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But eventually the vacant apartments will get rented out because they're costing their owners money (in taxes, mortgages, maintenance) and not bringing any in,
by nostrademons 4y ago
But eventually the vacant apartments will get rented out because they're costing their owners money (in taxes, mortgages, maintenance) and not bringing any in, and you can't spend more than you make forever.
Rents go down when landlords go bankrupt.
That's what happened in 2009-2010. It took about 4 years after peak homebuilding, and 2.5 years after peak home prices, and about 12-18 months after the financial crisis started. Real estate tends to lag financial markets by about that time period. But it does happen - eventually markets respond to supply and demand, and firms that try to buck the trend get swept out of the market.
- tmnvix 4y ago> But eventually the vacant apartments will get rented out because they're costing their owners money Owners make money leaving properties vacant all the time. In fact, in many markets capital gains have been much more significant than rental income for a long time now.
- imtringued 4y agoIn a lot of cities and countries you pay less taxes if your property is considered unsuited for rental or is just an empty plot of land. There is an incredible financial incentive to avoid providing housing as much as possible.
- nostrademons 4y agoNot in a down market. Everybody's a genius in a bull market, where you make money just because your assets went up in value. In a bear market, where your assets go down in value, anyone without cash flow goes bankrupt.
- cudgy 4y agoA 13 year old would have made money in real estate over the last 5 years. One could have literally selected a property at random and made money, even one that was trashed.