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There is one problem with renting as normally configured, and it is that the interests of the renter and owner are not aligned with respect to maintenance of the property. In fact, the incentives are such that both parties believe spending money on improving the property is giving it away to the other party.

So, a system of incentives needs to be set up which aligns the interests of both the renter and the owner, so that it is in the interest of both of them to improve the property.

I know many people whose main motivation for wanting to own is "to be able to modify their home".

The brainless should not be in banking. — Willem Buitler

by Migeru (migeru at eurotrib dot com) on Fri May 22nd, 2009 at 12:13:02 PM EST
[ Parent ]
That is in some part because the law as currently configured fucks the renter and favours the owner. If rental contracts were binding as long as you kept paying rent, and as long as you were capable of leaving the property in a state no worse than you came to it, and rents could not be raised faster than inflation, then many of those perverse incentive structures would go away.

Of course, that would also expose the owner to a number of structural risks. But people who can afford to buy to let are better placed to carry those risks than people who are renting from them.

- Jake

If you only spend 20 minutes of the rest of your life on economics, go spend them here.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Fri May 22nd, 2009 at 12:27:09 PM EST
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