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RolfAndreassen comments on Open Thread, June 2-15, 2013 - Less Wrong
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Hang on, his return on his capital may be the risk-free rate plus risk compensation, but Omid's $1000/month is not the landlord's capital, it's his revenue! Unless you have a good way of mapping rent payments onto the amount of capital tied up in the building, I don't see how your answer is useful.
Revenue from a renter is simply investment income, and we'd expect the income from an apartment-bond to, like any other investment, be squeezed down to equal other investments after adjusting for risk and diversification and taxes etc.
Yes. I do not see how this answers my objection. You still have not provided a way of dividing up the $1000 into money used for maintenance and money taken out as profit, which was the original question. All you've said is that the second component should be equal to 3% or so of the investment; since we have no idea what the investment was, this is unhelpful.
The investment income is the revenue from the renter less expenses in running the building.