
How to Profit from Rising Rents: Build Apartments - prostoalex
http://www.wsj.com/articles/how-to-profit-from-rising-rents-build-apartments-1452614388?mod=e2fb
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legulere
How to profit from rising rents even more if you already own apartments:
Prevent new apartments from being built

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andy_ppp
Buy land in the good places and sit on it until the land and property has gone
stratospheric. Aim to never increase supply to the level the market needs to
maintain prices; instead constantly force up asset prices forever until you
essentially have two classes of people, renters and owners. Keep splitting the
housing into smaller and smaller units, make the renters share housing,
constantly increase prices at more than the rate of inflation. Only sell newly
created housing at a huge premium above market rate.

Buy more land and more property. Rinse repeat.

Also
[https://www.ted.com/talks/thomas_piketty_new_thoughts_on_cap...](https://www.ted.com/talks/thomas_piketty_new_thoughts_on_capital_in_the_twenty_first_century?language=en)

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randyrand
This is bad advice.

Unless you own a significant fraction of the market, you'd make way more
developing the second property than sitting on it.

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andy_ppp
You wouldn't make more if at the same time everyone started developing
properties... If we build enough properties to meet demand the price goes down
which means there is never any incentive to do this. I'm saying scarcity is a
very effective model for increasing prices.

I mean in London you need a special mortgage when buying new build housing
because usually the price you pay is far in excess of the market value - you
can literally make a 20% loss if you sold it in the first year or two! Of
course as we all know housing always goes up in value and that's built in to
the price!!

It feels as though you could build a huge number of houses in London but it
never comes close to matching the required supply. In every other industry you
would assume everyone should have a car and everyone should have a tv or
computer, but within reason, everyone who wants to should be able to live in
New York or London? We think that is insane.

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jedberg
This works for a while, until there is enough inventory to meet demand and
then (gasp!) rents become affordable.

Assuming you build the place efficiently, you should still be able to make a
profit, but that's the trick. A lot of developers right now are building
luxury apartments with granite and fancy fixtures which look great now but
will need to be replaced in a few years when they get worn out from
mistreatment and don't look so good anymore or worse yet aren't in fashion
anymore.

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varelse
Except in places like SF where the victims themselves band together to
maintain low inventory so they can justify their rent and eviction controls.
And all because a minority of long-term residents live at below market rates
and raise the hopes of the newbies that one day they too can be of the "renter
gentry(tm)."

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jedberg
Absolutely (although you got the motivation a bit wrong). The renters who are
against new housing are doing it solely out of lack of intelligence/education
-- they don't understand that more housing means poor people can rent more
housing, even if everything that gets built is a luxury apartment, since
eventually equilibrium will be reached.

The owners who are against growth, who are the majority of those against
growth, are doing it simply to prop up their real estate prices.

I'm probably one of the rare homeowners who is _for_ more housing. I think my
house is ridiculously overpriced and should cost 1/2 as much, and would if
they would allow people to build. I don't care though because I bought my
house to live in, not to retire with.

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bsbechtel
No one has commented yet to instead start your company where rent is still
cheap.

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arcticfox
Speaking of cheap rent, I'm in São Carlos for a few days and it seems awesome
for startups. I'm considering moving here.

Off topic: actually, I'm here due to a thread about the city you started on HN
some months ago! I have some more questions about how São Carlos has worked
out for you - if you'd be free to meet and discuss, please email me (I can't
find yours anywhere unfortunately):

charles dot offenbacher at gmail dot com

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bobby_9x
In most cities that have rising rents (like SF), government intervention
actually prevents new apartments from being built.

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rw2
Can we not post anything with paywalls or just give the non-paywall link.

This makes it inaccessible for most HN users.

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prostoalex
This comes up every now and then, and the moderators' response so far was to
focus on the content. Because of country restrictions, IP restrictions,
publisher's cookie policies, monthly free article quotas, per-article
exemptions, corporate (or personal) subscriptions and availability of the
article through Google search (or "web" link) it's hard to say what percentage
of HN readership can see the contents.

The worst that can happen is that articles from a heavily paywalled site
(ft.com, nature.com, theinformation.com) don't seem to get upvoted much,
meanwhile articles from not so restrictive sources (wsj.com, nytimes.com) do
make it to the front page occasionally, so I'm assuming a good portion of
those votes come from readers actually capable of reading the full contents.

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anoonmoose
With the NYT, I can just hit CTRL-SHIFT-N and get around the paywall. With the
WSJ, not so much- the directions given in this thread don't even seem to work.

