Comment by Anonbrit
2 days ago
Many commercial properties are on relatively short-term mortgages and are remortgaged regularly. If they rent it out cheaply, then the paper 'value' of the building has dropped, which can make it difficult or impossible to remortgage. It's why you see so many high rent but 'free for the first year' deals - it technically isn't reducing the rent on paper, but many of the tenants vanish 13 months after moving in
I hear people say this but I don't understand why mortgage lenders would be fooled by this. How is renting something out for the low price of $X "less" than not renting it out at all? Wouldn't a property that isn't rented and produces no income be considered the least valuable of all?