Not much of an expense imo. Like giving a speeding ticket to a billionaire, it doesn’t actually mean much if you’re rich enough.
Id rather make the initial purchase cost extraordinarily expensive after buying more than two houses. Third house is 5x the cost. Fourth house is 50x the cost. Nobody needs four houses so it’s a fuck you tax.
And at scale it will eat into investor returns, making holding them empty a less profitable endeavor. They would suddenly go from having a neutral MRR asset turned into a negative MRR if they choose not to rent out. You can bet your sweet bippy that the bean counters are going to notice the difference and argue to sell or rent them to cut the expenses.
It’s not just another cost of doing business though, it’s specifically a cost of not doing business.
So imagine someone has been buying up homes to rent them. Market rate for rent is $1000 and they own 1000 units (just to make the math easy). That means they would profit $1 million every month with every unit filled, and lose $1 million every month for leaving every unit empty.
Now imagine they have half the units filled, so they are getting $0 each month. They could try and raise the rent over market rate to cover the cost, but that would make it harder to fill the empty units and encourage their tenants to leave. If they lower the rent a bit though, they could fill the empty units and erase the cost entirely. Now imagine every landlord is in this dilemma; it puts the pressure onto them to appeal to prospective tenants. They could even increase profit by housing people for free, just filling units with the homeless to reduce costs.
If they don’t change behavior and just eat the cost, then that’s more money for the state to invest in housing programs.
If you own a house with nobody living in it, you gotta pay rent to the state each month for the privilege of keeping it empty.
They do this in India. You’re allowed 2 homes, 3rd onwards you have to pay Income tax for deemed rent received if it’s empty.
After a while, it’s just part of the cost.
Not much of an expense imo. Like giving a speeding ticket to a billionaire, it doesn’t actually mean much if you’re rich enough.
Id rather make the initial purchase cost extraordinarily expensive after buying more than two houses. Third house is 5x the cost. Fourth house is 50x the cost. Nobody needs four houses so it’s a fuck you tax.
And at scale it will eat into investor returns, making holding them empty a less profitable endeavor. They would suddenly go from having a neutral MRR asset turned into a negative MRR if they choose not to rent out. You can bet your sweet bippy that the bean counters are going to notice the difference and argue to sell or rent them to cut the expenses.
deleted by creator
It’s not just another cost of doing business though, it’s specifically a cost of not doing business.
So imagine someone has been buying up homes to rent them. Market rate for rent is $1000 and they own 1000 units (just to make the math easy). That means they would profit $1 million every month with every unit filled, and lose $1 million every month for leaving every unit empty.
Now imagine they have half the units filled, so they are getting $0 each month. They could try and raise the rent over market rate to cover the cost, but that would make it harder to fill the empty units and encourage their tenants to leave. If they lower the rent a bit though, they could fill the empty units and erase the cost entirely. Now imagine every landlord is in this dilemma; it puts the pressure onto them to appeal to prospective tenants. They could even increase profit by housing people for free, just filling units with the homeless to reduce costs.
If they don’t change behavior and just eat the cost, then that’s more money for the state to invest in housing programs.