Thread by @ronmortgageguy

Negative Yield Bonds = Empty Houses

So much talk about negative yield bonds got me thinking

Are empty houses the retail version of those bonds for overseas investors?

$3M house on my street used for Ferrari storage, no one has lived there in 7 years

Assume no mortgage
2/

/2 total cost to store this $3M asset = property tax and minimum utilities

Call it $25K per year or just under 1% of asset value

Hey it's not 20 bps but this is retail after all

No rental income = virtually no tax filing info, it becomes a zero taxable income return

3/

/3 and zero taxable income = very low profile which some of the party members and Colonels involved think is really beneficial

Maybe well worth the 0.75% negative yield

The cost of safely storing the asset

It's the new version of the old Swiss Bank Account

4/

/4 That is before other countries brought an end to Swiss banking secrecy

Just 2 disadvantages to empty houses:

They distort the local real estate market (who cares says the owners)

And you have to cut the grass or you get a work order (damn, the University kid hates work)