[EconProf]

Wattuppp, thanks for the complete description of your position and your dilemna. How many millions of homeowners are or soon will be in the same situation? Many will crunch the numbers and understandably feel they should not keep paying on an underwater house while the government is bailing out their arguably more irresponsible neighbors.
Once many walk away, that will feed the downward spiral of price declines, making it worse than it otherwise would be. That’s why no one really knows how far it will go and when it will end. The price collapse is taking on a life of its own and feeding on itself.

[EconProf]

Wattuppp, thanks for the complete description of your position and your dilemna. How many millions of homeowners are or soon will be in the same situation? Many will crunch the numbers and understandably feel they should not keep paying on an underwater house while the government is bailing out their arguably more irresponsible neighbors.
Once many walk away, that will feed the downward spiral of price declines, making it worse than it otherwise would be. That’s why no one really knows how far it will go and when it will end. The price collapse is taking on a life of its own and feeding on itself.

[EconProf]

Wattuppp, thanks for the complete description of your position and your dilemna. How many millions of homeowners are or soon will be in the same situation? Many will crunch the numbers and understandably feel they should not keep paying on an underwater house while the government is bailing out their arguably more irresponsible neighbors.
Once many walk away, that will feed the downward spiral of price declines, making it worse than it otherwise would be. That’s why no one really knows how far it will go and when it will end. The price collapse is taking on a life of its own and feeding on itself.

[EconProf]

Wattuppp, thanks for the complete description of your position and your dilemna. How many millions of homeowners are or soon will be in the same situation? Many will crunch the numbers and understandably feel they should not keep paying on an underwater house while the government is bailing out their arguably more irresponsible neighbors.
Once many walk away, that will feed the downward spiral of price declines, making it worse than it otherwise would be. That’s why no one really knows how far it will go and when it will end. The price collapse is taking on a life of its own and feeding on itself.

[EconProf]

Wattuppp, thanks for the complete description of your position and your dilemna. How many millions of homeowners are or soon will be in the same situation? Many will crunch the numbers and understandably feel they should not keep paying on an underwater house while the government is bailing out their arguably more irresponsible neighbors.
Once many walk away, that will feed the downward spiral of price declines, making it worse than it otherwise would be. That’s why no one really knows how far it will go and when it will end. The price collapse is taking on a life of its own and feeding on itself.

[EconProf]

Having bought and sold dozens of properties over many years, both with and without brokers, I can categorically state that almost no one should do it without a carefully-selected broker.
There are so many pitfalls a broker can steer you away from, so many negotiating tactics to alert you to, so much paperwork, and so much market information a good broker can bring to the average buyer or seller, that it is just naive to worry about the 3 – 5% (not 7%) they will cost.

Frankly, the biggest advantage of having an agent for each side is to insulate the buyer and seller from each other. This is a zero-sum game and it is impossible for egos to not get in the way. Good brokers keep everything civil and know how to move the deal along past the landmines.

In today’s market, with sellers in denial, the seller’s agent can be the best friend the buyer ever had. They can pound some sense into their head and get the sale done.
Admittedly, a lot of agents and brokers are NOT capable, or hard working, or completely honest. But a lot are–your job is to find them.

[EconProf]

Having bought and sold dozens of properties over many years, both with and without brokers, I can categorically state that almost no one should do it without a carefully-selected broker.
There are so many pitfalls a broker can steer you away from, so many negotiating tactics to alert you to, so much paperwork, and so much market information a good broker can bring to the average buyer or seller, that it is just naive to worry about the 3 – 5% (not 7%) they will cost.

Frankly, the biggest advantage of having an agent for each side is to insulate the buyer and seller from each other. This is a zero-sum game and it is impossible for egos to not get in the way. Good brokers keep everything civil and know how to move the deal along past the landmines.

In today’s market, with sellers in denial, the seller’s agent can be the best friend the buyer ever had. They can pound some sense into their head and get the sale done.
Admittedly, a lot of agents and brokers are NOT capable, or hard working, or completely honest. But a lot are–your job is to find them.

[EconProf]

Having bought and sold dozens of properties over many years, both with and without brokers, I can categorically state that almost no one should do it without a carefully-selected broker.
There are so many pitfalls a broker can steer you away from, so many negotiating tactics to alert you to, so much paperwork, and so much market information a good broker can bring to the average buyer or seller, that it is just naive to worry about the 3 – 5% (not 7%) they will cost.

Frankly, the biggest advantage of having an agent for each side is to insulate the buyer and seller from each other. This is a zero-sum game and it is impossible for egos to not get in the way. Good brokers keep everything civil and know how to move the deal along past the landmines.

In today’s market, with sellers in denial, the seller’s agent can be the best friend the buyer ever had. They can pound some sense into their head and get the sale done.
Admittedly, a lot of agents and brokers are NOT capable, or hard working, or completely honest. But a lot are–your job is to find them.

[EconProf]

Having bought and sold dozens of properties over many years, both with and without brokers, I can categorically state that almost no one should do it without a carefully-selected broker.
There are so many pitfalls a broker can steer you away from, so many negotiating tactics to alert you to, so much paperwork, and so much market information a good broker can bring to the average buyer or seller, that it is just naive to worry about the 3 – 5% (not 7%) they will cost.

Frankly, the biggest advantage of having an agent for each side is to insulate the buyer and seller from each other. This is a zero-sum game and it is impossible for egos to not get in the way. Good brokers keep everything civil and know how to move the deal along past the landmines.

In today’s market, with sellers in denial, the seller’s agent can be the best friend the buyer ever had. They can pound some sense into their head and get the sale done.
Admittedly, a lot of agents and brokers are NOT capable, or hard working, or completely honest. But a lot are–your job is to find them.

[EconProf]

Having bought and sold dozens of properties over many years, both with and without brokers, I can categorically state that almost no one should do it without a carefully-selected broker.
There are so many pitfalls a broker can steer you away from, so many negotiating tactics to alert you to, so much paperwork, and so much market information a good broker can bring to the average buyer or seller, that it is just naive to worry about the 3 – 5% (not 7%) they will cost.

Frankly, the biggest advantage of having an agent for each side is to insulate the buyer and seller from each other. This is a zero-sum game and it is impossible for egos to not get in the way. Good brokers keep everything civil and know how to move the deal along past the landmines.

In today’s market, with sellers in denial, the seller’s agent can be the best friend the buyer ever had. They can pound some sense into their head and get the sale done.
Admittedly, a lot of agents and brokers are NOT capable, or hard working, or completely honest. But a lot are–your job is to find them.

[EconProf]

The Pros you mention should be reflected in the purchase price, which erodes its profitability, assuming you will pay a market price. If you can buy it way under market, then it will be more profitable…although this may raise eyebrows with your relatives. It is good that your Dad can perform repairs; hope he can also screen tenants, collect rents, perform other landlording chores.

The Cons you mention are very real, and a good start. I’d just plug into your calculations a healthy expense allowance since it is near the water–ask any beachfront landlord here in San Diego about maintenance. Also, are the tenants seasonal? If so, your vacancy rate should be investigated. Best might be to talk to other landlords in the area.

All in all, taking on a multi-unit rental should be viewed as a job. Most people going into it make over-optimistic assumptions about both expenses and rents. It seldom makes economic sense unless appreciation can be expected.

[EconProf]

The Pros you mention should be reflected in the purchase price, which erodes its profitability, assuming you will pay a market price. If you can buy it way under market, then it will be more profitable…although this may raise eyebrows with your relatives. It is good that your Dad can perform repairs; hope he can also screen tenants, collect rents, perform other landlording chores.

The Cons you mention are very real, and a good start. I’d just plug into your calculations a healthy expense allowance since it is near the water–ask any beachfront landlord here in San Diego about maintenance. Also, are the tenants seasonal? If so, your vacancy rate should be investigated. Best might be to talk to other landlords in the area.

All in all, taking on a multi-unit rental should be viewed as a job. Most people going into it make over-optimistic assumptions about both expenses and rents. It seldom makes economic sense unless appreciation can be expected.

[EconProf]

The Pros you mention should be reflected in the purchase price, which erodes its profitability, assuming you will pay a market price. If you can buy it way under market, then it will be more profitable…although this may raise eyebrows with your relatives. It is good that your Dad can perform repairs; hope he can also screen tenants, collect rents, perform other landlording chores.

The Cons you mention are very real, and a good start. I’d just plug into your calculations a healthy expense allowance since it is near the water–ask any beachfront landlord here in San Diego about maintenance. Also, are the tenants seasonal? If so, your vacancy rate should be investigated. Best might be to talk to other landlords in the area.

All in all, taking on a multi-unit rental should be viewed as a job. Most people going into it make over-optimistic assumptions about both expenses and rents. It seldom makes economic sense unless appreciation can be expected.

[EconProf]

The Pros you mention should be reflected in the purchase price, which erodes its profitability, assuming you will pay a market price. If you can buy it way under market, then it will be more profitable…although this may raise eyebrows with your relatives. It is good that your Dad can perform repairs; hope he can also screen tenants, collect rents, perform other landlording chores.

The Cons you mention are very real, and a good start. I’d just plug into your calculations a healthy expense allowance since it is near the water–ask any beachfront landlord here in San Diego about maintenance. Also, are the tenants seasonal? If so, your vacancy rate should be investigated. Best might be to talk to other landlords in the area.

All in all, taking on a multi-unit rental should be viewed as a job. Most people going into it make over-optimistic assumptions about both expenses and rents. It seldom makes economic sense unless appreciation can be expected.

[EconProf]

The Pros you mention should be reflected in the purchase price, which erodes its profitability, assuming you will pay a market price. If you can buy it way under market, then it will be more profitable…although this may raise eyebrows with your relatives. It is good that your Dad can perform repairs; hope he can also screen tenants, collect rents, perform other landlording chores.

The Cons you mention are very real, and a good start. I’d just plug into your calculations a healthy expense allowance since it is near the water–ask any beachfront landlord here in San Diego about maintenance. Also, are the tenants seasonal? If so, your vacancy rate should be investigated. Best might be to talk to other landlords in the area.

All in all, taking on a multi-unit rental should be viewed as a job. Most people going into it make over-optimistic assumptions about both expenses and rents. It seldom makes economic sense unless appreciation can be expected.

[Author]

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