Low Balling "luxury" rentals

[monstermagnet]

Originally Posted by Oldandtireddad

We are vacating our legacy apartment in Woodbury (paying folks to move the stuff out w/o our involvement). Our rent was over $3000 for a one bedroom. Your rent can be $1000 a month. Why?

These apartments churn under normal circumstances, constant turnover with moves every day 3 per day

There is nobody to replace our vacancy.

The place is owned by a consortium and is leveraged

The vetting for the place was off the hook, top income top credit, no security deposit

Push comes to shove the place will be forced to make a business decision.

Is $1000 better for them than zero on a one year term?

If you need an apt lowball lowball lowball

Calling total BS on this one (despite generally appreciating your contrarian stance fun in all this). Vacancy rates are still low and will remain low w/ rents high. When the housing market tanks, RENTALS go up on LI!!! Same as 2008. They never came back down. They almost never do. Plenty of home deals? Buy one. Rentals won't change much at all. It's a continuous demand issue with minimal supply. You can't use the standard definitions since LI's rental market is a complete anomaly. In fact, with MORE foreclosures, more LEGAL (aka expensive) rentals appear to pick up the slack of those tossed out of the much more plentiful illegal rentals. When residential RE is soft, the town code gestapos let the developers run wild with multi-unit commercial projects and PILOT tax abatement offers. Rents again, GO UP. Vacancies?!? They don't look for lowball offers, they write off the loss based on actual % occupancy vs projected % occupancy...so the spiral that lowers supply and raises RENTS is constant.

[SeventhFloor]

Honest question here since I've never been a LL:

Renting is a frequent subject on the NYC forum, and in many threads its been stated that the LL can only charge what the market will bear, meaning that if the apartment sits vacant for a few months (forget about whats going on right now), it means that the LL is charging too much for the apartment.

So why is the LL allowed to claim charging too much for a vacant apt as a capital loss?

[071402]

So why is the LL allowed to claim charging too much for a vacant apt as a capital loss?

It is? Where is this written please?
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[Oldandtireddad]

Originally Posted by NSHL10

So after all of these inane posts we find out he is just a Florida troll.

Uh.. Duh.. read the post.

[TomMoser]

Originally Posted by 071402

So why is the LL allowed to claim charging too much for a vacant apt as a capital loss?

It is? Where is this written please?
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It would not be a capital loss. A capital gain or capital loss occurs when a property is sold. Having an apartment sit empty simply reduces the amount of income.

But, since you are talking about rents and how they affect property values, there is an incentive to not lower rents and wait for someone willing to pay more. This is because of what is called the CAP rate. Without going into to much detail. The CAP rate is the rate of return that a purchaser is looking for when they are considering buying a property. They take the net operating profit and divide it by that rate in order to determine how much they are willing to pay. Simply put, the more profitable the building the more it is worth, so it's worth it to suck it up on a couple of units for a while in order to maintain the overall value.

[NSHL10]

Originally Posted by Oldandtireddad

Uh.. Duh.. read the post.

Figured you were just one of the many expats boredModerator cut: language removed in their new town so you come onto our forum. What happened the shuffleboard is closed down due to the virus?