[EconProf]

Good point Fearful. Hiring a property manager usually runs 10% of rents–the 8% guy just wants to get a listing when you tire of the losses. 10%+ is more common, and that excludes maintenance and repairs, although they will call and arrange contractors to do the work for you with little regard for cost.
I believe that lenders automatically assume 30% of rents for vacancies, repairs, maintenance, management, etc. That’s before PITI.
Using honest and realistic accounting, we are soooo far away from buying even break-even properties, much less cash flow ones.

[EconProf]

Good point Fearful. Hiring a property manager usually runs 10% of rents–the 8% guy just wants to get a listing when you tire of the losses. 10%+ is more common, and that excludes maintenance and repairs, although they will call and arrange contractors to do the work for you with little regard for cost.
I believe that lenders automatically assume 30% of rents for vacancies, repairs, maintenance, management, etc. That’s before PITI.
Using honest and realistic accounting, we are soooo far away from buying even break-even properties, much less cash flow ones.

[EconProf]

Good point Fearful. Hiring a property manager usually runs 10% of rents–the 8% guy just wants to get a listing when you tire of the losses. 10%+ is more common, and that excludes maintenance and repairs, although they will call and arrange contractors to do the work for you with little regard for cost.
I believe that lenders automatically assume 30% of rents for vacancies, repairs, maintenance, management, etc. That’s before PITI.
Using honest and realistic accounting, we are soooo far away from buying even break-even properties, much less cash flow ones.

[EconProf]

Good point Fearful. Hiring a property manager usually runs 10% of rents–the 8% guy just wants to get a listing when you tire of the losses. 10%+ is more common, and that excludes maintenance and repairs, although they will call and arrange contractors to do the work for you with little regard for cost.
I believe that lenders automatically assume 30% of rents for vacancies, repairs, maintenance, management, etc. That’s before PITI.
Using honest and realistic accounting, we are soooo far away from buying even break-even properties, much less cash flow ones.

[EconProf]

Good point Fearful. Hiring a property manager usually runs 10% of rents–the 8% guy just wants to get a listing when you tire of the losses. 10%+ is more common, and that excludes maintenance and repairs, although they will call and arrange contractors to do the work for you with little regard for cost.
I believe that lenders automatically assume 30% of rents for vacancies, repairs, maintenance, management, etc. That’s before PITI.
Using honest and realistic accounting, we are soooo far away from buying even break-even properties, much less cash flow ones.

[EconProf]

The City has used a lot of tricks to avoid fiscal realities, but soon will not be able to dodge a number of shocks:
1. Property tax revenues have increased about 10% annually lately due to the RE boom. Significant time lags delay the revenue hit, but it is now coming and it is big.
2. Sales tax revenues will be hit with the recession all but here–again, time lags delay its impact.
3. Development Services revenue will fall with the current drop-off in building.
4. Deferred maintenance games can no longer be played. Other costs will also come home to roost–fuel, pension, hiring needs (we do have one of the leanest personnel staffing levels compared to other cities, so can’t cut there).

One of the likely revenue raisers is a big jump in the property transfer tax when you buy a property. It is far bigger in other parts of the country, and so is an easy target. Another target is our relatively low TOT, as compared to other tourist destinations. And, of course, the sales tax, a prodigous revenue raiser when hiked.

[EconProf]

The City has used a lot of tricks to avoid fiscal realities, but soon will not be able to dodge a number of shocks:
1. Property tax revenues have increased about 10% annually lately due to the RE boom. Significant time lags delay the revenue hit, but it is now coming and it is big.
2. Sales tax revenues will be hit with the recession all but here–again, time lags delay its impact.
3. Development Services revenue will fall with the current drop-off in building.
4. Deferred maintenance games can no longer be played. Other costs will also come home to roost–fuel, pension, hiring needs (we do have one of the leanest personnel staffing levels compared to other cities, so can’t cut there).

One of the likely revenue raisers is a big jump in the property transfer tax when you buy a property. It is far bigger in other parts of the country, and so is an easy target. Another target is our relatively low TOT, as compared to other tourist destinations. And, of course, the sales tax, a prodigous revenue raiser when hiked.

[EconProf]

The City has used a lot of tricks to avoid fiscal realities, but soon will not be able to dodge a number of shocks:
1. Property tax revenues have increased about 10% annually lately due to the RE boom. Significant time lags delay the revenue hit, but it is now coming and it is big.
2. Sales tax revenues will be hit with the recession all but here–again, time lags delay its impact.
3. Development Services revenue will fall with the current drop-off in building.
4. Deferred maintenance games can no longer be played. Other costs will also come home to roost–fuel, pension, hiring needs (we do have one of the leanest personnel staffing levels compared to other cities, so can’t cut there).

One of the likely revenue raisers is a big jump in the property transfer tax when you buy a property. It is far bigger in other parts of the country, and so is an easy target. Another target is our relatively low TOT, as compared to other tourist destinations. And, of course, the sales tax, a prodigous revenue raiser when hiked.

[EconProf]

The City has used a lot of tricks to avoid fiscal realities, but soon will not be able to dodge a number of shocks:
1. Property tax revenues have increased about 10% annually lately due to the RE boom. Significant time lags delay the revenue hit, but it is now coming and it is big.
2. Sales tax revenues will be hit with the recession all but here–again, time lags delay its impact.
3. Development Services revenue will fall with the current drop-off in building.
4. Deferred maintenance games can no longer be played. Other costs will also come home to roost–fuel, pension, hiring needs (we do have one of the leanest personnel staffing levels compared to other cities, so can’t cut there).

One of the likely revenue raisers is a big jump in the property transfer tax when you buy a property. It is far bigger in other parts of the country, and so is an easy target. Another target is our relatively low TOT, as compared to other tourist destinations. And, of course, the sales tax, a prodigous revenue raiser when hiked.

[EconProf]

The City has used a lot of tricks to avoid fiscal realities, but soon will not be able to dodge a number of shocks:
1. Property tax revenues have increased about 10% annually lately due to the RE boom. Significant time lags delay the revenue hit, but it is now coming and it is big.
2. Sales tax revenues will be hit with the recession all but here–again, time lags delay its impact.
3. Development Services revenue will fall with the current drop-off in building.
4. Deferred maintenance games can no longer be played. Other costs will also come home to roost–fuel, pension, hiring needs (we do have one of the leanest personnel staffing levels compared to other cities, so can’t cut there).

One of the likely revenue raisers is a big jump in the property transfer tax when you buy a property. It is far bigger in other parts of the country, and so is an easy target. Another target is our relatively low TOT, as compared to other tourist destinations. And, of course, the sales tax, a prodigous revenue raiser when hiked.

[EconProf]

Purchasing in Mira Mesa vs. Rancho Penasquitos should depend heavily on expected appreciation. On that score, MM ranks low for a number of reasons. The houses are old and need a lot of updating. The streets are crowded and full of parked cars and big trucks. The one and only poorly designed main drag, Mira Mesa Bl. is jam-packed and destined to get worse. Add now the possibility of mini-dorms as discussed here, and you have a neighborhood in decline.
Pay more for a RP neighborhood and you get a decent future. Hwy. 56 changed everything. Though it can get busy in a rush hour, it is generally 65 MPH. It is physically designed to take a third lane in each direction, so that will eventually happen, as is happening to 52.

[EconProf]

Purchasing in Mira Mesa vs. Rancho Penasquitos should depend heavily on expected appreciation. On that score, MM ranks low for a number of reasons. The houses are old and need a lot of updating. The streets are crowded and full of parked cars and big trucks. The one and only poorly designed main drag, Mira Mesa Bl. is jam-packed and destined to get worse. Add now the possibility of mini-dorms as discussed here, and you have a neighborhood in decline.
Pay more for a RP neighborhood and you get a decent future. Hwy. 56 changed everything. Though it can get busy in a rush hour, it is generally 65 MPH. It is physically designed to take a third lane in each direction, so that will eventually happen, as is happening to 52.

[EconProf]

Purchasing in Mira Mesa vs. Rancho Penasquitos should depend heavily on expected appreciation. On that score, MM ranks low for a number of reasons. The houses are old and need a lot of updating. The streets are crowded and full of parked cars and big trucks. The one and only poorly designed main drag, Mira Mesa Bl. is jam-packed and destined to get worse. Add now the possibility of mini-dorms as discussed here, and you have a neighborhood in decline.
Pay more for a RP neighborhood and you get a decent future. Hwy. 56 changed everything. Though it can get busy in a rush hour, it is generally 65 MPH. It is physically designed to take a third lane in each direction, so that will eventually happen, as is happening to 52.

[EconProf]

Purchasing in Mira Mesa vs. Rancho Penasquitos should depend heavily on expected appreciation. On that score, MM ranks low for a number of reasons. The houses are old and need a lot of updating. The streets are crowded and full of parked cars and big trucks. The one and only poorly designed main drag, Mira Mesa Bl. is jam-packed and destined to get worse. Add now the possibility of mini-dorms as discussed here, and you have a neighborhood in decline.
Pay more for a RP neighborhood and you get a decent future. Hwy. 56 changed everything. Though it can get busy in a rush hour, it is generally 65 MPH. It is physically designed to take a third lane in each direction, so that will eventually happen, as is happening to 52.

[EconProf]

Purchasing in Mira Mesa vs. Rancho Penasquitos should depend heavily on expected appreciation. On that score, MM ranks low for a number of reasons. The houses are old and need a lot of updating. The streets are crowded and full of parked cars and big trucks. The one and only poorly designed main drag, Mira Mesa Bl. is jam-packed and destined to get worse. Add now the possibility of mini-dorms as discussed here, and you have a neighborhood in decline.
Pay more for a RP neighborhood and you get a decent future. Hwy. 56 changed everything. Though it can get busy in a rush hour, it is generally 65 MPH. It is physically designed to take a third lane in each direction, so that will eventually happen, as is happening to 52.

[Author]

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