Here the bank cares less about annual income than future income.

Keeping it vacant only impact current income, lowering rent impacts future forecasts.

> Keeping it vacant only impact current income, lowering rent impacts future forecasts.

Does it though? Suppose you can't find a tenant right now because the market is soft but is predicted to improve in a few years. If you leave the unit vacant, you lose money right now. If you rent it out with e.g. a 3-year lease, you make more for the next 3 years than you would with a vacancy, and if the market price has increased by then you can increase the rent on the unit and either get it from the current occupant or the one you get to replace them in the high demand market when the higher rent causes the low-paying tenant to not renew the lease.

So taking a tenant now only improves prospects (you fill a current vacancy) with no negative impact on future returns. The only thing it does is imply that current rents are lower than before and future rents might be too, but a vacancy implies that even more strongly.

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bandrami an hour ago | parent [-]

Humans are not Pareto efficient.

If my wife and I are at the airport, and the gate agent offers me (and only me) an upgrade on the flight, your logic says I should take it since that's strictly better than both of us flying economy.

	▲	AnthonyMouse 39 minutes ago \| parent \| next [-]
		Business tenants know perfectly well that when it comes time to renew a commercial lease and local rents have increased, the renewal rent is going to approximate the current market price. The landlord doesn't want you to to leave but only to the extent that finding a new tenant costs more than the discount against the current market price they'd have to give you to stay.
	▲	schlipity an hour ago \| parent \| prev [-]
		You should take it and then switch seats with your wife. Happy wife, happy life.