The capital pool risk of long-term rental apartments is the evil result of the rapid financialization of the industry, which directly affects the healthy development of the industry in the future. There is an urgent need to effectively manage the capital pool of long-term rental apartments. The key to management is how to solve the problem of “rent loan”.

Recently, there was news from Shanghai’s long-term public rental market that the old apartment operator was suspected of experiencing a capital flow crisis and was sent a public letter by Shanghai Huarui bank to inquire about the safety of the loan. Tens of thousands of tenants who paid the deposit and carried the installment loan are in danger of being taken back and even on the credit blacklist, while the demands of tenants such as returning the rent and exempting the rent loan have not been officially responded.

This is only one of the long-term rental apartment explosion phenomena so far. The degree of explosion damage of long-term rental apartment is no less than that of P2P online loan platform.

Due to the long-term loss of business and the corruption caused by internal management loopholes, coupled with the dismissed employees competing for customers and spreading adverse public opinion, the company ran and finally broke the capital chain, resulting in the explosion of Dingjia, and thousands of tenants, landlords and consumer financial institutions behind it fell into disputes. In April 2018, Shanghai AI apartment was forced to sell its equity due to the break of cash flow, and was finally acquired by Zhongyuan family for 120 million.

In fact, these thunderstorms are the result of the risk exposure of the capital pool of long-term rental apartments. The blind financialization of long-term rental apartments has turned the original leasing enterprises into standard financial enterprises, and the resulting capital pool contains huge risks. The actual rent has become a stable expectation. The generated loan funds are transferred to the company’s name through the platform project, and the actual controller can be used for various purposes. This risk is like a balloon, which will eventually explode, just a matter of time.

The author believes that the risk of long-term rental apartment fund pool must not repeat the mistake of sharing bicycles. The risk of long-term rental apartment fund pool is the evil result of the rapid financialization of the industry, which will directly affect the healthy development of the industry in the future. We urgently need to effectively manage the long-term rental apartment fund pool. The key to management is how to solve the problem of “rent loan”.

“Rent loan” is popular, “That is, the long-term rental apartment platform takes the stability of the tenant’s rent as the chip, obtains the loan from the third-party loan platform, and then uses the loan to carry out investment activities to earn high profits, and the tenant becomes the lender, and the tenant’s rent becomes to repay the loan. Once there is a problem in the investment behavior of the long-term rental apartment platform, the resulting problems are consistent, and the loan platform, the tenant and the homeowner will be involved.

“Rent loan” comes from the inconsistency between capital goal and reality. The goal of capital is to obtain income quickly. The nature of capital is to pursue profit, which means reducing all possible costs, including time cost. Rapid capital return is the favorite thing of capital, and the speed and amount of capital return determine the enthusiasm of capital, and the enthusiasm of capital also determines how long the invested enterprise can live.

As a result, the original long-term rental apartment has become a capital speculation and gambling arena. The reality of renting apartments for a long time is that the return period is long and the time cost is large. The landlord rents the house on the long-term rental apartment platform, and the tenant also pays the rent on the platform, which means that the real source of cash is the continuous and stable rental income of the tenant. The resulting time lag makes it very difficult for the long-term rental apartment company to make money. They can only profit from the price difference, that is, the difference between the rent and the cost of taking the house. If the cost of taking the house is too low, the house will be lost, and if the rent is too high, the tenant will be lost, The narrow profit space and the long return cycle make it difficult for the traditional long-term rental apartment industry to meet the capital requirements.

As the saying goes, “hit the snake and hit the seven inches”, the management of long-term rental apartments focuses on dealing with “rent loans”, and the key to the supervision of “rent loans” is how to control capital.

As the saying goes, “capitalists are not afraid to go to jail or kill their heads for money”, capital can make an industry become fanatical or irrational. We can see what capital brings to long-term rental apartments. Excessive “formaldehyde” threatens the personal safety of many tenants, and makes freedom become the target of public criticism, which makes people wonder whether there is still a “conscience” in long-term rental apartments; More importantly, capital has put many fanatics on the road of breaking the law and committing crimes. According to the previous “risk tips on regulating the business format of” long rent apartments “involving Internet finance”, many of these long rent apartment service providers and their executives are suspected of various illegal acts such as job occupation, misappropriation of funds and fraud. The contracts signed between long rent apartment service providers and lending institutions involve illegal appropriation of other people’s property.

I think we can reasonably adjust the originator of capital pool risk - “rent loan”. Since the stability of rent is a natural high-quality investment product, we can realize securitization through fine management and scientific and standardized means, break away from the third-party online loan institutions and become a standardized securities product, Alternatively, the implicit creditor’s right and debt relationship formed underground can be explained in detail through the bond management mechanism when writing the contract. Under the condition of ensuring the information symmetry of both parties, it can become a legal creditor’s right and debt relationship, so that everything can be exposed to the sun, and then a perfect information disclosure mechanism can be established to urge the fund applicator to use the funds for rational investment and obtain income in a legal and compliant manner, It is believed that this way can not only meet the current demand for capital transfusion in the field of long-term rental apartments, but also control the fanatical capital like a flood.

It is worth mentioning that the risk of capital pool has been exposed in bike sharing, which is also a big failure in bike sharing. The capital pool of long-term rental apartments must be strictly controlled to avoid repeating the mistake of sharing bicycles. In particular, long-term apartment rental is related to the survival of most young people, and it should not be careless.

(introduction of the author: famous young economist and famous financial commentator)

Terra is a blockchain network created using cosmos SDK and is committed to creating stable coins. The largest algorithmic stable currency on terra chain is UST, while Luna is the original POS pledge token of Terra chain. The price of Luna will directly affect the security of the chain, which means that the higher the price of Luna, the higher the economic value that can be safely carried in Terra chain.

As an algorithmic stable currency, ust maintains its peg to the US dollar through a set of coinage and destruction mechanism on the chain. That is, in theory, these mechanisms should ensure that traders can always exchange ust worth $1 for Luna worth $1. Luna has a floating price, which is designed to serve as a “shock absorber” for the fluctuation of ust price.

Anchor is a fixed rate savings agreement set up by Terra team. It provides users with stable currency savings products and pays interest to depositors, with an annual interest rate of 20%. Anchor’s total locked in value (TVL) has fallen by $11 billion over the past two days. Just a week ago, TVL peaked at $17 billion.

Since its launch, Luna’s reputation has been polarized. As Luna has made ust the third largest stable currency in the market value of encryption market under the condition of close to zero mortgage, Luna is accompanied by the questioning voice of “stepping on the air” and “Ponzi scheme”, while its supporters call themselves “lunatics” and are extremely optimistic about it.

Blue whale previously reported that the stable currency is no longer stable, the first algorithm stable currency ust is decoupled from the US dollar, and Luna plummeted by more than 56%. Due to the continuous fluctuation of the cryptocurrency market recently, according to coinmarketcap, the market value of Luna is lower than the market value of UST, hanging upside down, the holder flees from the spread of emotion, and death stampedes on the market. On May 10, Qian’an suspended the withdrawal of Luna and ust due to the accumulation of transactions, and then resumed in the afternoon.

Luna foundation guard (LFG) is a non-profit organization focusing on the development of Terra ecosystem. It is also the second largest enterprise holder of bitcoin in the world. In the terra crisis, LFG issued a loan of US $1.5 billion (US $750 million for BTC and US $750 million for UST) and announced the rapid deployment of 28205 bitcoins to defend the anchored exchange rate by purchasing ust and providing liquidity on the exchange, but it did not support it for a long time. Bitcoin also fell. On May 10, bitcoin fell below the $30000 mark, with the lowest quotation of $29735, hitting a 10 month low.

Today, Terra founder do Kwon voiced that I know the past 72 hours have been very difficult for all of you - knowing that I am determined to spend this crisis with each of you, we will build our own way out.

Do Kwon said that in order to make the system absorb ust faster, Terra will approve the community’s proposal to increase basepool from US $50 million to US $100 million special drawing rights and reduce the pool recovery block from 36 to 18. This will increase the mint capacity of ust from US $293 million to US $1.2 billion. This will increase the coinage capacity from $293 million to $120 million.

At the same time, on the Luna section of social platform reddit, the post on psychological rescue has been placed at the top: “for everyone who is panicked, here are some national help line numbers.” And “for those considering suicide, this is my attempted suicide story.”