4 ms·

I guess I am confused why they would not want to collect the money from renting the buildings out. Any ideas?

largote 10y ago
A lot of these cities have renting laws that basically give the renter more rights over the property than the owner. This causes it to make more sense to not rent it out.
- hanoz 10y ago
  > A lot of these cities have renting laws that basically give the renter more rights over the property than the owner. Situated as it is, in Britain, London is a long way from being such a city. More's the pity.
sparklesunshine 10y ago
I believe they keep them empty so they can visit at any time. They are their holiday homes. Some investors buy flats and keep them empty and in bubble wrap for a couple of years until prices increase, then sell. Not "buy-to-let" investors, but "buy-to-sell"!
ddalex 10y ago
They don't care. When you have billions in the personal bank accounts, the few tens of thousands you would collect per month from a luxury house in London means nothing. It would be more of a nuisance - the tenants need registering, then you have to pay taxes, for what gain?
- randyrand 10y ago
  A $5 million home rents for roughly $20k a month, or $240k a year.
  - ddalex 10y ago
    Probably the owner of said home makes more money than that in his/her sleep.
    - rahimnathwani 10y ago
      Passive income on capital assets (e.g. letting out property) is exactly how they make that money.
- GreaterFool 10y ago
  You hardly have to do anything. Various agencies will do everything for you. You'll never hear about your tenants.
  - pjlegato 10y ago
    The point is, why would they bother even with the minute hassle of vetting and hiring an agency just to make a few pennies every year as compared to their existing billions? It's not even worth their time to do that much, apparently, since the houses in question are sitting empty in a high-rent area.
randyrand 10y ago
Eviction can be very difficult (1 year +) when it comes time to sell. Also, it's risk. They can fuck up the place, and if their rent is not much, then the insurance will be more than the rent.
- rahimnathwani 10y ago
  That's not the case in London. The notice you need to give a tenant is specified by the lease agreement (general an Assured Shorthold Tenancy). It's usually specified as 6 months minimum, after which either tenant or landlord can give 1 month (or sometimes 2) months to end the lease. If the tenant refuses to move out (despite the landlord serving notice correctly) you can usually get that resolved in 2-3 months at most: 1 month to get a court date, 1 month to give the tenant time to comply with what the court orders, and 1 month to get a bailiff to physically remove them (if it comes to that). (Source: I'm from London, and I've signed several leases as both a landlord and as a tenant. I've once gone to court to evict a tenant who had stopped paying rent, and the matter was resolved in <2 months from first filling in the court paperwork)
natrius 10y ago
In any city with a high price-to-rent ratio, rent isn't really a factor in prices. Investors are buying homes in those places because it's really hard to make more of them, just like gold and high-end art. The price is determined by what other rich people will pay for them to hold as a speculative asset, just like gold and art. Collecting rent is possible, but it makes an illiquid asset even less liquid: many home buyers want to live in the home they buy, which is hard when there's an active lease. This does not happen in cities where it's easy to build more homes in desirable areas. They have lower price-to-rent ratios because prices are determined by the value of the rental income stream. We can make it easy to build more homes in every city by repealing laws that push lower income families out of desirable places—that's what density restrictions were invented to do.

A lot of these cities have renting laws that basically give the renter more rights over the property than the owner. This causes it to make more sense to not rent it out.

hanoz 10y ago
> A lot of these cities have renting laws that basically give the renter more rights over the property than the owner. Situated as it is, in Britain, London is a long way from being such a city. More's the pity.

sparklesunshine 10y ago

I believe they keep them empty so they can visit at any time. They are their holiday homes. Some investors buy flats and keep them empty and in bubble wrap for a couple of years until prices increase, then sell. Not "buy-to-let" investors, but "buy-to-sell"!

ddalex 10y ago

They don't care. When you have billions in the personal bank accounts, the few tens of thousands you would collect per month from a luxury house in London means nothing. It would be more of a nuisance - the tenants need registering, then you have to pay taxes, for what gain?

randyrand 10y ago
A $5 million home rents for roughly $20k a month, or $240k a year.
- ddalex 10y ago
  Probably the owner of said home makes more money than that in his/her sleep.
  - rahimnathwani 10y ago
    Passive income on capital assets (e.g. letting out property) is exactly how they make that money.
GreaterFool 10y ago
You hardly have to do anything. Various agencies will do everything for you. You'll never hear about your tenants.
- pjlegato 10y ago
  The point is, why would they bother even with the minute hassle of vetting and hiring an agency just to make a few pennies every year as compared to their existing billions? It's not even worth their time to do that much, apparently, since the houses in question are sitting empty in a high-rent area.

randyrand 10y ago

Eviction can be very difficult (1 year +) when it comes time to sell. Also, it's risk. They can fuck up the place, and if their rent is not much, then the insurance will be more than the rent.

rahimnathwani 10y ago
That's not the case in London. The notice you need to give a tenant is specified by the lease agreement (general an Assured Shorthold Tenancy). It's usually specified as 6 months minimum, after which either tenant or landlord can give 1 month (or sometimes 2) months to end the lease. If the tenant refuses to move out (despite the landlord serving notice correctly) you can usually get that resolved in 2-3 months at most: 1 month to get a court date, 1 month to give the tenant time to comply with what the court orders, and 1 month to get a bailiff to physically remove them (if it comes to that). (Source: I'm from London, and I've signed several leases as both a landlord and as a tenant. I've once gone to court to evict a tenant who had stopped paying rent, and the matter was resolved in <2 months from first filling in the court paperwork)

natrius 10y ago

In any city with a high price-to-rent ratio, rent isn't really a factor in prices. Investors are buying homes in those places because it's really hard to make more of them, just like gold and high-end art. The price is determined by what other rich people will pay for them to hold as a speculative asset, just like gold and art. Collecting rent is possible, but it makes an illiquid asset even less liquid: many home buyers want to live in the home they buy, which is hard when there's an active lease. This does not happen in cities where it's easy to build more homes in desirable areas. They have lower price-to-rent ratios because prices are determined by the value of the rental income stream. We can make it easy to build more homes in every city by repealing laws that push lower income families out of desirable places—that's what density restrictions were invented to do.