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If they become short term rentals they essentially 'become vacant' (just one example of why an investment property might be 'vacant'). Obviously I'm not sugges
by tmnvix 3y ago
If they become short term rentals they essentially 'become vacant' (just one example of why an investment property might be 'vacant').
Obviously I'm not suggesting that all do, but some will.
By definition an owner occupier doesn't own a vacant property - only investors do, so the higher the proportion of investors the higher the proportion of underutilised properties.
- pxmpxm 3y ago> an owner occupier doesn't own a vacant property - only investors do ... underutilised properties. They invariably get rented out; you won't make any money for places that sit vacant...
- tmnvix 3y ago> you won't make any money for places that sit vacant... You do if capital gains are sufficient (which has been true in many markets up until very recently).
- pxmpxm 3y agoHouses burn cash monthly - utilities, maintenance, taxes etc. Absent of misguided government interventions (nyc rent control etc), it makes no economic sense to leave a property vacant versus renting it. Even in your hypothetical, you're still strictly better off renting it while capturing the gains. The mostly-empty cities in China is about the only place that I know of where vacant properties are being held as investment, but even there the problem is lack of demand rather than anything to do with who owns it. This whole topic seems like a specialization of https://en.wikipedia.org/wiki/Modigliani%E2%80%93Miller_theorem https://en.wikipedia.org/wiki/Modigliani%E2%80%93Miller_theo...