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No, because the seller wouldn't sell if for that. Home value is the price a buyer would pay and a seller would accept in an arm's length transaction under no duress of any kind.
Profit is a profit rather its 2 cents or 2k dollars, you already made a profit.
From a consumer stand point, anything over 30% after cost is pure greed. *cost of labor, transportation, salaries. ect.
I think you are forgetting about occupancy rates which in 2017 were 66% in the U.S. The companies that own hotels still have fixed costs associated with these non-revenue producing vacant rooms, which is why you sometimes see steep discounts off season or slow days of the week. Better to rent for a low price than nothing at all but even then you will still have rooms that sit vacant b/c of lack of demand. Why have all these extra rooms that are not always used? For peak times where they will be and the increased rates offset the losses of the slow periods.
If hotels were an industry with high barriers to entry or a monopoly you would have a point, but in reality it is a very competitive industry with relatively low margins. In fact you might be surprised at the number of businesses, e.g. retail, where there is near zero or no profit in the actual running of the business. Rather it is done for the enjoyment of the entrepreneur (like lots of restaurants), and the only hope of a pay off is when the business is shut down and the land is sold. Happened to a friend of mine in Wichita Falls who used to own a bike shop.
Also regarding "pure greed": Should Lebron James work for $3.5M a year versus the $35M he currently makes? I mean its just a silly game and other needy people could use that excess money if it was divvied up to various charities.
I think you are forgetting about occupancy rates which in 2017 were 66% in the U.S. The companies that own hotels still have fixed costs associated with these non-revenue producing vacant rooms, which is why you sometimes see steep discounts off season or slow days of the week. Better to rent for a low price than nothing at all but even then you will still have rooms that sit vacant b/c of lack of demand. Why have all these extra rooms that are not always used? For peak times where they will be and the increased rates offset the losses of the slow periods.
If hotels were an industry with high barriers to entry or a monopoly you would have a point, but in reality it is a very competitive industry with relatively low margins. In fact you might be surprised at the number of businesses, e.g. retail, where there is near zero or no profit in the actual running of the business. Rather it is done for the enjoyment of the entrepreneur (like lots of restaurants), and the only hope of a pay off is when the business is shut down and the land is sold. Happened to a friend of mine in Wichita Falls who used to own a bike shop.
Also regarding "pure greed": Should Lebron James work for $3.5M a year versus the $35M he currently makes? I mean its just a silly game and other needy people could use that excess money if it was divvied up to various charities.
All of that logic is lost on hitpause, if you review his post history.
All of that logic is lost on hitpause, if you review his post history.
Nope. I just play devils advocate from a consumer side, not a business stand point. 2 sides to everything and people who own business thinks they can control the market to meet their needs and wants. I understand your trying to make money but when your just doubling the cost of something, just (because of demand) when their is plenty of supply, then we have a problem.
Nope. I just play devils advocate from a consumer side, not a business stand point. 2 sides to everything and people who own business thinks they can control the market to meet their needs and wants. I understand your trying to make money but when your just doubling the cost of something, just (because of demand) when their is plenty of supply, then we have a problem.
You remind me of an ex-friend who used to lament that the problem wasn't Marxist economic theory, but that it was never implemented correctly. You can be a devil's advocate but I think most of us want to hinge our future prosperity on a viable economic system and not something that looks good in a textbook.
Nope. I just play devils advocate from a consumer side, not a business stand point. 2 sides to everything and people who own business thinks they can control the market to meet their needs and wants. I understand your trying to make money but when your just doubling the cost of something, just (because of demand) when their is plenty of supply, then we have a problem.
How many times have you turned a raise down at work?
How many times have you sold an asset, say a house, and ignored the offers being made and actively limited your profit on the sale?
I think you are forgetting about occupancy rates which in 2017 were 66% in the U.S. The companies that own hotels still have fixed costs associated with these non-revenue producing vacant rooms, which is why you sometimes see steep discounts off season or slow days of the week. Better to rent for a low price than nothing at all but even then you will still have rooms that sit vacant b/c of lack of demand. Why have all these extra rooms that are not always used? For peak times where they will be and the increased rates offset the losses of the slow periods.
If hotels were an industry with high barriers to entry or a monopoly you would have a point, but in reality it is a very competitive industry with relatively low margins. In fact you might be surprised at the number of businesses, e.g. retail, where there is near zero or no profit in the actual running of the business. Rather it is done for the enjoyment of the entrepreneur (like lots of restaurants), and the only hope of a pay off is when the business is shut down and the land is sold. Happened to a friend of mine in Wichita Falls who used to own a bike shop.
Also regarding "pure greed": Should Lebron James work for $3.5M a year versus the $35M he currently makes? I mean its just a silly game and other needy people could use that excess money if it was divvied up to various charities.
And of course, there’s also future costs. In other words, replacing carpets, roofs, central air, bathroom fixtures, furniture, ect.
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