[Coronita]

If you do win the grand prize, you have choice between the house or a cash prize.

The way it works, is someone trying to sell their McMansion gives RMH the right to market that house at the list price. Most people who win, however, end up taking the cash prize.

[Coronita]

[quote=UCGal][quote=flu][quote=NicMM]Why don’t we just buy BKR-B? Isn’t it simpler than tracking Dow and adjusting portfolio very year?

NicMM[/quote]

I don’t want to add to that position.[/quote]

What about any of the total market indexes.
I’m sure it includes dogs and diamonds… since it includes everything.[/quote]

I have VTSAX, which is a vanguard total stock market.

I guess I was just wondering, if given an amount X that you want to allocate it into the stock market, do you distribute it among different benchmarks, or do you just pick 1 like the total stock index and call it a day?

It just seems like there is a variability in each of the benchmarks, but is it worth being in all of them…Or if you do that over a long period of time, it ends up being noise and no difference than just picking a “total stock market index”?

[Coronita]

[quote=svelte]Sentencing:
– 1 year electronic home surveillance
– 5 years probation

http://www.10news.com/news/mother-of-the-year-to-be-sentenced-in-rape-prank

– Pleaded guilty to stalking
– Felony solicitation of rape, solicitation of sodomy, and ID theft charges dropped in return[/quote]

imho she got off easy.

[Coronita]

[quote=flyer]It still amazes me that only around 5% of the US population have a sustained net worth of over a million or more–which is really the “bottom
line”–regardless of age–or how you got there.[/quote]

Us peasants aren’t as wealthy as you 🙂

heh heh.

[Coronita]

[quote=NicMM]Why don’t we just buy BKR-B? Isn’t it simpler than tracking Dow and adjusting portfolio very year?

NicMM[/quote]

I don’t want to add to that position.

[Coronita]

The thing is that I know we have our likes and dislikes. But I’m deciding whether to follow things to the teeth, because I don’t think my intuition is as good as most other people… 🙂

[Coronita]

[quote=bobby]see above post. I don’t think 3% of purchase price is affordable by my potential tenant. also, property tax is 1.2% so now my “investment” is less than 1.8%. then add other expenses. Pretty much goes down to 1.5%. Stick money in high dividend stock is a better choice no?
[/quote]

My bad. I meant 3%-4% after most major expenses include property taxes. Because I haven’t found places 3-4% up there, which is why I was surprised if you were able to find any.

My favorite gem was going to milpitas as few weeks back and seeing 1800sqft selling for $800ish.. In milpitas… Then again, I know the moment I say home prices have peaked in bay area, it will go up more.

[Coronita]

[quote=bobby][quote=flu]The only question you need to ask yourself is

do the numbers work out with a decent positive cash flow for any random tenant.

Also imho, if I were you, I’d do myself a favor and rent to a complete stranger, not someone I have any sort of relationship with (professional or otherwise).

Either you’re not going to be happy because you won’t be able to get the best price you can get, or the other person isn’t going to be happy, because they think you’re trying to take advantage of the relationship with you….or both…[/quote]

thanks for advice. will take into account and seek advice from friends also.
the numbers definitely don’t work out. ie the “mortgage”* will be higher than rent. Not to mention taxes and maintenance.

*I put “mortgage” b/c this will be all cash transaction.[/quote]

Well, if it’s an all cash transaction. You can look at it the other way…

Figure out how much your cash on cash return will be (factoring a reasonable estimate of your rental income with not 100% occupancy). If you’re around 3-4% in the bay area, that’s not bad. I’d probably do it in a decent part of the bay area. Still beats that 1% CD, and I don’t think you can really go wrong with bay area housing in the long run 🙂

[Coronita]

[quote=no_such_reality]I’ve done it and do it. Primarily to reduce the churn and time investment of watching the stocks across different portfolio. It’s in a retirement account and treated like Ronco Rotesserie chicken. First day of the year, I make about five sells and buys, and then don’t think about it again for year. Last year, that was pretty much a 30% bump. Granted, with a DJIA index fund, it would have been closer to 26%, and a spdr around 14%, I think.

In spite of the changes in the Dow (favoring growth stocks), it’s a strategy that continues to do pretty well. YMMV because the return metrics are based on last day of the year prices and most gap on the first day. It also plays straight to the point Rich was making in his article the other weeks on valuations.

That said, you pick up a portofolio that performs slightly better than the dow on average and provides a nice little dividend.

The metrics are all well published. Here’s one common site: http://www.dogsofthedow.com/dogs2013p.htm%5B/quote%5D

Small dog or normal dog?

Also, are you going to follow this precisely including the oil companies that are there…

[Coronita]

[quote=The-Shoveler]2015 back to the future:
In 2015 You can buy a hover board
In 2015 You will be able to buy self lacing Nike shoes

Now in 2015 skunk works plans to demo fusion reactor (Mr Fusion)
OK so it’s not the back of a Delorean, but it fits on the back of a truck.

In the long run Big Oil is doomed IMO.[/quote]

Actually, you can buy a hoverboard if you want to spend $10,000 on it…

https://www.kickstarter.com/projects/142464853/hendo-hoverboards-worlds-first-real-hoverboard

[Coronita]

[quote]
55 people with less than $60M VC funding can create an app that sends more messages than the global SMS network combined, and be sold for over $19 billion dollar
[/quote]

As much as we would like to believe this is “easy”, we all know that the percentage of people that actually succeed in pulling this off is a tiny percentage of all the people trying… (and I’m not talking about the technical feasibility of this)….

Not trying to discourage anyone from trying.. But, it would probably be best by also having a plan B…just in case….

But just from personal observation. This country, imho

1) punishes savers that don’t do anything with their earned income.
2) punishes speculators that like to go against the grain of our planned economy
3) encourages people to act financially irresponsible with the expectation that the ones that are responsible should help pay for those that aren’t.
4) Salaried employees probably are in the worst shape in terms of accumulating wealth
*On one hand, you have some wage pressures from cheaper labor
*You’ll have employers that want to either decrease benefits or increase the costs they pass on to you (think health insurance or PTO)
*You’ll probably have more payroll taxes moving forward.. For example, medicare tax surcharge, our nice CA “wealth tax”…
* And you have very little wiggle room to avoid or cirmcumvent any of the previous things mentioned.

And it will get that much harder.. I think fewer and fewer tools will be available to allow individuals to accumulate assets and build net worth..Tax treatments will be gradually removed or phased out.

[Coronita]

The only question you need to ask yourself is

do the numbers work out with a decent positive cash flow for any random tenant.

Also imho, if I were you, I’d do myself a favor and rent to a complete stranger, not someone I have any sort of relationship with (professional or otherwise).

Either you’re not going to be happy because you won’t be able to get the best price you can get, or the other person isn’t going to be happy, because they think you’re trying to take advantage of the relationship with you….or both…

[Coronita]

[quote=AN][quote=carlsbadworker]You are justified to raise rents after 3 years. But I wouldn’t do it personally if the rent is still 10% within the market price. The tenant may not move because the 3% increase, but psychologically, they may want to get back their money by calling your more for small issues and delay the needed maintenance.
You can ask them to sign a contract instead. I read that the contract is not really enforceable in CA but at least psychologically you get them more committed to stay.
But I would raise rents even if they are perfect tenants after 5 years (unlike AN)…but I will always price it under the market (e.g. 5-10% if they are perfect tenant). In fact, 10% under market is my threshold. I will try to keep it between 5-10% below market for perfect tenant.[/quote]But flu’s rent is currently only 7-8% under market rent. Time and stress is not free. What you said in your first paragraph is the reason why I wouldn’t raise rent on a good tenant who don’t bother you.

I currently have a tenant who signed a 5 year lease with me. At the signing of the lease, it was market rent, but right now, it’s probably about 10% below market. When the lease is up, I don’t intend to raise the rent, since it has been pretty hassle free. So, I say a few hundred dollar a year is a worthwhile price to pay for having a hassle free tenant. I general rule is, don’t raise rent on good tenants. Raise rent to market price with new tenants and raise rents for bad tenant to get them to move.[/quote]

My labor is cheap… Look at how long I’m taking to fix my timing belts on my audi… Lol…

In all seriousness, I see the arguments both are making on this and I kinda go back and forth on this too.

In the bay area, this is a no brainer. I would increase the rents simply because well, everyone there is use to the insanity of the rental/housing market there..

For the other rental elsewhere in SD, the tenant pool isn’t as good and currently I have a good tenant, so for that I’m fine with keeping things as is.

For this particular one, however, not sure… It’s in high demand, there won’t be a problem with the tenant pool, turnarond is probably less than a month, and I’m slightly inclined to think the current one won’t be moving. Anyway, I can think about it some more.

[Coronita]

[quote=svelte]Congrats Flu!

Now, let’s see if you can get everything back together without having extra parts when you’re done.

“Geez, I have no idea where that should have went…”

ha![/quote]

Come on, it’s german. You know they over-engineer these things and have more bolts than are really needed… 🙂

[Coronita]

[quote=deadzone]Why bother raising the price at all? If the tenants are good, and your expenses have only gone up slightly, why risk pissing off the tenant for a measly 3%.

Given you expect them to move out around the 5 year point, I recommend you plan to do a rent adjustment at the 5 year mark if they don’t move before then. At that time, maybe raise it 5% or more to compensate for your costs.[/quote]

True.. Though in the fallback plan that they do stay, rent will be so out of wack by that time that any reasonable adjustment, they will be in sticker shock…

[Author]

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