You miss the point. The market will bear up to where they can’t make the payments. If you take prop 13 out, all the landlords will be being hit with the same increase . All will be seeking the same rent increases. Essentially just greater rent inflation. Perhaps the market won’t bear and the renters will downgrade the properties they rent. Or landlords on higher end properties will go wanting and lower their rent.
If that occurs, landlords will stop upgrading.
Net result, lower grade rentals for the same or higher rent.
Frankly your post on this topic smell of sour grapes. You reach conclusions based off a question that landlords don’t answer because it’s a minor factor and largely irrelevant.
Would we try and buy it from our sibling for the tax advantage? Frankly, I suspect most of us would like to but also realize that the deal is also potentially too problematic to complete. Sure if the sibling has a realistic market rate view of its worth, the purchase isn’t going to create a boatload of other baggage, and the property is one we would look to buy if it was on the general market. Then the 3/4s of 1% savings on taxes makes a nicer cash flow. Around here, it may be the difference of cash flow or even covering the mortgage if you have to buy a sibling out. Frankly avoiding a 8% transaction cost of having liquidate the house is even more attractive. Perhaps is unfair they don’t have to sell /sarcasm.
Given the same type house, on the same type lot, in the same neighborhood, same deferred maintenance etc, the house with a tax advantage is desirable over the regular tax house which is more desirable over the houe with mello Roos. All that said, most investors here will buy any of those given they will reliably rent, to reliable tenant, and provide cash flow. Higher taxes and mello Roos makes it harder to have it sit empty to upgrade or wait to get a “good” tenant.
