Quote:
Originally Posted by Engineerding
A jar of mayo could make a profit owning units in nyc, so this smells like tax loopholing because they aren’t getting fat enough profits.
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It's the other way around last I checked - cap rates are so low that it's very difficult to make profits. A landlord's way to profit is that someone down the road will hopefully accept an even lower cap rate than them, i.e. they can sell their real estate at a profit.
In such low-cap-rates markets (Vancouver, Paris) it's perfectly normal and logical that you'll often see investors not even bothering to deal with tenants given that rents are peanuts in comparison to prices - the goal is to own what are essentially brick-and-mortar bitcoins and hope they'll continue to appreciate every year at a nice rate.