[Bugs]

The reason it doesn’t sound too bad is because the dollar amounts involved are relatively low.

His mortgage payment is just a touch less than the rents, but he has to collect rents all 12 months of the year for that to break even – the unit can never stand vacant even for a couple weeks. Realistically, a 1bd apartment turns over occupancy more often that a 2bd or 3bd because the 1bd tenants are more more likely to move on a regular basis.

Then there’s the fixed costs of HOA dues, property taxes, and insurance; as well as the variable costs such as occasional maintenance, cleaning, painting and advertising when the unit does turn over, and eventually replacing carpeting and blinds.

If an investor were buying this unit to hold it for 5 years, this is what the cash flow would look like to them, excluding the potential profits/losses from changes in the price.

1,450 – Annual property taxes (conservative estimate)
1,200 – HOA dues (conservative estimate)
400 – Insurance
200 – Administrative expenses (accounting, banking, etc)
200 – Average expense for painting ($600 / 3 yrs)
150 – Average cleaning expense ($450 / 3 yrs)
904 – Average flooring/drapes replacement (226 sqyd x $20; /5)
———
$ 4,504 – Average annual expenses, in 2007 dollars

Soooo,

$10,200 – Maximum rental income, in 2007 dollars
– 306 – Average vacancy and collection losses
——–
$ 9,894 – Average annual effective gross income
– 4,504 – Average annual expenses, in 2007 dollars
——–
$ 5,390 – Net Income, before debt service
– 9,539 – Mtg payment on $140,650; 30yrs @5.5%
——–
($4,149) – Average Net annual loss over a 5 year holding period, assuming the property doesn’t increase/decrease in value during that time period. Just to break even, this condo would have to increase by $20,000 in 2007 dollars over the next 5 years. If we assume a conservative 2.5% average annual inflation rate – which i think is ridiculously low as of right now – then this unit would have to sell at $186,000 in 2013 just to break even.

Again, the monthly loss doesn’t sound so bad because of the dollar amounts involved – it’s equivalent to losing a car payment on a Corolla. But it’s still a sizable loss compared to the rental income itself.

Tax benefits to an income investor won’t be the same as for a buyer for whom this is the primary residence.

Now how good does it look?

[Bugs]

The reason it doesn’t sound too bad is because the dollar amounts involved are relatively low.

His mortgage payment is just a touch less than the rents, but he has to collect rents all 12 months of the year for that to break even – the unit can never stand vacant even for a couple weeks. Realistically, a 1bd apartment turns over occupancy more often that a 2bd or 3bd because the 1bd tenants are more more likely to move on a regular basis.

Then there’s the fixed costs of HOA dues, property taxes, and insurance; as well as the variable costs such as occasional maintenance, cleaning, painting and advertising when the unit does turn over, and eventually replacing carpeting and blinds.

If an investor were buying this unit to hold it for 5 years, this is what the cash flow would look like to them, excluding the potential profits/losses from changes in the price.

1,450 – Annual property taxes (conservative estimate)
1,200 – HOA dues (conservative estimate)
400 – Insurance
200 – Administrative expenses (accounting, banking, etc)
200 – Average expense for painting ($600 / 3 yrs)
150 – Average cleaning expense ($450 / 3 yrs)
904 – Average flooring/drapes replacement (226 sqyd x $20; /5)
———
$ 4,504 – Average annual expenses, in 2007 dollars

Soooo,

$10,200 – Maximum rental income, in 2007 dollars
– 306 – Average vacancy and collection losses
——–
$ 9,894 – Average annual effective gross income
– 4,504 – Average annual expenses, in 2007 dollars
——–
$ 5,390 – Net Income, before debt service
– 9,539 – Mtg payment on $140,650; 30yrs @5.5%
——–
($4,149) – Average Net annual loss over a 5 year holding period, assuming the property doesn’t increase/decrease in value during that time period. Just to break even, this condo would have to increase by $20,000 in 2007 dollars over the next 5 years. If we assume a conservative 2.5% average annual inflation rate – which i think is ridiculously low as of right now – then this unit would have to sell at $186,000 in 2013 just to break even.

Again, the monthly loss doesn’t sound so bad because of the dollar amounts involved – it’s equivalent to losing a car payment on a Corolla. But it’s still a sizable loss compared to the rental income itself.

Tax benefits to an income investor won’t be the same as for a buyer for whom this is the primary residence.

Now how good does it look?

[Bugs]

The reason it doesn’t sound too bad is because the dollar amounts involved are relatively low.

His mortgage payment is just a touch less than the rents, but he has to collect rents all 12 months of the year for that to break even – the unit can never stand vacant even for a couple weeks. Realistically, a 1bd apartment turns over occupancy more often that a 2bd or 3bd because the 1bd tenants are more more likely to move on a regular basis.

Then there’s the fixed costs of HOA dues, property taxes, and insurance; as well as the variable costs such as occasional maintenance, cleaning, painting and advertising when the unit does turn over, and eventually replacing carpeting and blinds.

If an investor were buying this unit to hold it for 5 years, this is what the cash flow would look like to them, excluding the potential profits/losses from changes in the price.

1,450 – Annual property taxes (conservative estimate)
1,200 – HOA dues (conservative estimate)
400 – Insurance
200 – Administrative expenses (accounting, banking, etc)
200 – Average expense for painting ($600 / 3 yrs)
150 – Average cleaning expense ($450 / 3 yrs)
904 – Average flooring/drapes replacement (226 sqyd x $20; /5)
———
$ 4,504 – Average annual expenses, in 2007 dollars

Soooo,

$10,200 – Maximum rental income, in 2007 dollars
– 306 – Average vacancy and collection losses
——–
$ 9,894 – Average annual effective gross income
– 4,504 – Average annual expenses, in 2007 dollars
——–
$ 5,390 – Net Income, before debt service
– 9,539 – Mtg payment on $140,650; 30yrs @5.5%
——–
($4,149) – Average Net annual loss over a 5 year holding period, assuming the property doesn’t increase/decrease in value during that time period. Just to break even, this condo would have to increase by $20,000 in 2007 dollars over the next 5 years. If we assume a conservative 2.5% average annual inflation rate – which i think is ridiculously low as of right now – then this unit would have to sell at $186,000 in 2013 just to break even.

Again, the monthly loss doesn’t sound so bad because of the dollar amounts involved – it’s equivalent to losing a car payment on a Corolla. But it’s still a sizable loss compared to the rental income itself.

Tax benefits to an income investor won’t be the same as for a buyer for whom this is the primary residence.

Now how good does it look?

[Bugs]

The reason it doesn’t sound too bad is because the dollar amounts involved are relatively low.

His mortgage payment is just a touch less than the rents, but he has to collect rents all 12 months of the year for that to break even – the unit can never stand vacant even for a couple weeks. Realistically, a 1bd apartment turns over occupancy more often that a 2bd or 3bd because the 1bd tenants are more more likely to move on a regular basis.

Then there’s the fixed costs of HOA dues, property taxes, and insurance; as well as the variable costs such as occasional maintenance, cleaning, painting and advertising when the unit does turn over, and eventually replacing carpeting and blinds.

If an investor were buying this unit to hold it for 5 years, this is what the cash flow would look like to them, excluding the potential profits/losses from changes in the price.

1,450 – Annual property taxes (conservative estimate)
1,200 – HOA dues (conservative estimate)
400 – Insurance
200 – Administrative expenses (accounting, banking, etc)
200 – Average expense for painting ($600 / 3 yrs)
150 – Average cleaning expense ($450 / 3 yrs)
904 – Average flooring/drapes replacement (226 sqyd x $20; /5)
———
$ 4,504 – Average annual expenses, in 2007 dollars

Soooo,

$10,200 – Maximum rental income, in 2007 dollars
– 306 – Average vacancy and collection losses
——–
$ 9,894 – Average annual effective gross income
– 4,504 – Average annual expenses, in 2007 dollars
——–
$ 5,390 – Net Income, before debt service
– 9,539 – Mtg payment on $140,650; 30yrs @5.5%
——–
($4,149) – Average Net annual loss over a 5 year holding period, assuming the property doesn’t increase/decrease in value during that time period. Just to break even, this condo would have to increase by $20,000 in 2007 dollars over the next 5 years. If we assume a conservative 2.5% average annual inflation rate – which i think is ridiculously low as of right now – then this unit would have to sell at $186,000 in 2013 just to break even.

Again, the monthly loss doesn’t sound so bad because of the dollar amounts involved – it’s equivalent to losing a car payment on a Corolla. But it’s still a sizable loss compared to the rental income itself.

Tax benefits to an income investor won’t be the same as for a buyer for whom this is the primary residence.

Now how good does it look?

[Bugs]

The reason it doesn’t sound too bad is because the dollar amounts involved are relatively low.

His mortgage payment is just a touch less than the rents, but he has to collect rents all 12 months of the year for that to break even – the unit can never stand vacant even for a couple weeks. Realistically, a 1bd apartment turns over occupancy more often that a 2bd or 3bd because the 1bd tenants are more more likely to move on a regular basis.

Then there’s the fixed costs of HOA dues, property taxes, and insurance; as well as the variable costs such as occasional maintenance, cleaning, painting and advertising when the unit does turn over, and eventually replacing carpeting and blinds.

If an investor were buying this unit to hold it for 5 years, this is what the cash flow would look like to them, excluding the potential profits/losses from changes in the price.

1,450 – Annual property taxes (conservative estimate)
1,200 – HOA dues (conservative estimate)
400 – Insurance
200 – Administrative expenses (accounting, banking, etc)
200 – Average expense for painting ($600 / 3 yrs)
150 – Average cleaning expense ($450 / 3 yrs)
904 – Average flooring/drapes replacement (226 sqyd x $20; /5)
———
$ 4,504 – Average annual expenses, in 2007 dollars

Soooo,

$10,200 – Maximum rental income, in 2007 dollars
– 306 – Average vacancy and collection losses
——–
$ 9,894 – Average annual effective gross income
– 4,504 – Average annual expenses, in 2007 dollars
——–
$ 5,390 – Net Income, before debt service
– 9,539 – Mtg payment on $140,650; 30yrs @5.5%
——–
($4,149) – Average Net annual loss over a 5 year holding period, assuming the property doesn’t increase/decrease in value during that time period. Just to break even, this condo would have to increase by $20,000 in 2007 dollars over the next 5 years. If we assume a conservative 2.5% average annual inflation rate – which i think is ridiculously low as of right now – then this unit would have to sell at $186,000 in 2013 just to break even.

Again, the monthly loss doesn’t sound so bad because of the dollar amounts involved – it’s equivalent to losing a car payment on a Corolla. But it’s still a sizable loss compared to the rental income itself.

Tax benefits to an income investor won’t be the same as for a buyer for whom this is the primary residence.

Now how good does it look?

[Bugs]

Who among us is bitter and who among us is optimistic?

Just offhand, I’d say that most of the Piggs are a lot happier now than they were two years ago. Most of the bulls are a lot more bitter – at least on the inside. Hence their latent hostility to one and all.

RO tried his best to spin the news of 1% increases in monthly sales volume to mean that the bottom is here. He got shredded for it. Now he’s mad that he can’t get any airplay here so he’s going to punish us by leaving.

No problemo. We get a half dozen permabulls here every year. They always bring the “you’re dreaming if you think it’ll go down 50% because everyone wants to live in San Diego” arguments, and then they get introduced to all the data and analysis that they never learned how to do for themselves.

We won’t miss RO or his role on this board. That’s because there’ll be another bull coming along shortly to take his place. And that bull will inevitably get what RO got.

I just hope the next bitter borrower brings better avatars. I found the avatar that RO uses to depict himself to be more than a little …. bitter.

[Bugs]

Who among us is bitter and who among us is optimistic?

Just offhand, I’d say that most of the Piggs are a lot happier now than they were two years ago. Most of the bulls are a lot more bitter – at least on the inside. Hence their latent hostility to one and all.

RO tried his best to spin the news of 1% increases in monthly sales volume to mean that the bottom is here. He got shredded for it. Now he’s mad that he can’t get any airplay here so he’s going to punish us by leaving.

No problemo. We get a half dozen permabulls here every year. They always bring the “you’re dreaming if you think it’ll go down 50% because everyone wants to live in San Diego” arguments, and then they get introduced to all the data and analysis that they never learned how to do for themselves.

We won’t miss RO or his role on this board. That’s because there’ll be another bull coming along shortly to take his place. And that bull will inevitably get what RO got.

I just hope the next bitter borrower brings better avatars. I found the avatar that RO uses to depict himself to be more than a little …. bitter.

[Bugs]

Who among us is bitter and who among us is optimistic?

Just offhand, I’d say that most of the Piggs are a lot happier now than they were two years ago. Most of the bulls are a lot more bitter – at least on the inside. Hence their latent hostility to one and all.

RO tried his best to spin the news of 1% increases in monthly sales volume to mean that the bottom is here. He got shredded for it. Now he’s mad that he can’t get any airplay here so he’s going to punish us by leaving.

No problemo. We get a half dozen permabulls here every year. They always bring the “you’re dreaming if you think it’ll go down 50% because everyone wants to live in San Diego” arguments, and then they get introduced to all the data and analysis that they never learned how to do for themselves.

We won’t miss RO or his role on this board. That’s because there’ll be another bull coming along shortly to take his place. And that bull will inevitably get what RO got.

I just hope the next bitter borrower brings better avatars. I found the avatar that RO uses to depict himself to be more than a little …. bitter.

[Bugs]

Who among us is bitter and who among us is optimistic?

Just offhand, I’d say that most of the Piggs are a lot happier now than they were two years ago. Most of the bulls are a lot more bitter – at least on the inside. Hence their latent hostility to one and all.

RO tried his best to spin the news of 1% increases in monthly sales volume to mean that the bottom is here. He got shredded for it. Now he’s mad that he can’t get any airplay here so he’s going to punish us by leaving.

No problemo. We get a half dozen permabulls here every year. They always bring the “you’re dreaming if you think it’ll go down 50% because everyone wants to live in San Diego” arguments, and then they get introduced to all the data and analysis that they never learned how to do for themselves.

We won’t miss RO or his role on this board. That’s because there’ll be another bull coming along shortly to take his place. And that bull will inevitably get what RO got.

I just hope the next bitter borrower brings better avatars. I found the avatar that RO uses to depict himself to be more than a little …. bitter.

[Bugs]

Who among us is bitter and who among us is optimistic?

Just offhand, I’d say that most of the Piggs are a lot happier now than they were two years ago. Most of the bulls are a lot more bitter – at least on the inside. Hence their latent hostility to one and all.

RO tried his best to spin the news of 1% increases in monthly sales volume to mean that the bottom is here. He got shredded for it. Now he’s mad that he can’t get any airplay here so he’s going to punish us by leaving.

No problemo. We get a half dozen permabulls here every year. They always bring the “you’re dreaming if you think it’ll go down 50% because everyone wants to live in San Diego” arguments, and then they get introduced to all the data and analysis that they never learned how to do for themselves.

We won’t miss RO or his role on this board. That’s because there’ll be another bull coming along shortly to take his place. And that bull will inevitably get what RO got.

I just hope the next bitter borrower brings better avatars. I found the avatar that RO uses to depict himself to be more than a little …. bitter.

[Bugs]

This thread is a thinly scabbed over wound that’s just begging to get bumped so it can bleed. Anyone who participates in it deserves whatever they get.

[Bugs]

This thread is a thinly scabbed over wound that’s just begging to get bumped so it can bleed. Anyone who participates in it deserves whatever they get.

[Bugs]

This thread is a thinly scabbed over wound that’s just begging to get bumped so it can bleed. Anyone who participates in it deserves whatever they get.

[Bugs]

This thread is a thinly scabbed over wound that’s just begging to get bumped so it can bleed. Anyone who participates in it deserves whatever they get.

[Bugs]

This thread is a thinly scabbed over wound that’s just begging to get bumped so it can bleed. Anyone who participates in it deserves whatever they get.

[Author]

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