Hang on, his return on his capital may be the risk-free rate plus risk compensation, but Omid’s $1000/month is not the landlord’s capital, it’s his revenue! Unless you have a good way of mapping rent payments onto the amount of capital tied up in the building, I don’t see how your answer is useful.
Revenue from a renter is simply investment income, and we’d expect the income from an apartment-bond to, like any other investment, be squeezed down to equal other investments after adjusting for risk and diversification and taxes etc.
Yes. I do not see how this answers my objection. You still have not provided a way of dividing up the $1000 into money used for maintenance and money taken out as profit, which was the original question. All you’ve said is that the second component should be equal to 3% or so of the investment; since we have no idea what the investment was, this is unhelpful.
The investment income is the revenue from the renter less expenses in running the building.
Hang on, his return on his capital may be the risk-free rate plus risk compensation, but Omid’s $1000/month is not the landlord’s capital, it’s his revenue! Unless you have a good way of mapping rent payments onto the amount of capital tied up in the building, I don’t see how your answer is useful.
Revenue from a renter is simply investment income, and we’d expect the income from an apartment-bond to, like any other investment, be squeezed down to equal other investments after adjusting for risk and diversification and taxes etc.
Yes. I do not see how this answers my objection. You still have not provided a way of dividing up the $1000 into money used for maintenance and money taken out as profit, which was the original question. All you’ve said is that the second component should be equal to 3% or so of the investment; since we have no idea what the investment was, this is unhelpful.
The investment income is the revenue from the renter less expenses in running the building.