It’s hard to believe that so many investment properties are being left empty long-term, but the reality is that some big developers and speculators are much more interested in long-term land value increases than they are in rental revenue.
Investors buy up homes in areas where they know the land value is likely to rise steeply due to gentrification. For this class of mega-wealthy investors, getting $40k or $50k a year in rental revenue is chump change compared to the millions of dollars they make from rising property values when their site is rezoned from low-density to high-density.
The federal tax system encourages these wealthier investors to leave places empty because they can claim tax deductions regardless.
The commentary from the property industry spokesperson was woefully misleading. We’re not talking here about owner-occupier homes where someone might be stuck overseas while travelling. We’re talking about investment properties that don’t have tenants, and aren’t even being advertised for rent.
