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This occurs because the P&I on a fixed rate mortgage is constant while rent grows with inflation although most of the other expenses of ownership (property taxes, insurance, maintenance) also growth with inflation.

You don't think property taxes, insurance, maintenance are included in the rent I charge my tenants? Where do you get the idea that I'm somehow giving them a free ride on all of this? If anything, as those prices go up, the rent goes up more.

An issue we had some debate about was whether the principal part of the P&I payment should be considered a monthly expense, as it really is a form of savings. I think we finally agreed that it was really a measure of available household cash flow and the principal payment was really a form of forced savings as part of the monthly housing expense that would be recaptured in later it was kept categorized as a monthly expense.

And I'm curious if the tax benefits were included in this calculation? Because the renter is paying those taxes, but the landlord is reaping the benefit. I get depreciation, which gives me a break on profit, but the renter never sees that. I get an income tax deduction, which the renter doesn't. If my cash flow is negative, I get a credit which I can use to shield other income, but the renter doesn't get that either.

Appreciation in the property? I realize that when I sell the house. All the tenant sees is that rents in the area are going up, and he pays more. Meanwhile my mortgage stays the same, year after year. In fact, it usually goes down, because once my equity reaches 20% I can eliminate the P&I insurance, which is a benefit only to the bank, not to me.

When I started renting out my condo I got around $600/mo rent and I barely broke even, and probably some years I didn't even do that, at least if "cash flow" is all you look at. But all that time the renters were paying the mortgage, while I was reaping the appreciation. When I took my 30% deduction for mortgage interest expense and the other things, the benefits showed up not in the "rent" line but in my bank statement, because my income tax bill went down. Now I have no mortgage, and the renters send me a check for nearly $3000 every month. How is that possibly better for a renter?
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