Sorry, that’s actually already factored into the cost of the rent.
The real reason why so many properties are vacant is that even though landlords know they could fill the vacant apartments by lowering the rent, there are companies that make money by telling landlords how much to set the rent for, even if they keep the apartments vacant. showing that they will make more money with less overhead by doing so, so that the decrease in hassle will justify the decrease in profit.
There are a couple of various lawsuits and actions that are going on about these companies right now, and we have yet to see how it’s going to play out. But, the cat is out of the bag, the genie is out of the bottle, the likelihood of rents returning back to something that people can afford with minimum wage income any time soon is pretty low.
Yeah, apparently, when they are using this real page software, they are able to figure out how much they can charge for an apartment and how many apartments they can leave vacant before dropping their prices, and as long as the software says they’ll make more money doing something one way, then that’s what they’re going to do.
I know they use software to figure out optimal rent, I just wonder how sophisticated the algorithm is. It might just use industry statistics and simple arithmetic to determine how many people will move out if rent is raised a by a certain amount, how much this will increase revenue, and how much the additional vacancies will reduce revenue. Finding the sweet spot wouldn’t be hard at all. But this isn’t worth much unless it also takes into account the costs of vandalism, evicting squatters, and whatever else might be involved.
Sorry, that’s actually already factored into the cost of the rent.
The real reason why so many properties are vacant is that even though landlords know they could fill the vacant apartments by lowering the rent, there are companies that make money by telling landlords how much to set the rent for, even if they keep the apartments vacant. showing that they will make more money with less overhead by doing so, so that the decrease in hassle will justify the decrease in profit.
There are a couple of various lawsuits and actions that are going on about these companies right now, and we have yet to see how it’s going to play out. But, the cat is out of the bag, the genie is out of the bottle, the likelihood of rents returning back to something that people can afford with minimum wage income any time soon is pretty low.
Don’t landlords dislike vacancies because empty units get broken into and vandalized, creating more cost?
https://truthout.org/articles/real-estate-software-aided-price-fixing-cartel-among-us-property-companies/
Yeah, apparently, when they are using this real page software, they are able to figure out how much they can charge for an apartment and how many apartments they can leave vacant before dropping their prices, and as long as the software says they’ll make more money doing something one way, then that’s what they’re going to do.
I know they use software to figure out optimal rent, I just wonder how sophisticated the algorithm is. It might just use industry statistics and simple arithmetic to determine how many people will move out if rent is raised a by a certain amount, how much this will increase revenue, and how much the additional vacancies will reduce revenue. Finding the sweet spot wouldn’t be hard at all. But this isn’t worth much unless it also takes into account the costs of vandalism, evicting squatters, and whatever else might be involved.