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>I have a strong incentive to undercut them Not in a supply constrained market where your rental will be occupied either way.
by RhodesianHunter 2y ago
>I have a strong incentive to undercut them
Not in a supply constrained market where your rental will be occupied either way.
- legitster 2y agoIf your rental is $2400, and it sits on the market for 2 months, you lost potentially lost $4800. It would take a huge rent increase to justify that. It's one thing if the software is helping landlords jack up prices to the market rate. It's quite another to convince them to collude against their best interests.
- bluGill 2y agoIt is a different unit every month though as renters are moving out all the time. This isn't about 1 unit that is empty or not. It is about 100+ units where it can be 89,90, or 91 empty - if the other units that are not rented pay enough higher rent because the empty is not on the market you are better off.
- diebeforei485 2y agoSounds like removing the supply constraints would be a better strategy.
- animal_spirits 2y agoAnd supply constraints come from regulations on housing, zoning, and federal subsidies for "homeowners"
- HDThoreaun 2y agoIf all units are being rented there is no collusion as the market clearing price is being charged. Collusion requires taking supply off the market in order to raise prices.
- RhodesianHunter 2y ago> Collusion requires taking supply off the market in order to raise prices. This is factually incorrect.
- HDThoreaun 2y agoIt is not possible to raise prices without lowering supply if the seller is already trying to maximize profit. Sure the seller could be undercutting the market but that has nothing to do with collusion. Apartments rent in an auction, each fills for the most anyone will rent it for. In order to raise prices landlords need to increase the competition for each unit.