Why is there so much opportunity in real estate?
Simple -- many owners are not in the real estate business.
Their main priority is to ensure that the property is fully leased and minimize their expenses, and are not focused on maximizing the value of the asset.
If a
Simple -- many owners are not in the real estate business.
Their main priority is to ensure that the property is fully leased and minimize their expenses, and are not focused on maximizing the value of the asset.
If a
tenant is paying 20% below market rent, but the landlord believes increasing the rent will force them to leave, they will keep the rent low.
A vacancy is the worst thing in the world for them. They are afraid of interrupting their income stream, and super afraid of having to
A vacancy is the worst thing in the world for them. They are afraid of interrupting their income stream, and super afraid of having to
spend the money on leasing commissions, tenant improvement allowances, legal fees, etc.
The result is that the asset stays leased, but it's also grossly undervalued.
When they go to sell the property, a savvy real estate buyer will be much less concerned with occupancy and
The result is that the asset stays leased, but it's also grossly undervalued.
When they go to sell the property, a savvy real estate buyer will be much less concerned with occupancy and
much more concerned with value.
They will be able to simply wait for the leases to expire and renew at a market rent that's fair for all sides, and make their profit in the process.
When it comes to vacancy over value, I go with value.
They will be able to simply wait for the leases to expire and renew at a market rent that's fair for all sides, and make their profit in the process.
When it comes to vacancy over value, I go with value.
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