You’d have to be an idiot to buy a house

[SD Realtor]

Dan I have two rental properties and my operating costs are not even close to 45% and I am cash flow positive on one of them and breaking even on the other one.

Do you have rentals and if so what are your operating costs? Perhaps I am an outlier on the statistic you are quoting?

[danthedart]

We have a family business that owns few apartment complexes in the North Park Hillcrest area. Our operating costs are generally in line with the 45% statistic. The 45% statistic is from the annual income expense analysis put out by the Institute of Real Estate Management and National Apartment Association.

Perhaps you haven’t had any vacancies for awhile? Perhaps there haven’t been any repairs for awhile? Do you hire someone to manage the property or are you managing it yourself?

[danthedart]

We have a family business that owns few apartment complexes in the North Park Hillcrest area. Our operating costs are generally in line with the 45% statistic. The 45% statistic is from the annual income expense analysis put out by the Institute of Real Estate Management and National Apartment Association.

Perhaps you haven’t had any vacancies for awhile? Perhaps there haven’t been any repairs for awhile? Do you hire someone to manage the property or are you managing it yourself?

[danthedart]

We have a family business that owns few apartment complexes in the North Park Hillcrest area. Our operating costs are generally in line with the 45% statistic. The 45% statistic is from the annual income expense analysis put out by the Institute of Real Estate Management and National Apartment Association.

Perhaps you haven’t had any vacancies for awhile? Perhaps there haven’t been any repairs for awhile? Do you hire someone to manage the property or are you managing it yourself?

[danthedart]

We have a family business that owns few apartment complexes in the North Park Hillcrest area. Our operating costs are generally in line with the 45% statistic. The 45% statistic is from the annual income expense analysis put out by the Institute of Real Estate Management and National Apartment Association.

Perhaps you haven’t had any vacancies for awhile? Perhaps there haven’t been any repairs for awhile? Do you hire someone to manage the property or are you managing it yourself?

[danthedart]

We have a family business that owns few apartment complexes in the North Park Hillcrest area. Our operating costs are generally in line with the 45% statistic. The 45% statistic is from the annual income expense analysis put out by the Institute of Real Estate Management and National Apartment Association.

Perhaps you haven’t had any vacancies for awhile? Perhaps there haven’t been any repairs for awhile? Do you hire someone to manage the property or are you managing it yourself?

[gandalf]

I disagree about the direction of housing. This gets worse before it gets better, across the board, and into 2010. Historic unemployment is the driving factor at this point. Widespread job losses and wage deflation, terrible delinquency and foreclosure rates, a wave of prime resets still to come, large shadow inventory, tight credit and failing banks — all of it points to continued downward pressure on housing.

Overall, the banking/financial industry now overshadows real estate as the primary concern, situation is precarious and could lead to currency failures in the next 6-12 months. If the dollar goes up in smoke, what happens to interest rates, cash positions and dollar-denominated assets, pensions and retirement savings, business operations, inventories, employment rates, etc?

Anyone care to predict what happens to housing at that point?

[gandalf]

I disagree about the direction of housing. This gets worse before it gets better, across the board, and into 2010. Historic unemployment is the driving factor at this point. Widespread job losses and wage deflation, terrible delinquency and foreclosure rates, a wave of prime resets still to come, large shadow inventory, tight credit and failing banks — all of it points to continued downward pressure on housing.

Overall, the banking/financial industry now overshadows real estate as the primary concern, situation is precarious and could lead to currency failures in the next 6-12 months. If the dollar goes up in smoke, what happens to interest rates, cash positions and dollar-denominated assets, pensions and retirement savings, business operations, inventories, employment rates, etc?

Anyone care to predict what happens to housing at that point?

[gandalf]

I disagree about the direction of housing. This gets worse before it gets better, across the board, and into 2010. Historic unemployment is the driving factor at this point. Widespread job losses and wage deflation, terrible delinquency and foreclosure rates, a wave of prime resets still to come, large shadow inventory, tight credit and failing banks — all of it points to continued downward pressure on housing.

Overall, the banking/financial industry now overshadows real estate as the primary concern, situation is precarious and could lead to currency failures in the next 6-12 months. If the dollar goes up in smoke, what happens to interest rates, cash positions and dollar-denominated assets, pensions and retirement savings, business operations, inventories, employment rates, etc?

Anyone care to predict what happens to housing at that point?

[gandalf]

I disagree about the direction of housing. This gets worse before it gets better, across the board, and into 2010. Historic unemployment is the driving factor at this point. Widespread job losses and wage deflation, terrible delinquency and foreclosure rates, a wave of prime resets still to come, large shadow inventory, tight credit and failing banks — all of it points to continued downward pressure on housing.

Overall, the banking/financial industry now overshadows real estate as the primary concern, situation is precarious and could lead to currency failures in the next 6-12 months. If the dollar goes up in smoke, what happens to interest rates, cash positions and dollar-denominated assets, pensions and retirement savings, business operations, inventories, employment rates, etc?

Anyone care to predict what happens to housing at that point?

[gandalf]

I disagree about the direction of housing. This gets worse before it gets better, across the board, and into 2010. Historic unemployment is the driving factor at this point. Widespread job losses and wage deflation, terrible delinquency and foreclosure rates, a wave of prime resets still to come, large shadow inventory, tight credit and failing banks — all of it points to continued downward pressure on housing.

Overall, the banking/financial industry now overshadows real estate as the primary concern, situation is precarious and could lead to currency failures in the next 6-12 months. If the dollar goes up in smoke, what happens to interest rates, cash positions and dollar-denominated assets, pensions and retirement savings, business operations, inventories, employment rates, etc?

Anyone care to predict what happens to housing at that point?

[temeculaguy]

[quote=danthedart]Historically the cost of operating a rental unit is 45%. So in order to rent out a home for a profit each month, 55% of rent needs to cover your mortgage plus taxes.

In otherwords, its very difficult for a SFR to be cash flow positive. [/quote]

Where is this “history?” 45%? 10% maybe 20%, but you would hard pressed to even find a single example of 45%. If you can find an example, you certainly wont find that to be the average. 10% for a repair fund and 10% for lost rent between renters and you should be fine in your calculations, if it’s less, great, but factoring a operating cost of 45% is silly. Even a mangement comapany that will handle escorw accounts for expenses, advertising, leasing, management and maintenance for complete hands off absentee owners does not charge 45%. Cite a source. please

[temeculaguy]

[quote=danthedart]Historically the cost of operating a rental unit is 45%. So in order to rent out a home for a profit each month, 55% of rent needs to cover your mortgage plus taxes.

In otherwords, its very difficult for a SFR to be cash flow positive. [/quote]

Where is this “history?” 45%? 10% maybe 20%, but you would hard pressed to even find a single example of 45%. If you can find an example, you certainly wont find that to be the average. 10% for a repair fund and 10% for lost rent between renters and you should be fine in your calculations, if it’s less, great, but factoring a operating cost of 45% is silly. Even a mangement comapany that will handle escorw accounts for expenses, advertising, leasing, management and maintenance for complete hands off absentee owners does not charge 45%. Cite a source. please

[temeculaguy]

[quote=danthedart]Historically the cost of operating a rental unit is 45%. So in order to rent out a home for a profit each month, 55% of rent needs to cover your mortgage plus taxes.

In otherwords, its very difficult for a SFR to be cash flow positive. [/quote]

Where is this “history?” 45%? 10% maybe 20%, but you would hard pressed to even find a single example of 45%. If you can find an example, you certainly wont find that to be the average. 10% for a repair fund and 10% for lost rent between renters and you should be fine in your calculations, if it’s less, great, but factoring a operating cost of 45% is silly. Even a mangement comapany that will handle escorw accounts for expenses, advertising, leasing, management and maintenance for complete hands off absentee owners does not charge 45%. Cite a source. please

[temeculaguy]

[quote=danthedart]Historically the cost of operating a rental unit is 45%. So in order to rent out a home for a profit each month, 55% of rent needs to cover your mortgage plus taxes.

In otherwords, its very difficult for a SFR to be cash flow positive. [/quote]

Where is this “history?” 45%? 10% maybe 20%, but you would hard pressed to even find a single example of 45%. If you can find an example, you certainly wont find that to be the average. 10% for a repair fund and 10% for lost rent between renters and you should be fine in your calculations, if it’s less, great, but factoring a operating cost of 45% is silly. Even a mangement comapany that will handle escorw accounts for expenses, advertising, leasing, management and maintenance for complete hands off absentee owners does not charge 45%. Cite a source. please

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