> They'll lower the price when their alternative is that the unit stays empty indefinitely. That doesn't really square with how large multi-unit properties are

> They'll lower the price when their alternative is that the unit stays empty indefinitely. That doesn't really square with how large multi-unit properties are valued, though. Once you get past 4 units in a building, you're into the world of commercial real estate. Commercial real estate is commonly valued based on a percentage of the projected (i.e. theoretical) cash flow the building would generate if all units therein were rented out. Notice how you don't have to actually rent out the units for this formula to work? If you have vacancies, you can just "project" that they'll be rented out at whatever your current asking price is. At this point, you might be saying to yourself something like "WTF, that's basically fraud, isn't it?" Well, it basically isn't, as long as you can convince at least one person (e.g. a banker or potential purchaser) that your projections are sound in order to either get a loan against any equity you have in the building, or to buy it outright, respectively. Just so you know I'm not making any of this up, here's a page that lays it all out for you: https://www.firstrepublic.com/insights-education/five-common-methods-to-value-a-commercial-property https://www.firstrepublic.com/insights-education/five-common... To bring it back to vacancies and rents, that's the reason you see buildings sitting with tons of vacancies and owners not dropping rents. It's also the reason you see those "N months free, then $R per month thereafter" deals (because $R is the value they get to "project" they'll be taking in every month, regardless of the fact that it cost N months' worth of rent to bring in a tenant. If you start lowering rents, then that fucks with your "projections," see. If you're like me when I first heard all this, you probably think this is insane at best, or shady at worst. And, yeah, it kinda is. But it also explains the phenomenon of units sitting vacant and bringing in $0/month when the landlord could just lower the rent and bring in $POSITIVE/month instead.