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Hellbent

Businesses in a recession

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During a recession, businesses lose business--in order to cope--they may lower prices--but they will still hurt and many may go under--yet the landlords for those businesses--do they lower the rent to help compensate for the economic downturn? They should! By doing so, they would help mitigate the business going under. It's in their best interest to keep the business from going under so that they don't have an empty lot where they cannot collect rent. And who knows when they'll be able to find another tenant in a bad economic time?

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Hellbent said:

During a recession, businesses lose business--in order to cope--they may lower prices--but they will still hurt and many may go under--yet the landlords for those businesses--do they lower the rent to help compensate for the economic downturn? They should! By doing so, they would help mitigate the business going under. It's in their best interest to keep the business from going under so that they don't have an empty lot where they cannot collect rent. And who knows when they'll be able to find another tenant in a bad economic time?


Yep. And?

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Except landlords don't lose much money from owning an empty lot. That's why you see so many around. They raise the rent there so that only big businesses can afford them, and the local businesses all get driven out. But the big businesses only want so much land and the land lords are greedy, so the lots stay open for years. That has been a problem long before there was a recession.

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Yeah, and every month the business owner will keep telling them "Business is getting worse, I can't afford the full rent, can you give me a break this time? I swear this tenth time is the last time it'll happen" Eventually the land owner won't be making enough off rent to cover property taxes, the business will slowly go under, and everyone's screwed. You have to set limits, otherwise it'll keep getting pushed further and further. Yeah, maybe out of the kindness of your heart give them a break for a month or two, but people will take a yard if you give them a foot. It might be a better idea to meet your obligations than to offer up excuses. And honestly, if your business can't make enough money to make lot rent, you're probably doing something wrong.

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Jello said:
And honestly, if your business can't make enough money to make lot rent, you're probably doing something wrong.

Heh, that may be right sometimes and also a nifty sentence for landowners to wash their hands with, but the more widespread the problem, the more it depends on circumstances beyond the direct responsibility of individuals.

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Property development and management companies are among the ones that have typically suffered worst of all during the recent crisis, due to their reliance on credit. So they may be less capable of absorbing a further loss of revenue than their tenants are.

Indeed, you could turn it on its head, and say that businesses in sectors that are suffering less than others (e.g. consumer staples, healthcare) should be willing to pay bigger rents to help the property management companies survive this difficult period. Not gonna happen, of course.

As an owner of a company whose profits are up (due in part to the stronger USD vs GBP), I would be happy to do such a thing. But sadly we don't rent any premises. ;)

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Jello said:

Yeah, and every month the business owner will keep telling them "Business is getting worse, I can't afford the full rent, can you give me a break this time? I swear this tenth time is the last time it'll happen" Eventually the land owner won't be making enough off rent to cover property taxes, the business will slowly go under, and everyone's screwed. You have to set limits, otherwise it'll keep getting pushed further and further. Yeah, maybe out of the kindness of your heart give them a break for a month or two, but people will take a yard if you give them a foot. It might be a better idea to meet your obligations than to offer up excuses. And honestly, if your business can't make enough money to make lot rent, you're probably doing something wrong.

I'm not saying you don't make some good points, but this has little to do with the OP. He wasn't suggesting landlords do this out of the kindness of their hearts, but rather, to avoid being in a situation where they have no renter, and thus no income on the lot at all.

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Aliotroph? said:

Property taxes are unethical.


YOU MUST BE ONE O' THEM GODLESS LEFTYS WHAT WOULD YOU KNOW ABOUT ETHICS WITHOUT A GOD TO DICTATE THEM

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Aliotroph? said:
Property taxes are unethical.

Does this have something to do with your title, or is there some reasoning behind it?

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I have the feeling that the economy has actually stabilized if it hasn't started to recover already. Last year, I knew all kinds of people who were losing their jobs and such, this year, I know a lot of people who have found jobs and only one or two people who have lost them. All the businesses seem to be busier. I know my work has seen a lot more business. This time last year we were completely dead for like two or three months straight. This year we're busy as Hell. I think the whole "the economy is fucked and it's getting worse!" that you hear on the news and everywhere is the businesses and the like saying bullshit so they can justify dropping wages and overcharging for stuff. I know my job has been pulling all sorts of bullshit with pay (like they decided not to give me a raise this year and lied to me that they did) and have basically been forcing more work out of us for less pay. It's really fucked up the kind of policies they've been pulling out of their asses and I'm going to fucking quit because I can't stand it anymore.

Nomad said:

YOU MUST BE ONE O' THEM GODLESS LEFTYS WHAT WOULD YOU KNOW ABOUT ETHICS WITHOUT A GOD TO DICTATE THEM

More like Republican. They're the ones that hate property taxes. Note: property taxes don't effect the poor at all. The real unethical thing is having both sales and income taxes. IOn such a system, everyone and everything is taxed TWICE. Just think about it. I'm glad I live in a state that doesn't support that. I still have to pay federal income, though. :|

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Hellbent said:

During a recession, businesses lose business--in order to cope--they may lower prices--but they will still hurt and many may go under--yet the landlords for those businesses--do they lower the rent to help compensate for the economic downturn? They should! By doing so, they would help mitigate the business going under. It's in their best interest to keep the business from going under so that they don't have an empty lot where they cannot collect rent. And who knows when they'll be able to find another tenant in a bad economic time?


That depends.

Typically, utility costs and property values fluctuate, but they also have to pay BIG taxes on the lot, and the landlord needs money to keep the enterprise afloat, as well maintanance of the property, and buildings.
Could they go down? Since everything has dropped, except the taxes, probably, but vacant lots, office buildings, or space, generates no revenue, and that revenue has to come from somewhere, so the inflated rent thety charge kicks in at this piint, to keep the whole system in check, to a degree. If there are too many vacancies, rent goes up for those that still are renting, and ultimately, the park goes bankrupt, and the buisnesses have to move out.
Not so cut and dry, really. It mostly depends on the landlord, whether thety can afford to do lower on rent, or are greedy slumlords.

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