> That would be true if rent was a percentage on top of cost. But it is not, it is whatever maximum renters are willing to pay.
Not exactly, rent price is either the max renters are willing to pay, or, a small percentage on top of ownership costs, whichever is higher.
In the case of the latter, if nobody shows up willing to pay the higher price then the rental unit is removed from the market. It won't make the price go down because the owner won't rent it out at a loss.
Not exactly, rent price is either the max renters are willing to pay, or, a small percentage on top of ownership costs, whichever is higher.
In the case of the latter, if nobody shows up willing to pay the higher price then the rental unit is removed from the market. It won't make the price go down because the owner won't rent it out at a loss.