It's not clear to me that evicting tenants who would ordinarily pay is a good strategy for landlords. Besides being a dick move, they don't have a guarantee that anyone will move in
All the people who just got evicted? Probably a good time to invest in Uhaul.
I agree, seems incredibly short sighted. I’m not a landlord so maybe I misunderstand the thinking.
Is it something like tenants who get evicted then have to find even worse landlords to rent from so by evicting people in tough economic times you gain access to tenants at their lowest rate/most desperate? So effectively any tenant you get in bad economic times is someone who is more likely to be stable and reliable after recovery?
I’m totally making things up at this point. It is truly baffling to me.
If you have tenants in NYC right now who aren't terrible, I think you want to keep them because there are a bunch of empty apts
In NYC if you want a good apartment right now, you can significantly underpay for the next couple of years (if your lease is up), but a lot of people whose leases are up are leaving
You make a good point, though. There will be a large shuffle for the next few months (and probably gradually back in the following years), so whoever "makes shovels" for moving will be in a good position
Costs continue. Mortgage payments continue, heat/water/electric bills must be paid, maintenance continues, legal wrangling over legit evictions (say, trashing the place) is costly. Cutting those costs can stabilize losses. Empty flats can be deducted from taxes as lost income. Other tax & accounting benefits may apply.
Part of the benefit of renting - for both parties - is ease of vacating.
>Empty flats can be deducted from taxes as lost income.
AFAIK there's no "lost income" deduction. Yes, you pay less taxes, but that because you had less income to begin with, not because of some deduction. If a tenant is not paying, then you're not getting income, so you're already paying less taxes.
Depends on the local tax law. Confluence of maintenance costs vs depreciation vs revenue vs other legal accounting issues can result in reducing/eliminating taxes - even if you have a net positive income.
Upshot: evicting non paying tenants can be profitable, while letting them stay on “they’ll come thru, just give them time” grounds can mean losing the property outright. (Strange this must be explained on Ycombinator.com.)
Definitely not a landlord, so forgive the unfamiliarity:
Are you not able to claim rental property losses if you simply have a tenant who is unable to pay?
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My model for dealing with a pandemic-induced economic slow-down is that if you can just jump forward til the end, most things will revert to normal (for airline companies but also tenants who can't pay rent)
It's not clear to me that evicting someone and then needing to cut rates to find a new tenant who can afford to rent is a better deal than keeping someone who has fallen on hard times for very straightforward reasons
In theory I agree, but this isn't an unknown element and therefore I believe most forecasts are either prepared for this to happen or have accounted for it to not happen due to available credit/liquidity.
It just seems to simple to say "when the stimulus is gone, and people can't pay rent, evictions will be huge".
