Subj : Re: Housing Market
To   : poindexter FORTRAN
From : boraxman
Date : Sun Apr 20 2025 01:13 pm

On 19 Apr 2025 at 04:47p, poindexter FORTRAN pondered and said...
 
 pF> -=> boraxman wrote to Nightfox <=-
 pF> 
 pF>  bo> Not so.  In Australia they just leave the house empty.  Landlords are
 pF>  bo> often stupid and greedy.  These aren't sophisticated investors... I'v
 pF>  bo> seen businesses move out, close up, because of high rents, then the
 pF>  bo> office/building stay EMPTY for months because of the insanely high
 pF>  bo> rent.
 pF> 
 pF>  bo> They just complain how unfair it all is instead of dropping their
 pF>  bo> prices.
 pF> 
 pF>  That happens in the US all the time - businesses move out, but the
 pF>  potential revenues for the lessee play into the collateral value.
 pF>  Effectively, the landlord can't reduce the rent from inflated, bubble
 pF>  values because that would trigger a collateral issue with the bank,
 pF>  since the collateral is no longer worth what it was when signed against
 pF>  the loan. The landlord would need to come up with additional
 pF>  collateral to continue the loan.
 pF> 
 pF>  Easier to keep it empty, hope for a sucker, take the tax write off and
 pF>  blame it on Biden, Trump, Obama, or the Chinese.

All investment carries risk, and sometimes you lose.  Sometimes you just have to wear a loss because policy must change.

Housing is no different.  We seem to think that this class of investment should be manipulated so people don't lose, but thats a long term losing strategy.

Sorry, but if you bought into a bubble, you have to expect a haircut.  Don't know why one class of investors just has to be protected from their own silly decisions!

I know, I used to manage a 7 digit investment portfolio for a charity.  Sizeable sum, their entire net worth (almost), and I had to make smart decisions, and bear the risk.  But if I was a landlord, I could whine and moan and act like I deserve constant gains without any risk of loss, as if I DESERVED to win.

No, make smart choices.  Don't buy overvalued assets.  If you have overvalued assets, dispose of them and go into another investment class.

They need to teach this!

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 * Origin: Agency BBS | Dunedin, New Zealand | agency.bbs.nz (21:1/101)

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