4 ms·
I saw a 1 bedroom for $4,700 in the Peninsula recently, which explains why that complex has so many 1BR available.
by alteria 7y ago
I saw a 1 bedroom for $4,700 in the Peninsula recently, which explains why that complex has so many 1BR available.
- uoaei 7y agoAnd somehow, that's still the profitable option and not actually filling the apartment.
- mschuster91 7y agoProbably because waiting for the property value to increase over a year or two and then deducting paying the loan rate/interest over the time is more profitable. Classic perverse incentive, the only way to fix this is a drastic vacancy tax.
- lotsofpulp 7y ago> then deducting paying the loan rate/interest over the time is more profitable. What does this have to do with not renting the apartment? Any business will deduct interest payments as a business expense.
- eru 7y agoAnd a vacancy tax isn't a good idea either. (Though it's better than the UK's tax rebate for vacancy.) Just use a land value tax.
- bluGill 7y agoThe problem is if they have some renters at the high price it is better to say they have tenants coming (even though they never arrive) than rent for cheaper and risk the old tenants find out the price is lower and they demand a reduced rate. Now add in a bank who is auditing your books: if you have some empty units "almost rented" that looks better than full units but you are not making enough on rent to pay the mortgage - even though either way you are not making enough in rent to pay the bills.
- nradov 7y agoBanks don't conduct such audits.
- bluGill 7y agoIf the loan requires that all units be rented for $x they will do something to check.
- nradov 7y agoBank loans to landlords do not contain convenants requiring that all units be rented for $x. You appear to be confusing policies that some lenders apply when originating loans with covenants that borrowers have to follow on an ongoing basis. Those are not the same.