[paganel]

Sometimes capitalism is indeed schizoid, if I may freely paraphrase Marx. As in this case, when capitalism logic dictates (as you very well explain) that it's better to not receive any money at all compared to receiving some money (but which is under a computed and apparently rational threshold). Capitalism and the flow of money it's all make-believe.

[mobilefriendly]

This behavior isn't really capitalism, it is driven by flawed U.S. tax law which allows owners to deduct interest expenses and losses.

[paganel]

> perhaps even putting the real-estate investor under water if they're leveraged

This made me believe that the OP was talking about a loan, contracted from another private entity (like a bank), so that the real-estate investor renting the place at a sub-threshold price would have meant that the initial estimation on which the real-estate investor had received the loan were not met anymore in case of a refinancing (and most of these types of projects get re-financed from time to time).