News for hackers. Stuff that matters.

A comment on Why Land and Homes Actually Tend to Be Disappointing Investments. Parent comment

Re:Why Land and Homes Actually Tend to Be Disappointing Inve... by vonmoltke on Monday July 18, 2016 @10:48AM (#12115344)
They fight like hell to avoid doing maintenance for the same reason any low-margin business avoids doing anything that isn't absolutely necessary: to protect their slim profit margins. They are not taking a "loss" on maintenance; maintenance is one of many costs of doing business and one slummier landlords try to minimize as much as they can get away with.

There is no fallacy here. For all maintenance done, either the renters cover the costs of the maintenance or the landlord loses money on the property. Trying to avoid performing the maintenance in the first place doesn't change that.

[ Parent | on HN ]
Re:Why Land and Homes Actually Tend to Be Disappointing Inve... by vasilipupkin on Monday July 18, 2016 @02:15PM (#12117007)
my point is that the renters do not fully cover the cost of maintenance for landlords, only partially. Landlords cannot raise rent by the amount equal to the maintenance they have to perform, the rent hikes in a market are a function of supply/demand of renters. Otherwise, rents would rise in places with old houses, independent of peoples desire to live in those places and that obviously doesn't happen
[ Parent | on HN ]