Comment by skybrian
2 years ago
I’m not an expert in real estate but this doesn’t make a lot of sense to me. Sometimes tenants might do so much damage that it would be better to not have rented the unit at all, but this hardly seems likely for most tenants?
Also, it seems like an apartment building that’s mostly rented out would sell for more than one that’s mostly vacant and losing money? Assuming it’s not a teardown.
It seems like it’s similar to any other business. A profitable business would go for more than an unprofitable one.
I can see it as a reason to be picky about tenants, though.
Not when the primary asset of the business appreciates on its own. The fact that the building itself is an investment that can appreciate in value irrespective of its usage means that the incentives are misaligned.
I'm still wondering how the incentives work. It seems like more money (from renting) is better than less money.
> The fact that the building itself is an investment that can appreciate in value irrespective of its usage means that the incentives are misaligned.
You do not seem to understand how commercial property is valued at all.
Your rant is some /r/LateStageCapitalism nonsense.