Costs in Landlording

Property management headaches typically go down at the high end because there’s more $ per unit, and the things that break tend to be per unit/person. You also have more $ to fix things and can do it “right”.

This is from a comment on Hacker News by user asah.  It’s a small thing, but I thought it was a useful insight into the whole dynamic of owning rental properties (which I do not, but several people I know do, and given the San Francisco real estate market is generally a possibility whenever we do move out of the current house).  Just to expand it a tiny bit, asah is saying that costs for maintenance (or, specifically, the “something broke” kind of maintenance, rather than the “I should renovate” kind of maintenance) tend to scale per person or per unit.  So if you have four units that you rent for $500 per month each, versus one unit that you rent for $2,000 per month, you have both lower monetary costs and much lower hassle for the 1 unit situation, and thus higher net profit (along a couple of axes).

This has at least some possible policy implications in terms of housing.


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