[Reedx]

There are houses throughout the Bay Area sitting empty, just being used as a relatively safe store of value. That goal is already achieved without having to deal with the overhead of managing the property and tenants.

So the homes just sit... empty.

[lkbm]

Seems strange. Surely a management company would happily handle all that hassle and provide a secondary income stream. Sign a couple forms and boost investment income by a few percent?

Surely that's not significantly more burdensome than the bureaucratic hassle of purchasing the property in the first place.

I guess there's some significant tax/regulatory difference between capital gains from holding property vs. an income stream from renting said property.

[Qworg]

AFAIK, if you CAN rent a property for $X and it remains empty, you can take it as a loss. $X tracks inflation/value, which was a huge problem when I lived in Pittsburgh. Places that were empty for 40 years had ludicrously high rents (4X+ new places), so they just remained empty as tax write offs.

[klipt]

There's large downside risk to renting out property. One bad tenant trashing the place can cancel out years of rent.

And in the Bay Area people invest more for appreciation than rent. The rent/price ratio is much higher elsewhere.

[asdff]

Landlords have insurance too. Plenty of people still rent. If a landlord is struggling to fill their apartment in sf, maybe they should try not asking 3000 a month. The demand is very much there.

[sigstoat]

> Seems strange. Surely a management company would happily handle all that hassle and provide a secondary income stream.

unfortunately management companies require managing themselves. even if you find a good one, they won't necessarily stay good, so you're firing them, getting new ones, etc.

and i've never heard of one that will let you hand them a property, and then eat all of the risk for you and provide a simple de-risked income stream. even if they'll do a good job of handling 100% of maintenance tasks, they're still going to send you the bills.

[rckoepke]

Sounds like a new business plan for a new market.

[sigstoat]

nothing about property management or property management in SF is "new".

anybody who can afford to de-risk a real estate income stream can afford to just buy real estate themselves, they don't need yours. there's no market here.

[OnlineGladiator]

SF has a lot more burdensome tenant protection laws than most places. Sometimes you can't kick out a tenant even if you want to move back in. That's why landlords sometimes pay tens of thousands of dollars to their tenants to get them agree to leave if they have a rent controlled unit. Even if the tenant stopped paying rent or broke some other part of the lease, an eviction can take over a year - and you're not getting paid for that time and you don't get to use your house.

[stcredzero]

Surely a management company would happily handle all that hassle and provide a secondary income stream.

Sounds like an opportunity here! The Chinese market for "stores of value" is quite high! There are tons of largely empty high-rise condos in China for this very reason. What about a company that has the connections and know-how to smooth over the transactions, then puts management into place to get AirBNB/rental income?

[falcolas]

Renting a home devalues it through normal wear and tear. We see this during housing price drops in our local housing market (Montana) as well. The investors would rather a house sit empty than rent it or sell it at a lower price.