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This makes no sense. Rents are not linked to the costs of property. They are fixed to as much as local people can pay for a home, roughly 50% of typical househo
by user5994461 8y ago
This makes no sense. Rents are not linked to the costs of property. They are fixed to as much as local people can pay for a home, roughly 50% of typical household income everywhere in the developed world.
The ROI is the +appreciation + rent - expenses.
If the property depreciates you have least return on investment. There is nothing you can do about it. You can't increase rent to compensate, people can't pay more rent. Your reasoning is absurd, if you could increase rent you should be doing that right now already.
- dahdum 8y agoRents are definitely linked, until discretionary income for the local people goes to zero they can still pay more. Housing prices also affect mortgage payments, which rise in tandem. Looking it up, I see USA is somewhere around 30% of income [1] as housing cost, while NZ is about 17% [2]. Seems to indicate there is room to grow under tight supply conditions. [1] https://www.businessinsider.com/how-to-save-more-money-2017-8 https://www.businessinsider.com/how-to-save-more-money-2017-... [2] https://www.stats.govt.nz/information-releases/household-income-and-housing-cost-statistics-year-ended-june-2017 https://www.stats.govt.nz/information-releases/household-inc...
- deleted 8y ago[deleted]