Why do people invest in downtown Boston?

[Eric Girard]

I understand buying older buildings and converting them to condominiums, I understand buying underpriced properties but why do people invest in market rate condos with negative cash flow? Is it just a bet on appreciation?

[Joni Shehu]

@Eric Girard there's many reasons.

One being, using it for tax benefits through cost segregation where one reallocates assets in a property to personal assets and it allows owners to take accelerated depreciation.

For example a $2m building with negative cashflow can mean a $500k depreciation (and tax deduction) on year 1. Pretty great deal for specific buyers.