> Because of the additional risks of squatters, landowner will either have to take additional security measures (and make up the costs with higher rent) or accept the risk of squatters (and make up that risk with higher rent). In either case, the rent getsor expensive.
When renting becomes less profitable, real estate prices fall as landlords want to get rid off their bad investments. That means people can buy instead of rent, which means more rentals become vacant as renters become owners, which means that rents go down.
> and make up the costs with higher rent
This is not how it works. Landlords will always extract maximum rent possible from tenants.
> Landlords will always extract maximum rent possible from tenants
Landlords are competing in a market. The maximum possible rent has to do with how much the rest of the market is charging. That in turn is capped from above by how much a would be landlord would pay to buy a unit and start renting it out. If that price goes up, then landlords can charge more.
There is also a maximum amount that people can pay, but they have little choice but to pay whatever the market is charging, or else live on the street.
Renters are already paying the maximum they can. No landlord would let that juicy money go unmolested.
If landlords prefer to let their investments sit empty instead of selling, because their profits from renting aren't enough, then that is a foolish decision. But you shouldn't annihilate a whole nation because of such folly.
When renting becomes less profitable, real estate prices fall as landlords want to get rid off their bad investments. That means people can buy instead of rent, which means more rentals become vacant as renters become owners, which means that rents go down.
> and make up the costs with higher rent
This is not how it works. Landlords will always extract maximum rent possible from tenants.