20 ms·

good. that means they will have to sell soon.

Proven 6y ago
They're loaded enough to not be in a hurry to make long term lease agreements at what they consider to be depressed price levels. I'm not saying they're right, I'm only saying you're likely wrong.
nikanj 6y ago
Extremely low interest rates, deferring principal payments and the still-raising prices of apartments mean that landlords 1) continue to make money even if they have no tenants 2) don’t have to dump the properties, because interest-payments-only carrying cost are so low.
- Robotbeat 6y ago
  There should be a larger tax on empty units.
  - ryan_j_naughton 6y ago
    I would be fine with that if there weren't rent control. But combined with onerous rent control laws, and that seems very unfair to the landlord. Specifically, rent control laws that prevent you from raising the rent more then X% per year and laws that give someone automatic month to month terms after the lease expires.. This is because right now rental rates are artificially depressed. The landlord might have built their financial model on normal market rents. If someone can lock in a way under market rate due to the pandemic and then keep that rate after the pandemic, then the tenant is taking advantage of the market based pricing when it goes down but disavowing the validity of market based pricing when it goes up. If rent control exemptions were create that allowed the landlord to raise the rent to what it was prior to the pandemic once this is over, then that would be fine. But as it stands, it doesn't seem fair to force the landlords to rent at under market rates (traditional market, i mean) and then also force that rate to be locked in for the future.
    - distances 6y ago
      > laws that give someone automatic month to month terms after the lease expires.. A bit off topic, but are US rental contracts for fixed periods? In Europe I'm used to a "valid until further notice" model, with possibility to break the lease with a given notice period (1-3 months) and a chance of yearly rent increases. Very much similar to employment contracts with notice periods and yearly raises.
      - colejohnson66 6y ago
        In the US, rentals are generally for fixed terms (I haven’t seen any other form, but I could be wrong). The apartment I’m currently in was signed for only one year at a specified monthly payment. First months payment and a security deposit (equal to a monthly payment) were required at signing. At the end of the term, we have the option to renew (at a possibly higher price) or leave (and get the deposit back). Many rental contracts have an early termination clause of some sorts. Generally, they charge you an “early termination fee” that’ll come out of your security deposit. However, the laws also have “breach of contract” provisions: if your landlord is not keeping up the property (such as ignoring requested work orders), you have the right to leave at any time (before your term ends) and get your security deposit back. You may have to go to court over it, but you are offered that protection. It does go two ways though: if you are trashing the place, they can kick you out right away and keep your deposit.
      - Kihashi 6y ago
        IME, rentals are usually for a 1 year period(and often the lease auto-renews for another year if neither part gives notice). Another common model is an initial 1 year term that then converts to month-to-month. Generally speaking, turnover higher than 1/year is incredibly costly for the landlord, so 1 year leases are the norm. Longer periods are too onerous on renters. In commercial real-estate, though, longer periods are more common (5 and 10 years are not unheard of).
      - ryan_j_naughton 6y ago
        In the last 2 cities that I've lived in (Washington DC and Santa Monica) leases default to month-to-month after the lease reaches term. For example, if you signed a 1 year lease, you are required to pay monthly for that entire year or face still penalties. But once you reach the end of your 1 year lease, your rental goes month-to-month. That implies that the rental rate stays the same (unless sufficient notice is given by the landlord, generally 30 or 60 days prior to the end of the 1 year lease). Furthermore, if you want to vacate, you have to provide a certain amount of notice (generally 30 days). The key difference is whether rent control is in play there. In my Santa Monica apartment it was in play and the rent could only raise once per year and there was a maximum percentage increase allowable per year. In Washington DC the vast majority of apartments are not under rent control. Consequently, the apartment legally has to default to month-to-month, but it doesn't have to stay the same rate. Generally what that means is that the landlord, 60 days before the end of the 1 year lease, will provide the tenant a new rate sheet with a monthly price is they want a 1-month lease, a different monthly price for a 6-month lease, and a different monthly price for another year lease. The 1-month lease price is generally MUCH MUCH higher than the new 1-year lease. That incentivizes the tenant to sign a longer term agreement and provide the landlord certainty of occupancy.
imtringued 6y ago
Yes, poor landlords sell to rich landlords. Having less landlords is a good thing. (it really isn't)

They're loaded enough to not be in a hurry to make long term lease agreements at what they consider to be depressed price levels. I'm not saying they're right, I'm only saying you're likely wrong.

nikanj 6y ago

Extremely low interest rates, deferring principal payments and the still-raising prices of apartments mean that landlords 1) continue to make money even if they have no tenants 2) don’t have to dump the properties, because interest-payments-only carrying cost are so low.

Robotbeat 6y ago
There should be a larger tax on empty units.
- ryan_j_naughton 6y ago
  I would be fine with that if there weren't rent control. But combined with onerous rent control laws, and that seems very unfair to the landlord. Specifically, rent control laws that prevent you from raising the rent more then X% per year and laws that give someone automatic month to month terms after the lease expires.. This is because right now rental rates are artificially depressed. The landlord might have built their financial model on normal market rents. If someone can lock in a way under market rate due to the pandemic and then keep that rate after the pandemic, then the tenant is taking advantage of the market based pricing when it goes down but disavowing the validity of market based pricing when it goes up. If rent control exemptions were create that allowed the landlord to raise the rent to what it was prior to the pandemic once this is over, then that would be fine. But as it stands, it doesn't seem fair to force the landlords to rent at under market rates (traditional market, i mean) and then also force that rate to be locked in for the future.
  - distances 6y ago
    > laws that give someone automatic month to month terms after the lease expires.. A bit off topic, but are US rental contracts for fixed periods? In Europe I'm used to a "valid until further notice" model, with possibility to break the lease with a given notice period (1-3 months) and a chance of yearly rent increases. Very much similar to employment contracts with notice periods and yearly raises.
    - colejohnson66 6y ago
      In the US, rentals are generally for fixed terms (I haven’t seen any other form, but I could be wrong). The apartment I’m currently in was signed for only one year at a specified monthly payment. First months payment and a security deposit (equal to a monthly payment) were required at signing. At the end of the term, we have the option to renew (at a possibly higher price) or leave (and get the deposit back). Many rental contracts have an early termination clause of some sorts. Generally, they charge you an “early termination fee” that’ll come out of your security deposit. However, the laws also have “breach of contract” provisions: if your landlord is not keeping up the property (such as ignoring requested work orders), you have the right to leave at any time (before your term ends) and get your security deposit back. You may have to go to court over it, but you are offered that protection. It does go two ways though: if you are trashing the place, they can kick you out right away and keep your deposit.
    - Kihashi 6y ago
      IME, rentals are usually for a 1 year period(and often the lease auto-renews for another year if neither part gives notice). Another common model is an initial 1 year term that then converts to month-to-month. Generally speaking, turnover higher than 1/year is incredibly costly for the landlord, so 1 year leases are the norm. Longer periods are too onerous on renters. In commercial real-estate, though, longer periods are more common (5 and 10 years are not unheard of).
    - ryan_j_naughton 6y ago
      In the last 2 cities that I've lived in (Washington DC and Santa Monica) leases default to month-to-month after the lease reaches term. For example, if you signed a 1 year lease, you are required to pay monthly for that entire year or face still penalties. But once you reach the end of your 1 year lease, your rental goes month-to-month. That implies that the rental rate stays the same (unless sufficient notice is given by the landlord, generally 30 or 60 days prior to the end of the 1 year lease). Furthermore, if you want to vacate, you have to provide a certain amount of notice (generally 30 days). The key difference is whether rent control is in play there. In my Santa Monica apartment it was in play and the rent could only raise once per year and there was a maximum percentage increase allowable per year. In Washington DC the vast majority of apartments are not under rent control. Consequently, the apartment legally has to default to month-to-month, but it doesn't have to stay the same rate. Generally what that means is that the landlord, 60 days before the end of the 1 year lease, will provide the tenant a new rate sheet with a monthly price is they want a 1-month lease, a different monthly price for a 6-month lease, and a different monthly price for another year lease. The 1-month lease price is generally MUCH MUCH higher than the new 1-year lease. That incentivizes the tenant to sign a longer term agreement and provide the landlord certainty of occupancy.

imtringued 6y ago

Yes, poor landlords sell to rich landlords. Having less landlords is a good thing. (it really isn't)