Landlords provide accessibility and mobility to flats.
Recently the discussions have heated up between two sides concerning rent control and 3D. Rather than constructive discussions we are seeing a lot of cursing and complaining from both sides. I would like to try and calm down the hatred between the 2 with this post.
First and foremost let me state my interest. I'm both a landlord and a tenant. I lease out flats for investment and rent commercial properties for business, there's also a mixture of commercial and residential properties in my investment. Compared to Dr. I'm only a tiny fraction of his enterprise. So I'm still trying to make a living myself. I agree to SSD but oppose to BSD and DSD. Because SSD deters a lot of unqualified individuals to make a quick buck who may adversely affect the market (I do admire their 勇氣 however) . I oppose to rent control in today's economy but if there's a feasible and cost effective way to rule out 租霸 and unreasonable landlords I will support it (this probably only happens in an utopian society) .
Anyway, I want to discuss the role of landlords in an economy like Hong Kong. Instead of brandishing them as 奸商, I would like to in their defence present their contributions to the economy. Here's an over simplified calculation:
Let's say one city's government has land. And there's only 1 property developer, who has $100. The cost of building each flat is $100. It takes 1 year to build flats any number of flats. The rental of flats is $10 per year initially. This means in the first year the developer can build 1 flat and rent it out to 1 tenant. And it will be 10 years until the develop collects enough rent to build the 2nd flat. Another 10 years to build 2 more (total 4) flats. This is already been 20 years.
Now let's say there are investors in this economy. Who has $120 each. And let's for argument sake ignore supply and demand for a moment and pretend they line up to buy property year by year and prices stay the same. That means in the first year. The developer will build a flat and will to sell to investor A, for $120 because he can gain $20 immediately. So in the second year, the developer builds another flat and sells it for $120 again. In 5 years the developer should have $200 and can build 2 flats at a time. In 10 years 4 flats, and in the same 20 years 16 flats each year. That means in the same 20 years there will be hundreds of flats instead of 4.
This calculation is obviously exaggerated and over simplified. But the logic is intact. I'm not proclaiming that landlords are doing the community a service and are 大仁大義. But they are providing utility, accessibility and mobility to the economy.
I would also like to speak for the tenants side. I have to rent commercial properties for business. I'm extremely fortunate that my landlords are very kind to me. By all means they do not charge me any less than other tenants, maybe at most 10-20% Sometimes? Over the years my rental has increased on average 10% annually and I do have difficulties maintaining the business. But 食得鹹魚抵得渴. If I'm going to succeed in business then I have to find ways to overcome these difficulties. I am fortunate that i have been able to do it in the past and still remain confident to do so in the future. At the very least my landlords have not vacated me for lucrative rents. And I have been a good tenant to them for many contracts. Sometimes I have no choice but to increase rental more than I wish to but that's the way it goes.
I have also heard many stories of bad landlords, some claims are believable but some are without merits. In my experience most landlords are negotiable and some are very stubborn. I'm also very fortunate that my landlords opens the door to negotiate with me.
In any groups of people, landlords, tenants, employees, employers, young, old, men or women. There ought to be ethetical and unethetical individuals. We do not need to brandish a certain group to be one or another. These are all isolated cases. I hope to see productive discussions in the forum and learn from all brothers and sisters here. Please take this post into consideration whenever we post anything in the future. Thank you very much.
