As someone else pointed out in this thread, you would have made a lot more money dumping $70,000 into S&amp;P index funds in 1975 than buying a $70,000 bay area house at the same time and holding it empty to 2016.<p>So I disagree with your premise, no rational investor purchases houses and leaves them empty. And the ones who don&#x27;t are providing a valuable economic service by assuming all capital loss risk, interest rate risk, maintenance, opportunity costs, etc. involved in owning property in exchange for a tenant&#x27;s cash.