[EconProf]

For those few with the necessary liquidity, buying house rentals for cash makes a lot of sense. You avoid the transaction costs and delays of getting a loan and can hammer the seller on price. You are the only bidder on non-loanable houses like code-violaters, cracked slabs, serious fixers, etc., that lenders avoid. Fix the problem, rent it out, and enjoy the cash flow, which should be 8% to 12%+ on your investment.
Then refinance and repeat on another property. For those entrepreneurs with the knowledge and experience, this is a valuable niche. And it will clean up the debris left from the collapse in RE, and actually help the market recover.
Compared to 1% to 3% from our stingy bank CD’s, that looks pretty good.

[EconProf]

For those few with the necessary liquidity, buying house rentals for cash makes a lot of sense. You avoid the transaction costs and delays of getting a loan and can hammer the seller on price. You are the only bidder on non-loanable houses like code-violaters, cracked slabs, serious fixers, etc., that lenders avoid. Fix the problem, rent it out, and enjoy the cash flow, which should be 8% to 12%+ on your investment.
Then refinance and repeat on another property. For those entrepreneurs with the knowledge and experience, this is a valuable niche. And it will clean up the debris left from the collapse in RE, and actually help the market recover.
Compared to 1% to 3% from our stingy bank CD’s, that looks pretty good.

[EconProf]

For those few with the necessary liquidity, buying house rentals for cash makes a lot of sense. You avoid the transaction costs and delays of getting a loan and can hammer the seller on price. You are the only bidder on non-loanable houses like code-violaters, cracked slabs, serious fixers, etc., that lenders avoid. Fix the problem, rent it out, and enjoy the cash flow, which should be 8% to 12%+ on your investment.
Then refinance and repeat on another property. For those entrepreneurs with the knowledge and experience, this is a valuable niche. And it will clean up the debris left from the collapse in RE, and actually help the market recover.
Compared to 1% to 3% from our stingy bank CD’s, that looks pretty good.

[EconProf]

For those few with the necessary liquidity, buying house rentals for cash makes a lot of sense. You avoid the transaction costs and delays of getting a loan and can hammer the seller on price. You are the only bidder on non-loanable houses like code-violaters, cracked slabs, serious fixers, etc., that lenders avoid. Fix the problem, rent it out, and enjoy the cash flow, which should be 8% to 12%+ on your investment.
Then refinance and repeat on another property. For those entrepreneurs with the knowledge and experience, this is a valuable niche. And it will clean up the debris left from the collapse in RE, and actually help the market recover.
Compared to 1% to 3% from our stingy bank CD’s, that looks pretty good.

[EconProf]

That house is a charmer. I don’t know their zoning restrictions, but it would be a perfect Bed & Breakfast, or rent out the rooms to singles, long-stay tourists, or students, or ?
It is perfect for this because with 8 baths and 7 bedrooms, it looks like each BR would have its own bath, which really bumps up the rent/room. And with what looks like a big kitchen, each tenant could use it with a minimum of friction. Lets not forget that huge old porch, for evening coctails.
Of course, this is management intensive, but it has a rare bunch of advantages that could be put to creative uses.

[EconProf]

That house is a charmer. I don’t know their zoning restrictions, but it would be a perfect Bed & Breakfast, or rent out the rooms to singles, long-stay tourists, or students, or ?
It is perfect for this because with 8 baths and 7 bedrooms, it looks like each BR would have its own bath, which really bumps up the rent/room. And with what looks like a big kitchen, each tenant could use it with a minimum of friction. Lets not forget that huge old porch, for evening coctails.
Of course, this is management intensive, but it has a rare bunch of advantages that could be put to creative uses.

[EconProf]

That house is a charmer. I don’t know their zoning restrictions, but it would be a perfect Bed & Breakfast, or rent out the rooms to singles, long-stay tourists, or students, or ?
It is perfect for this because with 8 baths and 7 bedrooms, it looks like each BR would have its own bath, which really bumps up the rent/room. And with what looks like a big kitchen, each tenant could use it with a minimum of friction. Lets not forget that huge old porch, for evening coctails.
Of course, this is management intensive, but it has a rare bunch of advantages that could be put to creative uses.

[EconProf]

That house is a charmer. I don’t know their zoning restrictions, but it would be a perfect Bed & Breakfast, or rent out the rooms to singles, long-stay tourists, or students, or ?
It is perfect for this because with 8 baths and 7 bedrooms, it looks like each BR would have its own bath, which really bumps up the rent/room. And with what looks like a big kitchen, each tenant could use it with a minimum of friction. Lets not forget that huge old porch, for evening coctails.
Of course, this is management intensive, but it has a rare bunch of advantages that could be put to creative uses.

[EconProf]

That house is a charmer. I don’t know their zoning restrictions, but it would be a perfect Bed & Breakfast, or rent out the rooms to singles, long-stay tourists, or students, or ?
It is perfect for this because with 8 baths and 7 bedrooms, it looks like each BR would have its own bath, which really bumps up the rent/room. And with what looks like a big kitchen, each tenant could use it with a minimum of friction. Lets not forget that huge old porch, for evening coctails.
Of course, this is management intensive, but it has a rare bunch of advantages that could be put to creative uses.

[EconProf]

All this is a reminder to tenants to READ THOROUGHLY the lease before signing. It might be wise, upon agreeing to rent, to ask the LL for a blank copy of the lease to take home and examine it. If a clause looks wrong, you can negotiate alternative language. Don’t be intimidated by the fact that it is preprinted, don’t accept that “we can’t change that”…it is a contract that can be mutually altered by inserting the new language & both parties initialing the change.
There is a honeymoon atmosphere when a new tenant and new LL come to an agreement. They both like each other, they both assume the best will happen, and they both let their guard down. In their future together, crap will happen, and that written and signed document will control what happens. Don’t take it for granted.
I have 34 apartment units, professionally managed, and we start with a 6 or 12 month lease that reverts to month-to-month if neither party gives notice. Some LL’s ask for a new lease upon expiration of the first, but I think that handicaps both parties. The tenant may only want to stay a few more months, and I’d rather keep them for that short a time rather than replace them immediately. At the same time, I want to have a month-to-month arrangement instead of a lease if they turn crappy and I need to give them notice.

[EconProf]

All this is a reminder to tenants to READ THOROUGHLY the lease before signing. It might be wise, upon agreeing to rent, to ask the LL for a blank copy of the lease to take home and examine it. If a clause looks wrong, you can negotiate alternative language. Don’t be intimidated by the fact that it is preprinted, don’t accept that “we can’t change that”…it is a contract that can be mutually altered by inserting the new language & both parties initialing the change.
There is a honeymoon atmosphere when a new tenant and new LL come to an agreement. They both like each other, they both assume the best will happen, and they both let their guard down. In their future together, crap will happen, and that written and signed document will control what happens. Don’t take it for granted.
I have 34 apartment units, professionally managed, and we start with a 6 or 12 month lease that reverts to month-to-month if neither party gives notice. Some LL’s ask for a new lease upon expiration of the first, but I think that handicaps both parties. The tenant may only want to stay a few more months, and I’d rather keep them for that short a time rather than replace them immediately. At the same time, I want to have a month-to-month arrangement instead of a lease if they turn crappy and I need to give them notice.

[EconProf]

All this is a reminder to tenants to READ THOROUGHLY the lease before signing. It might be wise, upon agreeing to rent, to ask the LL for a blank copy of the lease to take home and examine it. If a clause looks wrong, you can negotiate alternative language. Don’t be intimidated by the fact that it is preprinted, don’t accept that “we can’t change that”…it is a contract that can be mutually altered by inserting the new language & both parties initialing the change.
There is a honeymoon atmosphere when a new tenant and new LL come to an agreement. They both like each other, they both assume the best will happen, and they both let their guard down. In their future together, crap will happen, and that written and signed document will control what happens. Don’t take it for granted.
I have 34 apartment units, professionally managed, and we start with a 6 or 12 month lease that reverts to month-to-month if neither party gives notice. Some LL’s ask for a new lease upon expiration of the first, but I think that handicaps both parties. The tenant may only want to stay a few more months, and I’d rather keep them for that short a time rather than replace them immediately. At the same time, I want to have a month-to-month arrangement instead of a lease if they turn crappy and I need to give them notice.

[EconProf]

All this is a reminder to tenants to READ THOROUGHLY the lease before signing. It might be wise, upon agreeing to rent, to ask the LL for a blank copy of the lease to take home and examine it. If a clause looks wrong, you can negotiate alternative language. Don’t be intimidated by the fact that it is preprinted, don’t accept that “we can’t change that”…it is a contract that can be mutually altered by inserting the new language & both parties initialing the change.
There is a honeymoon atmosphere when a new tenant and new LL come to an agreement. They both like each other, they both assume the best will happen, and they both let their guard down. In their future together, crap will happen, and that written and signed document will control what happens. Don’t take it for granted.
I have 34 apartment units, professionally managed, and we start with a 6 or 12 month lease that reverts to month-to-month if neither party gives notice. Some LL’s ask for a new lease upon expiration of the first, but I think that handicaps both parties. The tenant may only want to stay a few more months, and I’d rather keep them for that short a time rather than replace them immediately. At the same time, I want to have a month-to-month arrangement instead of a lease if they turn crappy and I need to give them notice.

[EconProf]

All this is a reminder to tenants to READ THOROUGHLY the lease before signing. It might be wise, upon agreeing to rent, to ask the LL for a blank copy of the lease to take home and examine it. If a clause looks wrong, you can negotiate alternative language. Don’t be intimidated by the fact that it is preprinted, don’t accept that “we can’t change that”…it is a contract that can be mutually altered by inserting the new language & both parties initialing the change.
There is a honeymoon atmosphere when a new tenant and new LL come to an agreement. They both like each other, they both assume the best will happen, and they both let their guard down. In their future together, crap will happen, and that written and signed document will control what happens. Don’t take it for granted.
I have 34 apartment units, professionally managed, and we start with a 6 or 12 month lease that reverts to month-to-month if neither party gives notice. Some LL’s ask for a new lease upon expiration of the first, but I think that handicaps both parties. The tenant may only want to stay a few more months, and I’d rather keep them for that short a time rather than replace them immediately. At the same time, I want to have a month-to-month arrangement instead of a lease if they turn crappy and I need to give them notice.

[EconProf]

bg: I believe the OP is considering a for-sale house in Austin to a similar house in a similar neighborhood in San Diego. So the issue we are discussing is what taxes would be paid on each. Accordingly, including Prop 13-advantaged CA taxpayers is not relevant to the decision.
As to your Mello Roos fees, yes, they can really become as high as you state, and that further makes the Austin house look better in comparison. Of course, they don’t apply to older houses in older neighborhoods.

[Author]

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