Breakeven opportunites are closer than you think

[Carlsbadliving]

F-S-D,
I understand that many of our problems have come from having a non-responsive homeowner. But on several occasions we will contact AHP to put in an order. A week goes by and we call the same person again and they don’t even remember having the conversation with us. It would be different if they said that they were waiting to hear back from the homeowner, but instead they say “what did you want again” or “you called here last week?”.

In regards to the rent increases: if it is up to the greedy landlord what role does AHP have in helping them set it. I’m an existing tenant and the landlord (from Texas) says raise the rent 15%. At what point does AHP say that’s out of line and not representative of the rental market in the area?

I just think that AHP has gotten too big and doesn’t seem to care if a few tenants get treated poorly or mishandled here or there. Especially if they aren’t having any problems renting homes.

Just the perspective from this lowly renter…

[bob007]

i do not think home prices will undershoot below the fair market value.

[(former)FormerSanDiegan]

Carlsbad –

I understand that you’ve had a bad experience with AHP. Perhaps they are understaffed, or too big. I will send my tenant a 3-4 question survey.

AHP does provide a recommendation on rental rates at the end of the lease … and since 2000 they have always (OK, 3 times, not much of a sample size) recommended for me to keep the same rate.

If the owner tells them to raise the rent AHP will do it. The renter will likely leave and the owner will find out what the current market rate is to get a new tenant.

As a side not, I don’t think the term “lowly renter” really applies these days. You are living in a place for about 4% of the current “value” annually. That’s like getting a mortgage of < 3%. Renters are living like kings now. How about "kingly renters" or "queenly renters" ?

[(former)FormerSanDiegan]

oops… typing too much today …

Here’s the rest of the story ..

As a side note, I don’t think the term “lowly renter” really applies these days. You are living in a place for about 4% of the current “value” annually. That’s like getting a mortgage of < 3%. You are now living like King. Perhaps the term "Kingly renters" is more appropriate. (Or Queenly renters).

[smfj]

This paragraph in today’s Wall Street Journal’s front page article “Housing Slump Proves Painful For Some Owners and Builders” reminded me of this thread:

In April 2005, Jennifer Bloom paid about $229,000 for a condominium in Yarmouth Port on Massachusetts’s Cape Cod, where her son planned to live. After his plans changed, Ms. Bloom, a software specialist for a computer company, decided early this year to sell the condo. She initially listed it at $229,000, and then gradually shaved the price to $199,000 as the market weakened. Earlier this month, she gave up on finding a buyer at a price she could bear to accept. Instead, she is renting out the condo for $1,000 a month, which she says is more than $200 below her monthly costs for mortgage payments, insurance, taxes and other items. She says she intends to hold off on selling it until the market improves.

We 20-somethings are a flighty bunch. Not necessarily a deal breaker, just something to include in the analysis.

[Carlsbadliving]

AHP does provide a recommendation on rental rates at the end of the lease …

I think this is where things went wrong in our case. Our house was fairly cheap for the area because it is very rundown. We knew that and felt we could deal with that for the price. When it came time to renew our lease I think that AHP looked at comps in the area and made their recommendation, which was a substantial rent increase. Well guess what, they never once came by to look at the house. They didn’t know that it had been at a lower price than the rest of the area for a reason. It just seemed like they didn’t take the time to figure out the situation.

[Daniel]

Since we’re on the “breakeven opportunities” topic, I’d say that Ms. Bloom isn’t doing too bad on her Cape Cod condo. She could do worse in San Diego, I’m sure.

[(former)FormerSanDiegan]

Carlsbad –

I concur, they are large enough to have per-square-foot rates over large swaths of the county. I’m sure they provided the equivalent of a zillow market eval for rent.

[190pounds]

Pretty cool to look back at this thread. I first found out about the GO Zone thanks to it.

After calling every brokerage I could find in the GO Zone I setteled on the guys at http://www.gozonegateway.com

I just closed on a beautiful investment in the Biloxi area (didn’t get damaged by Gustavo, thank God). I’m amazed by the tax break I’m going to get. Thanks to whatever your name is for mentioning this area a couple of years ago.

[190pounds]

Pretty cool to look back at this thread. I first found out about the GO Zone thanks to it.

After calling every brokerage I could find in the GO Zone I setteled on the guys at http://www.gozonegateway.com

I just closed on a beautiful investment in the Biloxi area (didn’t get damaged by Gustavo, thank God). I’m amazed by the tax break I’m going to get. Thanks to whatever your name is for mentioning this area a couple of years ago.

[190pounds]

Pretty cool to look back at this thread. I first found out about the GO Zone thanks to it.

After calling every brokerage I could find in the GO Zone I setteled on the guys at http://www.gozonegateway.com

I just closed on a beautiful investment in the Biloxi area (didn’t get damaged by Gustavo, thank God). I’m amazed by the tax break I’m going to get. Thanks to whatever your name is for mentioning this area a couple of years ago.

[190pounds]

Pretty cool to look back at this thread. I first found out about the GO Zone thanks to it.

After calling every brokerage I could find in the GO Zone I setteled on the guys at http://www.gozonegateway.com

I just closed on a beautiful investment in the Biloxi area (didn’t get damaged by Gustavo, thank God). I’m amazed by the tax break I’m going to get. Thanks to whatever your name is for mentioning this area a couple of years ago.

[190pounds]

Pretty cool to look back at this thread. I first found out about the GO Zone thanks to it.

After calling every brokerage I could find in the GO Zone I setteled on the guys at http://www.gozonegateway.com

I just closed on a beautiful investment in the Biloxi area (didn’t get damaged by Gustavo, thank God). I’m amazed by the tax break I’m going to get. Thanks to whatever your name is for mentioning this area a couple of years ago.

[peterb]

Time to start buying!!! Oh yeah, historically rents dip down in a recession around 5%. Also, unemployment is increasing and a lot more defaults are coming onto the market. Lending standards are getting tighter. This all spells another leg down in the RE market. You may want to check your math on break-even analysis when your asset is decreasing in value? Even if you’re lucking enough to actaully break-even on a cashflow basis, what will your return be if your asset decreases by another 20%?
These are very real possibilities in this market.

[peterb]

Time to start buying!!! Oh yeah, historically rents dip down in a recession around 5%. Also, unemployment is increasing and a lot more defaults are coming onto the market. Lending standards are getting tighter. This all spells another leg down in the RE market. You may want to check your math on break-even analysis when your asset is decreasing in value? Even if you’re lucking enough to actaully break-even on a cashflow basis, what will your return be if your asset decreases by another 20%?
These are very real possibilities in this market.

[Author]

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