All Forum Posts by: John Kunick

Quote from @Nathan Gesner:

It's interesting to look at the differences between the red, blue, and purple states. This article from Realtor.com in 2016 points out eight of the largest differences: https://www.realtor.com/news/trends/red-vs-blue-states-polit...

Regardless of political affiliation, the simple truth is that more government involvement almost always results in more problems for ordinary people. Regulating rent rates creates less inventory and higher prices. Forcing solar and wind creates higher electricity costs and rolling blackouts.

The vast majority of landlords are doing the right thing. Creating laws for the few bad actors and applying them to the majority will only create more problems.

Nathan, thank you for pointing out the sheer hypocrisy of the advocates and bureaucrats..  The advocates say they are for helping the poor and downtrodden, but their policies actually hurt those very people.  And, government bureaucrats go along with it either out of sheer stupidity and ignorance or, far more concerning, out of ulterior motives.  But, as I've tried to point out multiple times on similar forums, where is the accountability to the advocates and bureaucrats when the poor and downtrodden's situation only gets worse due to these policies?  The negative results are always predictable as is the lack of accountability.

Quote from @Saad D.:

Thanks Mike. For me personally, we have tired to keep rent increases to a minimum to reduce turnover and that led to having lower NOI unfortunately due to two things:
1. Higher PITI across the board (most of my investments are in Philly)

2. Higher maintenance and repair costs (even low to no skill workers demand 35-40% higher labor)

This has led us to diversify our strategy and convert some of our units into MTR's instead of LTRs to increase margin. That has worked so far but it's hard to say how long that will last. 

I totally agree and will say that I communicate proactively with my tenants and provide examples of the increasing costs of property taxes, insurance and repair costs (labor and materials).
My theme to them is "we must raise rents to keep pace with rising costs, but we are doing the minimum increase as we want to retain you our valuable tenant".. To that end, the one factor that kills long-term profitability is turnover so even if we raise rents less or equal to our cost increases, that still benefits us in the long-term even if in the short-term our NOI might dip a little. Almost all of our tenants have been with us 5+ years.
Also, and some may disagree with this, but we went into a "get to zero debt" strategy a few years back so we had less exposure to potential interest rate hikes.  Am now, looking back, so glad we did that..

@Daniel M., thank you for offering a logical and reasonable pro/con based on your thoughts about "rent control" without the distracted agenda of tax benefits.  Especially appreciate your take on tenants vs. landlords since it sounds like you are both.

First, I want to say I totally understand and sympathize with tenants.  I get it.  I've had tenants for many years/decades and I do everything I can to not raise rents or minimize raising rents as many of my tenants have become like family.  However, that is my choice based on what I want to do not based on what politicians tell me I have to do or can not do.

Second, from a landlord standpoint, there must be incentives to invest in expanding the housing supply and maintain them.  Artificial limits that aren't based in reality have the negative unintended consequences that end up doing the opposite of what the "advocates" and politicians claim will happen.

Third, and this has been the crux of the whole issue for me, let's just look at real examples of what has happened when "rent control" (which can take many forms not just the threat of using tax breaks) measures have been implemented.  I understand the pros/cons of what people speculate will happen  but why not look at ACTUAL results of when they've been tried in the past???  

Therefore, I will post here what appears to be a fairly neutral article on "rent control".  Please read it.  BTW, I could post many more that are much harder hitting and include people that are not of my same political persuasion who  warn these advocates and politicians to not continue to go down the rent control path as the evidence is overwhelming that they only hurt the very people they claim to help.
https://www.forbes.com/sites/brendarichardson/2023/03/23/nat...

Quote from @Ryan Moyer:

Quote from @John Kunick:

Quote from @Ryan Moyer:

Quote from @John Kunick:

Quote from @Jeff G.:

Quote from @Andrew B.:

It only applies to those who own more than 50 units, so if thats you I get why you're not happy, but I do believe this is a good thing for Americans. The cost of housing has exploded. 

I'm sure someone will chime in and say "that's going against capitalism and the free market," but I'll remind you tax benefits are not part of the free market. The whole intention behind a tax benefit is to encourage you to do something. If the rental market is extremely profitable, you dont need more incentives to buy rentals, you were going to do it regardless. 

 Nope, I don't have 50 units. I expect to grow to that size eventually, but that day is not today. I'm with you on the tax incentive argument: I'm very much a flat tax guy.

It's not that rent control is "against the free market" that bothers me. That happens to be true, but the real problem is that it introduces artificial inefficiencies in the market that end up severely harming the people that it's allegedly supposed to help.

Wherever there is rent control there is severe market dysfunction. I have yet to see a counterexample.

https://www.foxnews.com/opinion/bidens-rent-control-plan-onl...

What continues to amaze me is how dense people are when they are not willing to look at historical examples of what happens when bureaucrats and politicians intervene and therefore artificially change market dynamics.  How in the heck can anyone say "I do believe this is a good thing for Americans"?  This is similar thing that happened when the eviction moratorium was implemented and we had landlords claiming it was a "good thing".  Well, it ended up being a bad thing and ultimately ruled unconstitutional.

 But the tax breaks that would go away here were already bureaucrats and politicians intervening and artificially changing market dynamics.  If you're not in favor of politicians interfering with market dynamics, you should already want those tax breaks gone anyway.

Ryan, where in my post did I mention tax breaks?  Nowhere..  So, why is your response wrongly focused on that topic?  Did you read the article I linked?  If you did you would have gotten a much better perspective on this whole topic..  I really don't care to be distracted by your tax break straw dog - although I could debate how bad our tax policies are generally as I favor a flat tax and therefore eliminating all tax breaks.  I would however appreciate hearing about how you think rent controls, and other political stunts that politicians use to pander to the lower class, actually help or hurt those very people.

Huh?  This whole thread is about tax breaks.  I'm starting to think maybe you didn't actually read the white house statement that this thread is about.

The white house is asking congress to remove tax breaks that were perks for real estate investors that raise rent too aggressively.  Those tax breaks existing in the first place are examples of politicians intervening to artificially change market dynamics, by stimulating investors to buy those properties more aggressively than they would in a free market.  So if your stance is that politicians should not intervene to artificially change market dynamics, then by that definition you should be in favor of them removing or (in this case) limiting the tax breaks that artificially changed market dynamics.

This thread and white house statement isn't about making anything illegal.  It's about taking away or reducing artificial perks (tax breaks) that were created to intervene and artificially change market dynamics in the first place. 

Ryan, no, this thread has been specifically about rent control and whether or not it helps create affordable housing or hurts the very people that the politicians claim it will help.  You and Andrew have tried to turn it into something it was not - whether that was your intention or not. I ask you to go to the top and read the first several posts and specifically my first couple of responses..  In mine there was not one single mention of tax breaks.  Yet, you specifically responded directly to my post (which had nothing in it about tax breaks) and then answered about tax breaks.  This is the title of this thread: Proposed Rent Increase Limit of 5%/Yr Nationally?!

Quote from @Ryan Moyer:

Quote from @John Kunick:

Quote from @Jeff G.:

Quote from @Andrew B.:

It only applies to those who own more than 50 units, so if thats you I get why you're not happy, but I do believe this is a good thing for Americans. The cost of housing has exploded. 

I'm sure someone will chime in and say "that's going against capitalism and the free market," but I'll remind you tax benefits are not part of the free market. The whole intention behind a tax benefit is to encourage you to do something. If the rental market is extremely profitable, you dont need more incentives to buy rentals, you were going to do it regardless. 

 Nope, I don't have 50 units. I expect to grow to that size eventually, but that day is not today. I'm with you on the tax incentive argument: I'm very much a flat tax guy.

It's not that rent control is "against the free market" that bothers me. That happens to be true, but the real problem is that it introduces artificial inefficiencies in the market that end up severely harming the people that it's allegedly supposed to help.

Wherever there is rent control there is severe market dysfunction. I have yet to see a counterexample.

https://www.foxnews.com/opinion/bidens-rent-control-plan-onl...

What continues to amaze me is how dense people are when they are not willing to look at historical examples of what happens when bureaucrats and politicians intervene and therefore artificially change market dynamics.  How in the heck can anyone say "I do believe this is a good thing for Americans"?  This is similar thing that happened when the eviction moratorium was implemented and we had landlords claiming it was a "good thing".  Well, it ended up being a bad thing and ultimately ruled unconstitutional.

 But the tax breaks that would go away here were already bureaucrats and politicians intervening and artificially changing market dynamics.  If you're not in favor of politicians interfering with market dynamics, you should already want those tax breaks gone anyway.

Ryan, where in my post did I mention tax breaks?  Nowhere..  So, why is your response wrongly focused on that topic?  Did you read the article I linked?  If you did you would have gotten a much better perspective on this whole topic..  I really don't care to be distracted by your tax break straw dog - although I could debate how bad our tax policies are generally as I favor a flat tax and therefore eliminating all tax breaks.  I would however appreciate hearing about how you think rent controls, and other political stunts that politicians use to pander to the lower class, actually help or hurt those very people.

Quote from @Andrew B.:

Quote from @John Kunick:

Quote from @Andrew B.:

Quote from @John Kunick:

Quote from @Jeff G.:

I will send you a private connection request.  Let's take this off the public side.  I think you have totally misunderstood the ideas behind my comments.  This is not a wild comparison unless you ignore history.  More than willing to have a civil private conversation where I think I can explain exactly why rent control (which is really only used for political rhetoric) is a bad idea as is almost all government attempts to "control" what landlords do (including the eviction moratorium)..

 You're more than welcome to explain your thoughts here. Its a public forum, so discussing it in public makes the most sense since the topic of this post is the same as what you're discussing.

Ok, I'm going to try to make this simple and respond directly to your first comment.  I could care less about the "tax break" angle as that is your distraction.  I simply take issue with you saying "..I do believe this is a good thing for Americans. The cost of housing has exploded."

First, why do you think rent control is good for Americans and how do you think it will address the issue of exploding housing costs?  Second, we have many historical examples of politicians (at federal, state and local levels) trying to implement rent controls.  Are you aware of these?  If so, can you please tell us if they've ever actually helped the people they claimed to help?  Or, are they just political pandering and actually hurt those people?  How do the "sheep" of these politicians simply enable this cycle and therefore continue to create false hope that anything other than the market will actually help solve the issues?

Despite your claims that the eviction moratorium is a wild comparison and you struggling to believe I think it is correct, I implore you that I do think it is correct - and I never once mentioned anything about the tax benefits.  You are the one that brought that distraction into play.

When the EM was implemented, I saw many, perhaps like you, that thought it was a great idea and was going to help the poor and downtrodden.  I was amazed that people could come to that conclusion as history tells us the exact opposite would happen. I find these people to be ignorant as in the root word "ignore" as they ignore historical examples.  I also stated back then that I thought the EM would be found to be a violation of property rights and contract law and perhaps be found to be unconstitutional.  Ironically, the bleeding hearts attacked me as cruel and mean when what I was saying is it will be cruel and mean ultimately to these very people..  But, bleeding hearts don't seem concerned about actual results only on patting themselves on the back for their good intentions - despite the devastation they ultimately cause.

Andrew, I don't know how old you are..  I'm in my 60's and have been in the rental market a long time.  I've seen these ideas come and go and have historical perspective of how these ideas only make matters worse.  But, you don't have to be my age to study the negative effects of rent control, eviction moratoriums, forced section 8, etc..  You only have to be moderately curious and be willing to study where these policies have led in the past.

Quote from @Andrew B.:

Quote from @John Kunick:

Quote from @Jeff G.:

I will send you a private connection request.  Let's take this off the public side.  I think you have totally misunderstood the ideas behind my comments.  This is not a wild comparison unless you ignore history.  More than willing to have a civil private conversation where I think I can explain exactly why rent control (which is really only used for political rhetoric) is a bad idea as is almost all government attempts to "control" what landlords do (including the eviction moratorium)..

Quote from @Jeff G.:

Quote from @Andrew B.:

It only applies to those who own more than 50 units, so if thats you I get why you're not happy, but I do believe this is a good thing for Americans. The cost of housing has exploded. 

I'm sure someone will chime in and say "that's going against capitalism and the free market," but I'll remind you tax benefits are not part of the free market. The whole intention behind a tax benefit is to encourage you to do something. If the rental market is extremely profitable, you dont need more incentives to buy rentals, you were going to do it regardless. 

 Nope, I don't have 50 units. I expect to grow to that size eventually, but that day is not today. I'm with you on the tax incentive argument: I'm very much a flat tax guy.

It's not that rent control is "against the free market" that bothers me. That happens to be true, but the real problem is that it introduces artificial inefficiencies in the market that end up severely harming the people that it's allegedly supposed to help.

Wherever there is rent control there is severe market dysfunction. I have yet to see a counterexample.

https://www.foxnews.com/opinion/bidens-rent-control-plan-onl...

What continues to amaze me is how dense people are when they are not willing to look at historical examples of what happens when bureaucrats and politicians intervene and therefore artificially change market dynamics.  How in the heck can anyone say "I do believe this is a good thing for Americans"?  This is similar thing that happened when the eviction moratorium was implemented and we had landlords claiming it was a "good thing".  Well, it ended up being a bad thing and ultimately ruled unconstitutional.

History shows us the actual opposite of what he and others claim will

happen will actually take place. Instead, there will be unintended

consequences that will negatively impact the very people they claim to

be for.  Like others have said, this is an attempt to get votes..

Our current president is supposedly floating a policy idea of rent control to no more than 5% annually.  History shows us the actual opposite of what he and others claim will happen will actually take place.  Instead, there will be unintended  consequences that will negatively impact the very people they claim to be for.  I was one, during eviction moratorium, that said it was unconstitutional and a violation of property rights and contract law.  I also said it would end up being a big mess and ultimately would hurt the very people they claimed it would benefit. I had many on Bigger Pockets that initially thought I was off base, cruel and heartless..  Well, history shows what happened both in terms of marginal tenants ultimately getting hurt (as did many landlords) and the Supreme Court ruling the Eviction Moratorium as unconstitutional.
I see the whole idea of rent control, which is just another form of government invasion for political hopes, being bad for everyone.  Thoughts?