As daily commutes go, I have nothing to complain about when I point my car toward Sovereign HQ each morning. The traffic congestion on Interstate 95, South Florida’s main artery, is horrendous. So I take the scenic route, the coastal beach road known as A1A.

The views of the Atlantic Ocean are nice. But more recently, I enjoy the drive for a different reason. It’s a ringside seat to the extravagance of the now-deflating luxury housing bubble I warned about three months ago. Recent data point more ominously to a serious problem in this sector.

Each day, my drive on A1A takes me past what is the single most expensive new home for sale in the United States: Le Palais Royal, under construction for the last five years.

Situated on 4.4 acres of beachfront, the “spec mansion” features the Atlantic Ocean as its backyard. The front yard is a nearly 500-foot deep-water expanse of the Intracoastal Waterway – perfect for even the largest private super yacht.

The mansion’s soaring front gates, accented in 22-karat gold leaf, make it sort of hard to miss as you drive by. Just beyond the gates is a 60,000 square foot home with 11 bedrooms, 17 bathrooms, an 18-seat IMAX home theater (with its 50-foot-wide screen), and a 30-car subterranean garage. The building plans call for a second phase on the vacant beachfront lot next door. That’s where the ice-skating rink, go-cart track, bowling alley and private nightclub are supposed to go.

And it can all be yours for just $159 million.

But the tide of money fueling the purchase of luxury homes, big or small, is receding as we speak.

Luxury Homes: The Next Real Estate Collapse?

Largely ignored in the holiday rush was the news that luxury home prices fell 2.2% during the third quarter – the first such decline in nearly four years.

According to the Redfin real estate brokerage, wealthy clients are stepping back out of fear from stock market volatility, and are worrying about tying up too much of their wealth in non-liquid assets, especially if another real estate collapse appears.

The decline is even more notable because luxury homes serve as something of a bellwether for the rest of the “non-lux” real estate market (which still rose just under 4% for the same period).

The original housing-bubble stocks of a decade ago might offer a clue on the timing. Shares of Toll Brothers (NYSE: TOL), the nation’s largest builder of luxury homes, peaked in July of 2005 before starting their precipitous decline. But the stock prices of builders focused on the low- and mid-priced ends of the market stayed strong – at least at first. For instance, the shares of Lennar Brothers (NYSE: LEN), one of the biggest homebuilders in the country, didn’t crack until April of 2006.

Interestingly, Toll Brothers’ shares today are down nearly 25% from their post-recovery highs (to the lowest price in 13 months), while Lennar shares are just starting to break down.

California Dreamin’?

Chinese buyers have been key players in the run-up of America’s luxury home prices. And their influence is felt most strongly in California and the San Francisco Bay area, the hottest of America’s real estate markets this go-round.

Not coincidentally, it appears Chinese buyers may now be pulling back there as well, possibly ushering in the next real estate collapse. Home sales in California fell 20.5% in November – more than twice the monthly average (it’s traditionally a weak month prior to the end of year holidays). October’s home sales also fell a little over 5%, while dropping 1.5% in September.

For now, the real estate community appears to be dismissing the collapse of sales as the result of changes in new loan disclosure rules by the Consumer Financial Protection Bureau, and what is usually a softer seasonal period for home sales anyway.

I don’t blame them. As a media consultant once told me back in my reporting days, “Never let too many facts get in the way of a good story.”

But the “Chinese buyers” real estate gravy train is grinding to a halt fast. Last summer’s 40% decline in the Shanghai Composite Index should have been the first clue. The second was the relentlessly positive “it’s just temporary” narrative spun by so many brokers and property developers who don’t want the ride to end. The third clue may be upon us here at the start of 2016 as the Shanghai index lurches lower yet again.

So what’s it all mean to you?

As Jeff Opdyke has warned, don’t get comfortable with the Federal Reserve’s spin on things. As Chinese buyers retreat from American real estate, it kicks out yet another leg of support for the U.S. economy.

When it comes to investing in a commercial property in Australia, you have a wide range of options. However, you need to choose the best one.

Considering the increase in prices of warehouses, shopping centres, offices and new developments, you might be looking for ways to get finances in order to acquire a commercial property.

When a business activity is conducted on a real estate property, it is referred to as a commercial property. The term can also refer to land that is bought to obtain profit.

To get various financing options, you can consult stamfordcapital.com.au. They are the leading experts in commercial property financing solutions and offer a broad range of investment options.

Commercial Property Loans

Most of the times, commercial loans become a necessity for owners of small brands and businesses who cannot afford to buy large or expensive properties.

A unique set of factor and rules affect commercial property loans and these determine the amount you can borrow and the time required for that amount to be paid back in instalments. Commercial loans normally have higher fees than home loans. The pricing and interest rates also vary.

Amount You Can Borrow

For home loans, buyers can borrow almost 80 % of the property’s price. On the other hand, while getting finances for a commercial property, you would have to pay far more cash as the first instalment.

Home loans can also go down when the investors lose their interest in the property market, but commercial loans are difficult to tumble.

Property Development Finance

Getting finances for developing a property is normally a short-term loan. You can use that amount to refurbish and repair an existing property or develop a completely new building.

The instalment period can stretch up to two years but you might have to pay up to 70 % of the total value in advance.

Portfolio Finance

Investors who have multiple rental properties are eligible to take this long-term business loan. They can pay the whole borrowed amount as a single loan but that depends on the lender. The rental income determines the serviceability of portfolio finance.

Bridging Finance

Investors and property developers often opt for this short-term financing solution as it is an easy and quick method to purchase a piece of land. It is like a temporary loan which will get your work done while you look for a permanent source of finance.

That is why the word “bridge” is used in this term as it helps you by forming an easy and alternative path. Many times, lenders use bridging finance to buy and renovate a property. It can be considered as some other form of property development finance.

Some people also make use of a bridging loan for a short-term commercial purpose as they have a clear exit strategy.

The choices that we have described are some of the commercial property financing options in Australia.

There can be many different styles of homes found in the Inner west of Sydney, but the most popular ones, perhaps, are the California Bungalows. The Cal Bung (for short) are homes that were popularized in 1920. They were originally bought in from Pasadena, California, in 1916. The Australian real estate agent who got the first ones assembled, did so for the Rosebery suburb of Sydney.

This style of home became so popular in the 1920s that there were hardly any other style of home constructed in Sydney, other than the widely acclaimed Cal Bung.

There are many Californian bungalows in Sydney

Since its popularity in the 1920s, Sydney has had a love affair with these Californian Bungalows. Films and magazines popularized this kind of bungalow in the 1920s but the real reason they were built were because they were cost effective to build. The uniformity in approach to constructing these houses also meant that they could be manufactured easily in bulk, contributing to their popularity.

In the suburbs of Sydney, you will find many Cal Bungs just sitting out there in the open. The bungalows may seem worn out because they’ve been here for so long but don’t let that undermine its value. The Cal Bung can be refurbished and renovated, and with some interior design and modern styling, it can be a marvel to look at.

Here are some styling tips for these types of homes in Inner West Sydney,

Lightening Them Up with Extensions

The extensions to these wonderful homes can give you the chance to have light enter the home more naturally, allowing indoor and outdoor areas for entertainment to be illuminated greatly. The extensions can allow you to make your home more productive and look amazing with a little bit of renovation.

Remember that the home is a classic, and one can be successfully transformed with the right renovation project. You don’t have to go it alone, as professional interior designers can give you a bit of perspective to create that Advantage Property Styling and look that you want from the Cal Bung.

Double Storey Renovations

This is yet another way to add to your property’s value and to make it pop out from the rest of the homes. You can change the floor plans and add renovate your kitchen, adding lighting fixtures to match your home’s ambience and style.

You may even have custom wardrobes added to your Californian Bungalow to make a style statement. Christophe Living helps you make the decision that’s best for your needs when it comes to double storey renovations. Just remember to keep everything in line with and complimenting the style of your Cal Bung, including the stairs leading to the second storey.

Simplicity and Cleaning Up

Often times simpler, is better. This can be applied to Californian Bungalows in Inner West Sydney. A little bit of touch up on the exterior paint of the house and getting the landscaping to compliment that can go a long way when it comes to styling your Cal Bung.

Sydney is a wonderful place to buy property and rent it out to other people or sell it. However, sometimes the rental demand might increase while at other times you won’t be able to find any tenants.

Low auction clearance rates have an effect on the rental demand in Sydney. Let’s discuss the definition of a clearance rate before we move on to the main theme of this article.

Understanding Clearance Rate

A clearance rate is a major element of the property market. A low or high clearance rate tells if the market is favourable for the buyer or the seller. These rates are expressed as percentages and denote how many properties are at auction which are either sold or cleared.

A high clearance rate, between 75 to 80 % shows that the market is favourable for the sellers. It indicates that the available housing stock is low and the buyer demand is high.

On the other hand, a low clearance rate (almost 60 %) shows that the market is favourable for the buyers. It indicates that the house prices are declining and there is a low auction interest.

If you are looking for a property, you can use the service of Laing&Simmons.

Housing Demand in Sydney Was Strong

Two years back in 2016, the demand for houses in Sydney was booming. Auction clearance rates as high as up to 84 % were also set.  Almost 7 million dollars were paid for a four-bedroom house that was sold in auction. However, this meant that banking regulator APRA would make lenders to tighten credit to investors.

At that time, high auction clearance rates meant that the sellers could take any price that they wanted. Buyers were willing to buy properties at high prices.

Auction Clearance Rates Have Now Dropped in Sydney

Every region in Sydney is affected by the latest tightened lending restrictions. This has caused a huge increase in housing supply. Last year, home owners could sell anything with a roof over it. Now, they are trying hard to sell houses even built in prime locations.

Recently, auction clearance rates in Sydney have undergone various changes. These changes mainly range from 51 to 63 %.

The low auction clearance rates have made the market strong for the buyers. Buyers are looking for the cheapest possible options. On the other hand, renters are worriedly searching for new tenants.

Low Auction Clearance Rates and Rental Demand

With low auction clearance rates, the ball goes in the buyer’s court. The home owners are forced to sell their houses on low prices and the buyers are happy to purchase on low prices.

Even big properties with proper fences and a huge garden are being sold on low prices in Sydney. The case was quite different two years back. In 2016, even small properties were highly valued. Now, the rental demand has gone down due to the low

We all make mistakes, but making a blunder while purchasing a commercial property can have long term consequences. A property that just looks good should not be bought without doing proper homework.

Let’s discuss some things you should avoid when you invest in a commercial property.

Don’t Rely on Inflation

You should not rely on inflation to decide whether to buy a property or not. Although the current economic conditions of the location can give you some hint on the value of the property, you should consider other factors as well.

Property buyers should keep in mind that there are some costs related to owning a piece of land such as the maintenance costs and taxes. If you understand this, you can make a wise investment with a bright chance of getting high returns in future.

A good step is to see the bigger picture. Put yourself into the shoes of the person who would buy the same property from you in the future. If you think the property is worth investing in, then you can go ahead and buy it.

The location and condition of the property can decide its value in the coming years so make sure to inspect it thoroughly.

Not Working With a Reputed Company

Companies that have been in the commercial estate market for a few years can guide you much better than new firms in the same industry. These companies are experienced and have gone through several stages of learning which has helped them to become a professional in this field.

If you choose a wrong company, chances are that either you would buy the property at a high price, or the location would not be suitable for selling it in the future, or the condition of the building would be poor. Whatever the case is, it is better to look for a reliable firm for consulting before buying a commercial property.

StamfordCapitalInvestments.com.au is a reputed firm and has the capability to identify excellent investment opportunities.

Examine the Entire Property and Don’t Rush

An initial look of the building cannot provide you the full picture. You need to carefully go through all the different areas of the property to analyse its condition. A building in a poor condition would need repairs which would cost you more than you think.

Moreover, don’t rush into buying a piece of land because it looks “awesome”. Don’t let your emotions cloud your judgment. Sparkling chandeliers, new appliances and other stuff like that should not be your priority. These attractive things do not decide the value of a property.

Spend some time to go through different properties to find the perfect place for you. Compare the sizes and prices of various buildings to get a rough idea about the cost. Investing in a commercial property is a long term move, so make sure that you don’t take it for granted.

Talk about exquisite timing.

Even today, a decade after the fact, the leveraged buyout of Equity Office Properties Trust remains one of the largest of all time: $36 billion for nearly 600 office buildings in New York, Washington D.C. and dozens of the nation’s largest cities.

But in late 2006, some wondered if the billionaire who sold the REIT was being a little rash. After all, the real estate boom was in full swing, and the S&P 500 was primed to hit new all-time highs. “Is he cashing out too early?” asked a Bloomberg headline when the deal was announced.

We all know the answer, of course.

Billionaire Sam Zell deftly sidestepped the coming real estate carnage. Then, with prices at generational lows a few years later, Zell bought hundreds of apartment complexes at dirt-cheap prices.

And today? Well, that’s the ominous part…

Once again, Zell is selling his real estate holdings. Last fall, he unloaded a quarter of his portfolio, buildings totaling about 23,000 rental apartments, to Starwood Capital Group for more than $5 billion.

Zell next sold off apartment buildings in South Florida and Denver, with complexes in Phoenix, Boston and other metro areas expected to be sold before the year is out.

“No one has ever accused me of not being a realist,” Zell told CNBC’s talking heads recently.

Reality Bites

Few things are more real than the threat of rising interest rates. Concerned about the Fed’s late-to-the-party threats and distorted capital markets drunk on years of zero-interest-rate policy, Zell is getting out while the getting is still good.

In the past few months, new-home sales hit their highest level in eight years. Pending home sales rose by the largest percentage gain in a decade.

Even home flipping is back in vogue again. RealtyTrac, measuring 2015 data, estimated a 75% increase in active home flippers – the highest since 2007.

Nationally, the average gross profit on a flipped home was $55,000 – the largest since 2006.

But for the realists like Zell, the widening cracks in the facade are plain to see.

For instance, apartment rent is starting to come down in New York and San Francisco – two of the hottest markets in the country. There is simply too much supply and not enough demand.

A few weeks ago, the head of the Federal Reserve Bank of Boston warned about overheated speculation in the commercial real estate market. “We care about potentially inflated commercial real estate prices,” said the bank’s president, Eric Rosengren, “because they might risk a bout of financial instability.”

Translated from “Fedspeak,” Rosengren was saying: Get out now.

Even those ultra ultraluxury homes in the $100 million and up range aren’t selling. It’s a rarefied market, for sure, but The New York Times recently noted that a record 27 properties, each with a nine-figure price tag, are languishing unsold on the market. According to figures kept by Christie’s International Real Estate, 19 such homes were on the market in 2015 and 12 in 2014.

Late last year, I wrote about one of those massive palazzos here in Florida – the beachside $159 million, 60,000 square foot Le Palais Royal. It’s still for sale.

Perhaps the extra gold leaf they painted on the front security gate will help.

Beware the Peak

I can’t see Sam Zell taking up residence in Le Palais Royal. But then again, he sold his office properties in 2006, and watched the market crack wide open a year later. Now he’s unloading his real estate portfolio again, so, who knows?

If history repeats, Zell just might find his next great distressed real estate bargains in the palatial homes of the (once) superrich – dazzling jewels of the “new” gilded age now past its prime.

Basic Real Estate Statistics Explained

We are going to define some of the basic real estate statistics that get thrown around on a regular basis. To do that, we will use one real estate market, located in Hood County Texas. Even more granular, we will use the single family numbers for homes in Granbury Tx, a small town of approximately 8,000 residents which has seen substantial real estate growth in the past 12 months. It is important when reviewing real estate statistics to use a group of numbers large enough for consistency, but granular enough to tell your story.

The statistics that we will be referencing are true and accurate for the year discussed but are being used to define the real estate statistic itself.

We have chosen Granbury Tx as our example because the growth of the local real estate market there make the statics stand out.

Anytime you are evaluating statistics, especially in real estate, the source of the numbers are extremely important. In most instances, the MLS (Multiple Listing Service) provides the most accurate numbers when referring to real estate. This is because they have all listings by all local real estate brokers in their database. For the sake of explanation of the data, we will be looking at the numbers for home sales in Granbury Tx, directly from the MLS. These numbers are meant to give an example of how to read the statistics themselves. Anytime you evaluate real estate numbers, its important to pay close attention to how the numbers are gathered. In this instance, we will be using ONLY single family properties in the city of Granbury.

Basic Real Estate Statistics

• • Number of Sales – This one is pretty self explanatory. It is simply the number of single family homes sold in a particular month. In January of 2015, they had 51 single family homes sold. One thing to pay attention to when looking at this statistic is are they using the Under Contract date or the day the property actually went to closing. These two dates are usually between 30 and 60 days apart, so its critical that you know which one is being referenced. In addition, many of the homes that get calculated, if you are using the “under contract” number may not actually close! In our example, we are using the number of homes that actually closed. In January of 2016 they had an increase of over 49% which brought the total to 77 from 51. Growth of that level is very seldom ever seen.

• • Sales Volume – Sales Volume is simply the total amount of dollars spent on single family housing within that month. Once again, when reviewing this statistic, its important to keep the property types consistent. If you are comparing two areas to see which one has grown more and you include vacant land in the number for one area, you must include it in the other too. As previously mentioned, our examples only include single family properties. With Number of Sales looking at the units, you would expect the Sales Volume to go up appropriately, but in this instance, it went up even more than the units (by percentage). The total Sales Volume of single family homes in Granbury in January of 2016 was $15,191,500 as opposed to the January of 2015 number of $9,281,915. That is an increase of over 63%. Because the Sales Volume went up at a larger rate than the number of units, this reflects the average home sale being much larger in 2016 than 2015.

• • Months of Inventory – This is a commonly referred to statistic when examining a real estate market. This statistic refers to at the current rate of sales, how long will it take to sell through the existing level of inventory. This reflects the supply and demand for the market. In our example, in January of 2015 the level of inventory was 9 months and in January of 2016 it had dropped to 6 months. That is a 33% drop in available inventory! This means if you are looking to buy a home in Granbury Tx, it will be a little tougher in 2016 as there is less inventory available to buy.

• • Median Days To Sell – This stat simply refers to how long it takes for single family properties to be put under contract. Don’t let the “to sell” confuse you. To accurately show the demand for active homes, you really want to track how long it takes to go “under contract”. The process of acquiring final lender approval, insurance and getting to a closing can vary on a variety of factors. In January of 2015, the Median Days to Sell was 88. That number dropped by over 30% to 61. Once again, this tells you if you are looking for homes in Granbury TX, you better get your offers in quickly as the most desirable homes are going fast!

• • Average Price – This statistic can be derived in a variety of ways. We are going to use it in its most raw form and simply be the Average Price of Homes Sold within that month. Be careful when looking at this statistic printed anywhere as how the user defines the date sold can vary. Needless to say, Average Price can be used for active homes for sale or for the homes that sold. The Average Price of ACTIVE homes for sale is generally a pretty useless number as you can list a home for any price, without any possibility of it ever selling. Many homes listed for sale are at unrealistic prices thus the Average Price of Active homes for sale can fluctuate dramatically and give little insight into the market. You will want to look at the Average Price of SOLD homes. In January of 2015, the Average Home Sale was $181,998 and it jumped to $199,888 in the same month in 2016. This is an increase of almost 10%. This is not a number that truly tells the increase in home values across the board, but simply of the homes sold in that month, what the average was.

• Median Price – The Average Home Sales Price can be skewed by a variety of factors. All it takes is one 5 million dollar home sale to throw those numbers off. To get a better view of the overall increase in value, it can be better to look at the Median Sales Price. Median Sales Price takes the number that is perfectly in the middle. For instance, if you have 11 homes that you are using in your statistic, you would take the sales price of the 6th one. This leaves 5 homes sold higher and 5 homes sold lower. In this instance, they are pretty close as the Median Sales Price increase from January 2015 to 2016 was 9.69%. This shows that we didn’t have the Average Price skewed too much because of an extremely large or extremely small sale.

There are hundreds of ways to look at the same numbers, when referencing to real estate, so be very careful to read the fine print on exactly what numbers they are using. When making comparisons, you will want to make absolutely sure that both are referencing the same property types, dates etc. It like the old saying says… there are lies, damn lies and statistics.

There are really two sides or two strategies to this debate. I lean one way for sure and will explain why but, I am also open about this and understand that other people have goals and strategies that differ from my own. In this article I want to briefly talk about both strategies and then give you some ideas to expand what you are trying to accomplish.

I want to define a long term investor as someone who is purchasing real estate with the strategy to hold onto it for at least 5 years but in most cases much longer. This is a great way to grow wealth and although it can be slow, it will guarantee financial freedom if the strategy is done correctly.

When we discuss lending the staple in the industry is the 30 year fixed rate loan. The advantage to this loan is that your principal and interest payment will remain constant for 30 years even though rents should increase. This loan also comes with the lowest payment in the market helping you to maximize cash flow. I put 30 year loans on my properties whenever possible. (This becomes more difficult as you get more properties which might be a topic for a different article). I like the cash flow because it gives me control and I can choose where to invest it.

The disadvantage to a 30 year loan is that it takes 30 years to pay off the house, assuming you make the minimum payment. If you are a believer in paying off your rentals then a shorter term loan might be a better strategy and will give you the discipline to actually do it. Because interest rates are important to a lot of investors it is important to know you will get a much better rate with a shorter term loan.

My personal belief is that if you are leveraged on your properties you can buy more properties and more properties create more cash flow and more growth. It is the best of both worlds. This is true only IF you are buying quality deals and have reserves and plans in place for the unexpected. As many of you know when I started investing with my wife we would leverage as much as we could and we purchased as many houses as we could. Needless to say that back fired and we lost almost everything. I share this because I want you to know that I understand that leverage creates additional risk. However, if you are purchasing properties that cash flow AFTER vacancies and maintenance there really is not much of a down side.

As you can see I am not a fan of paying off your real estate when you are in your growth strategy period. I believe this strongly for several reasons and have been quoted in major publications sharing my view. I do, however, think you should start paying them off as you get closer to retirement or when you are in a position that income becomes more important than growth. I also understand that many people have a different risk tolerance than me.

There is one thing I want to caution you about. I would not recommend purchasing property on speculation. Again, we learned this the hard way. If you purchase for cash flow, whether you choose to pay off the property or not, you won’t get hurt. If you cash flow and the house decreases in value, you keep it and enjoy the cash flow. If it goes up in value… well, you either keep it to enjoy the cash flow or you can sell it and take the cash. Don’t get caught up on any of the hype. In Denver the big thing right now is the light rail expanding North, West, and Northwest. Several new lines going in could of course increase the value of real estate, but that is speculation and if the market turns or the lines get delayed you could suffer.

In my opinion, if you are trying to grow your money quickly and are less concerned with the income, you should purchase as many properties as you can, especially those of you in Minnesota. Inventory is not as tight as other parts of the county and it is still easy to buy rentals with no down payment. To purchase as many properties as you can you need to leverage as much as you can.

I want to close by sharing one last opinion. Although I am a strong believer in leverage and being smart about it, I understand that it is not always the best way to go. In Colorado specifically, there are not many deals. Travis, Justin and I talk about this frequently. We all want more deals in Denver but cannot find them. If there are limited deals in the areas you want to buy, you need other investment vehicles to put your money. For some that is investing outside your area, which is what I am doing and for some it is paying off your loans, which I am also doing. If you want to buy more but cannot find the deals, by all means focus on paying off the loans. That is much better than leaving your money in the bank doing nothing.

There are no yardsticks to measure the value of a freehold property. This is because evaluating a freehold is not an accurate science. However, you can follow certain guidelines on what you need to take into consideration when valuing a freehold, which is produced by the advisory services that give free advice to leaseholders. You must also take these three factors into consideration:

1. The current value of the property

2. The annual ground rent

3. The number of years currently left on the lease

Also, evaluate the expected percentage increase in property value that results from extending the leases of different lengths, along with forecasted long term interest rates and inflation rates.

Take help from an expert valuer rather than trying to work out a figure all by yourself, to present before the freeholder. An expert valuer will be able to give you the best advice, which will enable you to make a practical offer.

You will find expert valuers online. They will help you with the entire process of negotiation and buying the freehold.

For the benefit of the freehold, most surveyors add a little extra to a property’s value. This is done after comparing it with similar property with the same number of years on the lease but no freehold.

First, approach your freeholder informally, before you serve him with a first notice. This document should include your preliminary offer for the freehold, which starts off the legal process of buying it.

A word of caution. Never produce an initial notice without obtaining an expert valuation. If you make the wrong evaluation in the initial notice you won’t be able to take back the offer. After the initial notice, wait for the freeholder to reply to it with a counter notice by a date that you have given. The freeholder must be sanctioned at least two months from the date the initial notice is served.

If the freeholder is not sending his counter notice within this period, the leaseholders can take matters into their hands. They can apply for a vesting order at a court. It is now up to the court to move the freehold to the leaseholders. So freeholder’s should respond on time to the initial notice for their own benefit.

Buying a share of freehold will make little profit if you already have had a decent length lease. You would still have to give the same authorized costs as someone with a short hire, but would lead to a drop in the value of the property.