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Paraphrasing someone below, if you as a property owner had the option to sign a 5y lease at $1,000/mo. with a local business that could fail, or hold out a year
by eckmLJE 7y ago
Paraphrasing someone below, if you as a property owner had the option to sign a 5y lease at $1,000/mo. with a local business that could fail, or hold out a year or two to sign a 10y lease at $2,500/mo. with a national bank that will pay on time forever, which would you do?
- OzzyB 7y agoThe OP is pointing out that the property owner also has the ability and incentive to wait by deferring the unrented space as a loss which essentially distorts the "Free Market".
- lotsofpulp 7y agoI can't find anything online that would let commercial property owners do that: https://www.investopedia.com/terms/r/rentalreal-estate-loss-allowance.asp https://www.investopedia.com/terms/r/rentalreal-estate-loss-...
- OzzyB 7y agoI'm not a tax lawyer but I see the link you posted states owners can get a tax deduction for upto $25k a year, which is ~$2k/month which means you can wait for that comfy Bank to come and lease your space. Of course this is based on owners with deep pockets that can benefit from this, and not the rest of us that might actually need that rental income; but like they say, the rich get richer...
- senordevnyc 7y agoReal estate investor here. You can't claim "lost rent" as an expense. The deduction you're referring to allows you to deduct up to $25k per year of actual rental losses against your other income, but only if your income is below $150k / year. In no way is this an incentive to leave your property vacant.
- OzzyB 7y agoSo, is the OP right or wrong? I'll admit I was intrigued :)
- lotsofpulp 7y agoOP is wrong.
- eckmLJE 7y agoThe OP is guessing/presuming that this is the case, and asking why else would a property owner leave their space vacant for a year or more. I'm offering an alternative reason.