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Comment by busterarm | Hacker News Reader

I worked doing data entry in my teen years for a tax certiorari law firm in NYC and I can tell you that one of the favorite tricks of multiple-building owners is to have a mostly vacant building (or several) as a tax sink. Most of the time they would put their family in the units at no charge and write off the whole building to offset their others.

This is especially true of buildings they were holding for sale to property developers.

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Wouldnt they make more money overall renting it although? There is only so many free units you can give your family and friends.

They're probably just holding onto the building to sell it to someone else. The next buyer, in turn, is only buying it to sell it for even more. Tenants may even be considered a liability. They don't want to manage a property, they want to hold an asset as an investment.

This only makes sense if tenants are a liability, because you get property value increase + rental income. As long as renting doesn't decrease the property value by more than the net rental income there's gotta be something else going on.

And if you don't want to manage a property, property management companies exist for that exact reason.

Tenants ask for things that family might not necessarily. Also you can leave most of the building in poor shape while keeping up the units you're letting family stay in.

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