Rental income

“ Real property, particularly in a city, comes to have a recognized value, which is relatively stable and easily ascertained. It also comes to have a recognized rental value-the measure of compensation commonly asked and paid for its occupancy and use-the amount being fixed with due regard to what is just and reasonable between landlord and tenant in view of the value of the property and the outlay which the owner must make for taxes and other current charges. ”

“ But our hopes of becoming the fortunate occupants of any one of those charming abodes were soon dashed to the ground; for with the cards came the terms; and we found that a "very moderate rental" meant from $600 to $750 per annum. We looked at each other rather ruefully; and the ungenerous remark of "I told you so" rose to my lips. However, I did not give it utterance, but substituted the words, "Never mind, let us send for another 'Times,' and only answer those advertisements which state plainly the rent required." ”

“ Today, in the West, favored by cheap land—$25 to $30 an acre—I am giving $1.30 as rental for every $1.00 I receive as tenant. Here it still is possible for a man to start single handed and win a farm, but the crops remain about the same, the prices are slowly bettering, the cost of the bare necessities of living is lowering, the price of land is rapidly advancing, the rental is going up, and my wages as a tenant are becoming relatively less. ”

“ The rent for which the owner can lease it, emerges simply as a consequence of the existing state of wages and prices. High rent, says the economist, does not make big prices: it merely follows as a consequence or result of them. Dear bread is not caused by the high rents paid by [64] tenant farmers for the land: the train of cause and effect runs in the contrary direction. And the selling price of land is merely a consequence of its rental value, a simple case of capitalization of annual return into a present sum. ”

“ At every successive point in this interval of time, less of the burden will rest on the consumer, and more of it on the landlord; and, in the ultimate result, the minimum of profits will be reached with a smaller capital and population and a lower rental than if the course of things had not been disturbed by the imposition of the tax. ”

“ The loss by cropping, of this value, is the just basis of rent, which leaves no proportion of purchase title to the tenant during one or a few seasons who does not manure or repair fences. The tenant who does this, and thus reproduces the original value, justly enters into proprietorship, and his rentals ought to be regarded as instalments of purchase-money. There lies the practical difference.
It is necessary to face the facts, and to avoid confusion by abstract terminology. There is just rent, and there is unjust rent, or the legal abuse of the rental system. ”

“ The sordid subject came up again for discussion when Phyllis and I went to have a preliminary chat with the house-agent.
"You have spoken with eloquence and conviction about reception-rooms, out-houses, railway stations, golf courses, and h. and c.," said I, "but sooner or later some one must rise and say a few pointed words about Rent."
"That all depends on what you are prepared to give," he replied. "The rough-and-ready rule is to fix one's rent at a tenth of one's income."
"Yes, but which income?" I asked. "For I have two incomes and I can't afford a separate house for each." ”

“ On the whole, the actual landlord is by no means the monster he is popularly represented to be. He will wait rather than change a good tenant. He will make no fuss if the back rent is paid ever so slowly. To many respectable folk, keeping the home together on perhaps 22s. a week, this is an inestimable boon. It is wonderful how, among these steady people, rent is made a first charge on income, though naturally, given enough pressure, rent must wait while such income as there is goes to buy food. ”

“ Landlords have not raised their rents in proportion. My own estate in 1843 had 116 tenants, in 1880 it had 105 tenants on 5,760 statute acres. The difference in the rent paid in 1880 over that paid in 1843 is L270, barely six percent on the whole rental, which is almost 16 percent over valuation. Over L2,000 was forgiven in the bad years after potato famine, and over L1,000 has been lost by nonpaying tenants, and a considerable sum has been expended in improvements without charging the tenant interest; in some cases the cost has been divided between landlord and tenant. ”

“ The net rental is the gross rental after deducting from that rent tithe rent-charge, the average percentage for expenses in respect of bad debts, any rates paid by the landlord, and any like outgoings. The gross rental of an estate is the gross rent of all the holdings on the estate, payable in the year ending in November, 1885. Where a judicial rent has been fixed, it is the judicial rent; where no judicial rent has been fixed, it is the rent to be determined in the manner provided by the Bill. ”

“ Fair rental value rather than a compensatory return upon full value of the market facilities is the standard by which the City's schedule of rates is to be judged. To determine fair rental value the going rates of rental for similar facilities in the community are significant, as are the rentals prospective tenants are willing to pay. ”

“ Under the name of rent, many payments are commonly included, which are not a remuneration for the original powers of the land itself, but for capital expended on it. The additional rent which land yields in consequence of this outlay of capital, should, in the opinion of some writers, be regarded as profit, not rent. But before this can be admitted, a distinction must be made. The annual payment by a tenant almost always includes a consideration for the use of the buildings on the farm; not only barns, stables, and other outhouses, but a house to live in, not to speak of fences and the like. ”

“ In many parts of this country, perhaps in most, but particularly in the Western States and in the neighborhood of flourishing towns, these two methods of rating the pecuniary magnitude of real estate will habitually not coincide. Due allowance, often very considerable, being made, the capitalised rental value of the land may be taken as measuring its current serviceability as an item of material equipment ”

“ In common speech we speak of rent only when owner and user are distinct persons. But in the economic sense there is also rent where the same person is both owner and user. Where owner and user are thus the same person, whatever part of his income he might obtain by letting the land to another is rent, while the return for his labour and capital is that part of his income which they would yield him did he hire the land instead of working it. ”

“ But apart from the fact that the size of the area which yields urban land rents is exceedingly small, local rates are a perpetual charge upon land rents. The point is that, as the renter of fixed property is rated according to his rental, the size of the rental he is able to pay is in part determined by the amount of the rates. The higher the rates, the less rent he can afford, and therefore the less can the landowner obtain for the use of his land. ”

“ Of course, the fabulous rents asked for mere boxes and barns of accommodation in good centres is one great reason for the non-letting of houses, as also the prevailing preference for “flats,”—but the “care-takers” have their share in the obstruction, and so have the house-agents. So, also, has the system of demanding “premiums”—a system which is positively nefarious. Recently a friend of mine was asked two thousand guineas premium for a house whose rental was £180 per annum. He was a big, broad-shouldered American, and took matters coolly. ”

“ It would not be difficult to show that they are not in conflict, but rather in harmony, with the theory of rent in making such a provision; for the tenants have sunk capital in the cultivation of land, which they cannot withdraw and offer for sale in the best market.
Again, the theory of rent assumes that tenants cultivate with a single eye to the sale of the produce in the market; for it is only by starting with the conditions determining the selling-price that we arrive at the establishment of differential advantages enjoyed by different producers, and the consequent existence of rent. ”

“ The ratio of very low-income renter households in the State paying more than 50 percent of income on rent relative to the aggregate number of very low-income renter households paying more than 50 percent of income on rent in all the States. ”

“ It is assumed that, if wages or profits fell below the points, which, on a comparison of the advantages and drawbacks, pecuniary and other, of farming and other occupations, are considered to be normal in the farming industry, some labourers and farmers would seek some more advantageous employment, and that, if they rose above, some fresh competitors would enter the ranks of agriculture. It is assumed that landlord and tenant are actuated by competitive considerations alone, the one trying to obtain the highest and the other the lowest rent. ”

“ Their returns are certain for, mark you, every tradesman pays his rent every Monday morning, there is no delay. If it be not paid the hour it is due, the landlord is empowered by law to send a bailiff to the house, to keep him there at an expense to the tenant of three shillings per day—and to request him, at the end of five days, to sell off the goods and chattels provided the demand is still unsatisfied. I know no better investment for capital, be it large or small, than that of which I speak. There are no taxes, no ground-rents, and the tenant is bound to keep his premises in repair. ”

“ Higher rents may conceivably be offered than would arise from a single regard to the productive powers of the land and the income accruing from the sale of its produce. The second occupation may be of primary importance; and, even if it is subsidiary, as in the case of the crofters, a sudden failure or unexpected disaster in their fishing ventures may render them not merely unwilling, but unable, to pay a rent, which was fixed with the prospect of securing some part of their income from this subsidiary source. ”

“ The tenant has no claim to the return of the rent in improvements on his ground or his house; and I order the repairs at Barmouth as part of the Company’s general action, not as return of the rent to the tenant. The reader will thus see that our so-called ‘rents’ are in fact taxes laid on the tenants for the advancement of the work of the Company. And all so-called rents are, in like manner, taxes laid on the labourer for the advancement of the work of his landlord. If that work be beneficial, on the whole, to the estate, and of all who live on it, the rents are on a right footing ”

“ If the payment of tithe were abolished to-morrow, can any sane man believe that the tenant-farmer would be allowed to put the tithe into his pocket or to keep it there? Can any sane man believe that rents would not rise exactly in proportion to the amount of charges from which the tenant was relieved? Rent is nothing more than the money payment supposed to represent the just return which the owner claims from the occupier for105 the privilege of cultivating his land. The occupier makes his account and calculates how much he can gain by the compact. The landlord’s share is his rent. ”

“ Some land is situated nearer, and some at a greater distance from, the market where the produce is sold. The farmers of the most distant land, if their produce is needed to meet the demand, must secure such a price as to cover their expenses of production, including the cost of carriage. The farmers of the nearer land, obtaining the same price for what costs less to convey to the market, have a surplus in hand, which competition for the enjoyment of their advantages compels them to transfer to the landlords as rent. ”

“ Property taxes on rental property will reduce the expected future earnings from the property to the extent that it is expected that the taxes cannot be passed on to tenants in the form of higher rent. ”

“ If I buy land for a small price and hold it until I can sell it for a large price, I have become rich, not by wages for my labour or by interest upon my capital, but by the increase of rent. Rent, in short, is the share in the wealth produced which the exclusive right to the use of natural resources gives to the owner. Wherever any land has an exchange value there is rent in the economic meaning of the term. Wherever land having a value is used, either by owner or hirer, there is rent actual; wherever it is not used, but still has a value, there is rent potential. ”

“ If the landlord makes the improvement—which he prefers doing, on the new system—he requires the tenant to pay at the rate of four to six per cent. in the form of rent—a clear gain to the landlord, who can borrow money on much lower terms, and can hardly invest his capital so profitably or so safely elsewhere. ”

“ If more than this is paid, it is practically impossible to avoid debt when any unforeseen contingency arises. One thrifty German woman used 30 per cent of the small family income for rent, in order to have more bedrooms than most tenement-house dwellers can afford. ”

“ While gross rents are fixed by competition, the question arises how do bidders determine what they can pay? The basis differs radically between business property which earns income for the occupant as well as the owner, and residence property, which for the occupant consumes income only. ”

“ A farmer, in making his present contract for rent, does not concern himself with the past history of the causes of the fertility or situation of the land, but with its present advantages, and he makes no attempt to draw the distinction between the earned and the unearned. And, in the future, he and his landlord may allow the nominal rent to remain unaltered in spite of increased prosperity or intensified depression in agriculture, in consideration simply of lessened expenditure or added liberality in the matter of improvements. ”