Forum Replies Created
-
AuthorPosts
-
Escoguy
ParticipantMine are all paying, but I did cut two a break.
One went out and bought a new car. 🙂
Had the impression the other one didn’t need it either.
I’m upper mid tier. 5 SFHs: avg $3600 per month.
ParticipantSD
Mind sharing who you used? Do they offer the same rate for a detached condo?
thanksParticipant92127 seller: Her offer was accepted today.
I’m glad she’s got good advice to get the house she wants and make the win/win.
We had a contingent contract in 92127 4BR for 820K near Arriba Linda in early March but the sellers kept getting their (6 plus) offers rejected. We could never figure out if they were just outbid or if the contingency drove things.
Yes Silvercrest, you are spot on, got hit really hard in downturn. I didn’t buy at the bottom but in 2014 after some recovery from person who bought the shortsale.
In the meantime the 3400 sf home has gone from 580K to 800K+.
So yes full recovery.
So now we wait and monitor the rental situation in 4S. Seemed to be good movement this weekend with 3-4 in our range coming off the market.
It does amaze me that zillow lets the odd rental listing be stale (300 days on market) which messes up the data and wastes time with bad data.
ParticipantWhen I worked in Kyrgyzstan in 1998, gold was about $294 an ounce.
A gentleman in the mining business explained how market value at the time was below the mining cost, so he expected the price to go up substaintially which it did. I only bought a small amount of Coeur d’Alene. Coeur is now trading at a fraction of the 1998 price in spite of the price of gold.Kumtor had a major mine in Kgrgyzstan at the time. The BA flight to London would transport the gold twice a week with the miners. I took that flight with the US Ambassador shortly after the Al qaeda strikes on Kenya and Tanzania.
As we were doing business in Northern Afganistan at the time, I offered her any assistance or connections but there wasn’t any follow up. In jest we even thought of naming a cigarette “Bin Laden lights”. But I digress.
Gold mining is expensive, in 2019, the cost of mining at some of the leading mines (Gold Fields) in about $900 so that is likely a floor. Capex for new gold mines is down significantly since 2009 which may provide some additional support, but the key long term driver will be mining cost. As such longer term, gold will probably not perform as well as the past 20 years. That being said, the capex commitment is riskier today as fewer new projects look as appealing:
“We think we have already entered the era of “peak gold” and there is very little that gold miners can do to change it,” he told DW. “At $2,000 per ounce gold, CFRA thinks it opens up new exploration frontiers, but most miners would need to see a sustained higher price to commit capital to higher-cost projects and therefore, we are unlikely to see a significant increase in exploration success.”
https://www.dw.com/en/gold-coronavirus-commodities-miners-exploration/a-54255845
ParticipantSDrealtor
Thanks those are thoughtful insights and for clarifying about yourself.
I’ve been on this blog off and on since at least 2013. I used to read housing inventory which I think OCrenter used to do.
Kind of amazing to see everything that has happened and I credit Rich for giving all of us a resource that can help build substantial wealth at a relatively young 51 in a relatively short period of a decade. So am thankful for all useful input even though there were many trolls and doubters throughout the years.
The seller from 92127 is being pragmatic and looking in south Escondido and other areas outside 92127 with her realtor. So refreshing as some tenants are very specific about the areas they want to live in. She has a budget of 1.1M and wants a 10K ft lot for a pool and there are a few that fit that criteria that I think she will go for at least one in coming days. So hopefully the lapse situation doesn’t occur.
Target ROE is 13% for 92127 with 2% long term appreication (since 2005 factored). Might do better if hits recent 4-5% trend.It’s good to see a reasonable seller realizing when it is time to make a life/lifestyle move. I’ve always been fascinated with 92127 and feel fortunate to have one there already but the spring bidding war for a 3BR left me with an odd feeling. The final buyer was effectively prepaying for what I thought was 2+ years of appreciation.
Two of my rentals are in 92027 (both 4BR SFH) rent from $3500 to $4000.
After the leins clear on new one, expect it to be on the market for 1-2 weeks or less at $3500. Gives at 7.5% ROE on 25% down preappreciation. With 2% apprecitaion, ROE at 15%.
Often suprised by how solid tenants are. Retired physician from Kaiser, 20+ plus UCSD nurse with union protection, NATO military contractors on 3-5 year contracts, young tech couples earning 6 figures each. Younger will eventually graduate to ownership I’m sure but in general less turnover than expected when started out.
I am often suprised by the relatively unknown pockets of higher end homes with views in Escondido. Yes it’s a different feel from 92127 (not a master planned community like 4S) but sometimes more space and a view are the way to go.
We have looked in Harmony Grove and the potential tenant didn’t want to be that far out and ended up getting his budget increased by almost $1000 (25% increase) since his first recon trip in Dec so he was able to get closer to his Poway office. Yes Covid delayed things that much and the rental market changed that much in 8 months for some corporate clients.
Well noted about 92078, ours in in Silvercrest so a little further inland but still positively suprised by the pacing of the comps there. Tenant has strong attachement to the house due to family history and is a touch below market at rent but works reasonably well.
Looking forward to continuing this discussion: found this link today from redfin.
ParticipantMy answer is EFV. International value stocks with a reasonable yield.
Japan 26% came out of Covid more or less ok.
UK is hurting (18%)
Germany 11% (also came out ok so far)
Switzerland and Australia are also managing Covid fine.Quick theory: US creates more money, US $ declines some but still we import more to maintain relative standard of living, Fed doesn’t raise rates, money is handed out to tied thing over, net effect= larger trade deficit, similar standard of living, and more debt managed at artificially low rates. Not enough “safe” assets to recycle the profits. Average person will think we muddled through but eventually this may cause some of the valuation gap to close with international value stocks. This can be a long (multi-year) process. In the meantime, we have some continuous scares in the US market, but the tech mega cap stay relatively highly valued as they can “absorb” excess funds created by central banks as they make products/services that people can’t live without. So long answer, yes it’s complicated but having real estate, mortgage debt at low rates, value stocks with some dividends and some mega tech will probably be ok. If you read “When Money Dies” deals with hyperinflation in Weimar Germany: 1. bondholders got killed, 2. stocks went up 3. real estate went up, 4. asset appreciation was used to pay off debt We may not get the full hyperinflation but a mild version already happened and we just didn’t see it. Normally we should have seen prices drop for all kinds of goods and services including real estate, but as so much aid/handouts/rescue money was put into the system the moment of deflation was erased before the statistics became official. So net effect, your cash is worth less than it would have been but as most don’t hold cash, it is a politically and economically non represented class. Shareholders, bondholders, real estate owners are those the Fed/congress cares out. I could go on.
Participanthttps://www.cdc.gov/nchs/nvss/vsrr/covid19/index.htm
see table 2 for deaths by age
In essence if you are over 60 or have underlying conditions, sheltering in place is the long game until there is a vaccine.
Everyone else could probably make an estimate of their personal risk level.
We could open communities as enough remdisivir comes available if the tests continue to be positive.
ParticipantWith the new rate of 9 cents per kWh, my wife’s Model 3 costs about 26% of the cost of gas or $20 a month to drive 900 miles.
So the annual savings of the Model 3 are about $720 vs a 40 mpg gasoline car.
assume $3.5/gallon gas with 40 mpg or 9 cents/mile
assume 9.3 cents/ kWh with .250 kWh/mile or 2.3 cents per mile860 miles/month
If the car lasts 15 years, fuel savings would be about 25% of the cost of the vehicle. We’re on our fourth EV (Model S/Model 3) My wife’s old Leaf was “totaled” in an accident. My daughter drives my Handa PHEV.
We installed solar but it really isn’t necessary with the EVTOU-5 rate.
yes there is a $16/month surcharge but with our over production and climate credit and $500 per vehicle EV rebate, we don’t pay for gasoline, natural gas or electric.Total investment to do this for solar would be about $22K.
Depending on energy consumption patterns, payback is about 5 years.EVs are more fun to drive too.
ParticipantI’m still looking but not aggressively.
I’m going to receive an inheritance in the next couple of years, likely sooner than later and was thinking about 1 or two more rentals.
I’m seeing a cap rate of 6.3% which still works for me but it’s inland and relatively new. My wife says, why mess with it, we already have 6 and she thinks that’s enough.
ROE with variable rate would be about 10.9%. With fixed rate 5.3%.
Decisions, decisions.July 8, 2018 at 9:33 PM in reply to: CA Landlords. What do you plan to do if the rent control initiative passes in November? #810363ParticipantI have five rentals, if I leave the rents flat for all 5, then compared with 5 years ago, my income would be $19400/year less or 97K over 5 years.
I had to cut the rent on one foreign property by 45% but fortunately the four in SD county were able to make up for this and then some.
I’m almost 50 and if I live another 30 years, that would be almost 600K of lost rent even if I don’t increase any more going forward. So there may be cases were keeping the rent flat is justified but one needs to look at the big picture.
I didn’t raise the rent on 3 this year for different reasons. One is a widow, one truly has an excellent attitude, one is outside the country and I don’t want to deal with changing. One has an automatic escalation clause and will likely stay 3-4 more years. The one I did change didn’t accept it and it appears I won’t have any difficulty getting a new similar quality tenant at the higher rate.
ParticipantWell one day later, I have two families who are strongly interested in the home at the new price which will be a $200 increase and $50 more than I offered the current tenants to renew at. I will likely lose 5-6 days of rent to do some upgrades which were overdue. Both families appear to have longer term ties to the area.
Was surprised to see one potential tenant is losing their current home to a short sale. I thought we were done with that.
From one perspective, I think the current tenants may have raised issues to either get something done, or perhaps they were thinking I wouldn’t raise the rent after things were taken care of. Kind of hard to read minds. I normally think a $50/increase every year or $100 every two years isn’t a big deal. I can’t imagine they thought I’d never increase the rent. This time was $150 but only after a year without and after/while doing some meaningful upgrades.
I remind myself not to feel bad as they have four cars for three drivers so there are places they could cut back if they wanted to.
ParticipantI usually post my listings on zillow. Today I put one on and got 100 viewings and 3 favorites as saved. The tenants contact you and you can screen them with applications, credit scores, etc.
ParticipantBig picture, we really don’t have much to complain about.
For my property in California property tax is about 19% of my gross rental income.
Should go down over time as the property tax rises at 2% and rents likely faster.
Look at German property tax rates 2,6-3,5% by comparison along with 42% above 52K Euros or about $60K US for income taxes.
Bigger issue in US is how the money is spent. Public pensions are often concentrated in the hands a a few top insiders who can game the system.
ParticipantWhen I looked into Hero a few years ago, my takeaway was the relatively high interest rate vs the much lower mortgage rates.
It seem only suitable for those who couldn’t pay cash or didn’t have a better financing option.
The solar probably still saves money and its probably still a net positive but smaller than if it had been purchased outright or financed with a lower rate.
If a buyer could pay it off early with a lower rate, then much of the downside could be mitigated. Not sure if there is a prepayment penalty but my guess would be no.
-
AuthorPosts
