Recently, Beijing has introduced a new policy for housing rental enterprises, called “Notice on regulating the business activities of housing rental enterprises in the city”. This policy is most likely formulated for the frequent mine-breaking incidents of long term rental apartments.
Let’s first decipher how real estate agents in the long-lease apartment model cater to the psychology of various players in the market, cheating three families with their empty hands and thus expanding in a predatory manner.
First of all, for the landlord, the agent goes to sign a contract with him at a rent 10%-40% higher than the market price to seize the property, and the transaction cycle between them and the landlord is monthly. When someone collects the rent for him and rents the room at a higher price, the landlord naturally accepts it gladly.
Secondly, for the tenant, the agent to below the market price of 10%-40% of the rent to seize the source of customers. But the condition is to pay a one-Time rent of one year or even three years. Nothing more than to pay a few months to take advantage of such a great bargain, the tenant is naturally also eyebrows and smiles.
So the question is: Who will do this high buy low sell money-losing deal? By the way, if homeowners and tenants early to see that this is not in line with the laws of economics do not give scammers market will not have the next trouble. The seemingly money-losing business is a series of operations by the agent, it has become more than a profitable and explosive industry.
The learning lies in the fact that the rent collected by the agent is a year, and to the homeowner is a month. This time difference allows the agent to accumulate a large amount of cash value. Let’s use an analogy: for example, a long term rental apartment collects 36,000 yuan of rent from a tenant for a year at a monthly rent of 3,000 yuan, and pays the landlord at a monthly rent of 4,000 yuan. Then after paying the first month’s rent, the agent has $32,000 left in his hand. You may ask: “So, didn’t he lose money by the time he paid the first year?” This question can be answered like this: If the agent does nothing and just pays the rent monthly this is what happens in the end.
But if he expands quickly before the year is up, for example, with the 32,000 left in his hand, he can find 8 more landlords and rent to 8 more tenants at a low price. Then the agent will accumulate another 8 32000 …… so that the agent uses Zhang San’s money to pay Li Si’s rent and Wang Wu’s money to pay Zhang San’s rent. Tear down the east wall to mend the west wall will not have to worry about not being able to pay back for the time being. A tenant behind the fission out of the geometric growth of 8 tenants quickly build up a huge pool of money. And these funds are very difficult to regulate.
The agent can use it to continue to expand the market, loan sharking, reinvestment, etc.. Of course if the agent can really make money grow by means of reinvestment will also make this play continue. The problem is how can one find highly profitable and effective investment methods in such a chaotic market where all industries are unregulated under the CCP? One P2P in and you could lose all your money. Of course there is a more effortless approach tried and true is to run away after the money circle almost.
So there are many tenants who have just paid for a year without living for a few days to be evicted after being told by the landlord that they have not received the rent. People who choose to rent are not very generous with their money. Taking out a year’s or even 3 years’ rent has already moved them, which makes tenants regret their gullibility and regretfulness. If the above example at least the tenant lost their own money and did not go into debt, then what happened next is even more horrible.
In order to expand the range of tenants, agents have expanded their attention to people who have just graduated or have a very short work experience. This demographic happens to be a huge customer base for agents with rental needs. But they can now be said to be stupid money is not much, can not afford to pay a year rent how? So the agents dug in their heels and came up with the “deposit one pay one” policy. The agents try to get the tenants to sign a contract with a financial institution in the form of a “rental loan”. The agent then signs another contract with the tenant, and the five horses pour six sheep to the financial institutions to give the tenant the loan in their own pocket.
In this way, the agent still receives a year or even three years of rent, but the money is not from the tenant, but from the financial institution. The agent is supposed to pay the rent to the tenant every month according to the contract, and the tenant is supposed to pay the rent to the financial institution every month according to the contract. This way the financial institution is overjoyed due to the high interest it can receive, and the tenant is happy to live in the house at low rent. I have to admit that the scammer is really painstaking, the original landlord and tenant of this simple transaction relationship has become so complicated. The landlord, the tenant and the financial institution all “have their own way”.
But the three happy families have a very important condition is that the agent has to pay monthly rent to the landlord to continue the rental relationship. What happened next is as mentioned before: the leverage of the agent got higher and higher, and finally when it was about to break, it skipped out on its feet. The landlord has to evict the tenant if he can’t collect the money, and the tenant has to continue to pay the financial institution rent every month or be blacklisted if he can’t live in the house.
That the tenant can not live in the house does not return the money to the financial institution, the financial institution is also a chicken feather. So these three victims of the wicker circle battle to fight the ugly …… long term rental apartment of the side scam effect is far more than that. As the initial high price of grabbing housing also led to an insane rise in housing prices, now after the capital leverage break 99 cm of the bubble faded only 1 cm of beer left. When the initial investment in property people are also suffering …… a time when homeowners cut off water and electricity, tenants homeless, financial institutions blacklisted, the real estate market is depressed …… crying out, smoke and mirrors.
So where did government regulation go in this situation? In accordance with the economic laws of socialist characteristics this kind of empty glove profiteering market if there is no official lords of the red draw stand, long rent apartment before the circle of money was beaten to death. Since you can cheat to finally run away with the umbrella support is unspoken. Then after earning a lot of money the official lord also has to symbolically wash the ground.
We go back to the beginning of the article Beijing issued a “notice on the regulation of the city’s housing rental enterprises operating activities”. Article 4 of which “housing rental enterprises to the tenant the amount of rent collected in advance in principle shall not exceed three months rent, the collection and payment of rent cycle should match.”
What do you mean in principle? Under what circumstances do we act in accordance with the principles? Under what circumstances can we not act according to the principle? What if we don’t act in accordance with the principle? Not to put words to death, always leave a vent is one of the important means for the officials to get rich, various areas of policy gaps can be drilled out of a bunch of Gold bars out.
Article 5 says “housing rental enterprises to the tenant to collect the deposit should be through the Beijing Real Estate Intermediary Association established a special account escrow, the amount of the deposit collected shall not exceed one month’s rent.” Oops! A private organization like a trade association, a non-profit organization, is now making a profit. This long-lease apartments can be more and more, and stored a larger pool of money. Long-term rental apartments such as small real estate agents for the industry association of this social agency to take over the nest.
Article 7 “banking financial institutions, microfinance companies and other institutions shall not apply to the tenant ‘rent loan’ funds allocated to housing rental enterprises.” Note that this article only says who it can’t be issued to, but it also doesn’t say who it can be issued to. I understand: then the industry association and the tenant himself may be eligible to receive the tenant’s loan funds! We’ll see how this turns out. This is a socialist regulatory feature: stealing the fraudulent techniques of the crooks and having a big agent closer to the officials instead of a small one is the solution.
I recently saw a way to cut leeks: it says that the location of the leek should be 3 cm up from the roots, if the cut ground cut easy not to grow, too up to cut also does not work, easy to lose the momentum of growth. Water the leeks after cutting, but not immediately, wait a few days before watering. To wait until the leeks deeply experience the pain before watering, of course the person who cuts the leeks and the person who waters them is the same person. To let the leeks fully appreciate the rain of the people who cut the leeks …… cutting leeks can not be too frequent, otherwise the roots will die. Nor can the interval be too long, otherwise the leeks are spoiled easy to produce a rebellious heart. So it is best to cut once every two months or so, as long as the leeks are well managed they will grow better and stronger than one crop after another. You see how this method of cutting leeks is in line with the general law of social development of the Chinese Communist Party!
Lastly, I would like to advise our toiling masses: In this era of evil paths, where there is no way out of the right path, and where even death row prisoners have to pay $1.50 to eat a gun since the establishment of the Chinese Communist Party, it is impossible for things to fall from the sky. The more beautiful the story is, the more there is a sharp scythe hidden behind. So we must polish our eyes, rather than miss than have a fault. Otherwise it is likely that the lighter the blood, the heavier the debt.
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