White Elephant | Propertylogy

White Elephant

By on February 20, 2019

In everyday language, we use the term white elephant to refer to something that is pricey and takes up considerable space that is left in the corner of a room unused.

It is as if the buyer bought it just to have it instead of needing to use it.

Such as a $500 futuristic-looking vacuum cleaner for someone who hardly vacuums.

In real estate, a white elephant usually refers to a property that is purchased at a high price, expensive to maintain, but it’s value does not justify the purchase price and maintenance expenses.

A buyer of such a house, which is not necessarily a luxury property, probably bought it off emotions and to use it as a trophy possession.

He does not live in the premises as a residence, and is not comfortable to rent it our or have too low a rental value to make up for the costs of maintenance.

One such example is historical buildings. They can have a gorgeous classic look, but few tenants or landlords would want to live in them as they can be sorely lacking in necessities.

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