't, bankruptcy or old debt will only impact their credit for a few years.
The idea that you think someone could lose large amounts of money and not have it impact them personally or that there isn't personal fallout perplexes me. This feels like that episode of Seinfeld..
Kramer: It's a write off for them.
Jerry: How is it a write off?
Kramer: They just write it off.
Jerry: Write it off of what?
Kramer: They just write it off!
Jerry: You don't even know what a write off is, do you?
Are we talking business, or personal? Yes, it hurts; but the ability to mitigate that risk is there for any responsible landlord. The landlord has all the consideration about what type of property to invest in, how to structure their payments, how to increase rent or continue renting at old prices, etc.. The tenant has no ability once they move into a place.
All my experience is in the midwest, where there are essentially no renter protections.
