They do get their money from rentals but not the empty ones. It’s called a speculative vacancy.
For example, if you own a whole apartment building, you could rent out all the apartments and make a bunch of money. Alternately, you could deliberately leave eg. 10% of them vacant to artificially throttle supply. Because people need housing they’ll compete for the remaining ones, allowing the magic of market economics to increase rents higher than you would make from leasing out the vacancies (costs and taxes included. In some places you can even claim those losses for a tax break).
The purpose of owning them at all is to allow the landlord to easily adjust the amount of supply based on what makes them the most money. If rents drop too much from low demand, they can kick out a few tenants to try and drive prices back up. If the market gets to the point where it’s worth it to have more apartments, they can just lease more without having to build or buy anything new.
If there’s more demand for the property, its value will increase empty or not, allowing it to still be worth owning because it increases their net worth and they can sell it for more later or use it as collateral on loans.
In the short term it’s always worth more to have tenants but as a longer term strategy, empty housing lets you try to price fix. Only works if you control enough housing and/or can collude with other landlords in an area.
Kinda like De Beers did with diamonds, except with people’s homes and ability to live.
In video game/card game logic it’s “sacrifice a house to gain +1/+1 on your other houses.”
Disclaimer: not a landlord or property expert, just my layman’s understanding of how it works.
They do get their money from rentals but not the empty ones. It’s called a speculative vacancy.
For example, if you own a whole apartment building, you could rent out all the apartments and make a bunch of money. Alternately, you could deliberately leave eg. 10% of them vacant to artificially throttle supply. Because people need housing they’ll compete for the remaining ones, allowing the magic of market economics to increase rents higher than you would make from leasing out the vacancies (costs and taxes included. In some places you can even claim those losses for a tax break).
The purpose of owning them at all is to allow the landlord to easily adjust the amount of supply based on what makes them the most money. If rents drop too much from low demand, they can kick out a few tenants to try and drive prices back up. If the market gets to the point where it’s worth it to have more apartments, they can just lease more without having to build or buy anything new.
If there’s more demand for the property, its value will increase empty or not, allowing it to still be worth owning because it increases their net worth and they can sell it for more later or use it as collateral on loans.
In the short term it’s always worth more to have tenants but as a longer term strategy, empty housing lets you try to price fix. Only works if you control enough housing and/or can collude with other landlords in an area.
Kinda like De Beers did with diamonds, except with people’s homes and ability to live.
In video game/card game logic it’s “sacrifice a house to gain +1/+1 on your other houses.”
Disclaimer: not a landlord or property expert, just my layman’s understanding of how it works.