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Landlords, like any other business, are out to maximize their profits. Their goal is to capture 100% of the profit of businesses that rent from them. Given tha

by mark-r 7y ago

Landlords, like any other business, are out to maximize their profits. Their goal is to capture 100% of the profit of businesses that rent from them. Given that the mechanisms for doing this are very crude, there's a chance that they could be getting 101% or more and that spells death for your business.

IAmGraydon 7y ago
A landlord’s goal is to capture 100% of their tenants profits? That’s quite a misinformed statement. Their goal is to create sustainable, long term income on their investments. Taking everything they can from their tenants would not foster sustainability. I’m also really curious about your last sentence. Can you elaborate?
- mark-r 7y ago
  The goal is to maximize income, and the maximum you can get sustainably is 100% of your lesee's profits. If you take less then you're leaving money on the table. If you take more than that (e.g. 101%) they will inevitably go out of business. If you guess wrong and drive a place out of business, your hope is that the next tenant is more profitable and can handle the overhead. Chain restaurants are typically pretty good about this because they know their revenue potential accurately ahead of time.
  - opo 7y ago
    >...The goal is to maximize income, and the maximum you can get sustainably is 100% of your lesee's profits. If you hypothetically take 100% of the profits of the renter, they won't be in business long term. There likely will be a gap between when they stop paying rent and you are able to evict them. There will also likely be a gap between that point and when you get a new renter, particularly when your rent is so high. I agree that the goal is to maximize income, but trying to take 100% of the profits of the renter is not a way to maximize long term income.
  - chii 7y ago
    > the maximum you can get sustainably is 100% of your lesee's profits. only if there's a monopoly on real estate. I find that unlikely.
wendyshu 7y ago
So with profits dropping they should lower rent?

by mark-r 7y ago

IAmGraydon 7y ago

A landlord’s goal is to capture 100% of their tenants profits? That’s quite a misinformed statement. Their goal is to create sustainable, long term income on their investments. Taking everything they can from their tenants would not foster sustainability. I’m also really curious about your last sentence. Can you elaborate?

mark-r 7y ago
The goal is to maximize income, and the maximum you can get sustainably is 100% of your lesee's profits. If you take less then you're leaving money on the table. If you take more than that (e.g. 101%) they will inevitably go out of business. If you guess wrong and drive a place out of business, your hope is that the next tenant is more profitable and can handle the overhead. Chain restaurants are typically pretty good about this because they know their revenue potential accurately ahead of time.
- opo 7y ago
  >...The goal is to maximize income, and the maximum you can get sustainably is 100% of your lesee's profits. If you hypothetically take 100% of the profits of the renter, they won't be in business long term. There likely will be a gap between when they stop paying rent and you are able to evict them. There will also likely be a gap between that point and when you get a new renter, particularly when your rent is so high. I agree that the goal is to maximize income, but trying to take 100% of the profits of the renter is not a way to maximize long term income.
- chii 7y ago
  > the maximum you can get sustainably is 100% of your lesee's profits. only if there's a monopoly on real estate. I find that unlikely.

wendyshu 7y ago

So with profits dropping they should lower rent?