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Right, it makes existing infrastructure more affordable. But for new infrastructure, any income generated is priced into the value, making the "profit" from ren
by johnnybazooka 12y ago
Right, it makes existing infrastructure more affordable. But for new infrastructure, any income generated is priced into the value, making the "profit" from renting it out less substantial.
- grandalf 12y agoThat may be true, but why would anyone invest in new infrastructure if it didn't seem like a better option than buying existing infrastructure? Both alternatives include the additional value that AirBnB creates and I'd expect both to result in increased investment in housing across the board, both new construction and improvement.
- seanflyon 12y agoYou are ignoring the concept of competition. Housing is not the most competitive market due to restrictions both natural (limited space) and artificial (zoning), but there is still competition.
- johnnybazooka 12y agoSee that's my point... there is only so much land in the middle of NYC that is zoned right for condos, so the competition really won't increase. Also, real estate in general is a very capital intensive industry, which takes out 99% of competition anyways. How many people are there that can raise $200 million to build a project. Not many.
- seanflyon 12y ago> How many people are there that can raise $200 million to build a project. Not many. First, you don't need many for competition; you just need a few. Second, there are lots of people who can raise a mere $200 million.
- johnnybazooka 12y ago"mere $200 million" lol ok
- seanflyon 12y agoWelcome to the world of finance.