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Someone owns the rental unit and charges a markup, right?
hmm good point
the willingness to pay to own the unit you live in should be higher than the willingness to pay to rent the unit you live in, is the logic i was operating off of
Renters are also paying for the service of the landlord handling all the financial and maintenance BS, plus the flexibility of a shorter term deal.
I think you're actually right. Landlords and owner-occupiers both compete as buyers in the purchase market for homes. So even though owner-occupiers are willing to pay more to own than to rent, they set the marginal price of the home in the purchase market, so they set the price landlords have to pay. Landlords then have to charge a premium on top of their cost of ownership to cover their opportunity cost, financial management, taking on the depreciation risk, etc.
Why? I'd expect owning > renting as the default state of affairs