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Zillow Home Buying Algorithm Outbid Buyers, Now Faces Selling Houses at a Loss
- donkarma 5y agogood, only individuals should own homes
- aurizon 5y agoI see an uptick in rates has occurred. How far will it go? Many cities have faced the problem of a shortage of affordable homes to buy, yet there are a lot of homes for rent. The rents climb, as do rates of unrented units. This is driven by the yield driving purchases at low carrying costs by corporate/offshore buyers. You can get enough rent to cover the interest costs as long as you make the tenant pay light/heat/water as well as any condo fees. Usually there is no business tax on properties bought to rent(yet they are a de-facto business). I separate the business taxes levied on offices, retail shops, warehouses etc., from the city levied property taxes. What happens if cities declared these rental 'businesses' a true business? Exempting flats rented in houses or purpose built apartment buildings (who are taxed on profits and with realty taxes. This would add an unwelcome tax on people who bought houses/condos for rental purposes. They may try to pass this to the tenant - but this would shift the yield to a less profitable point and cause them to want to exit this business. Buyers would then buy for residential use = just condo fees(if condos) plus realty taxes. Implementing this would free a huge swathe of places owned by rent seekers into the residential market. In addition, would act to reduce undeveloped land costs - current coupled to and driven by rent seeking buyers? How say you all to this concept?