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(former)FormerSanDiegan
ParticipantI use a shoebox (actually a manilla envelope) to accumulate the small amount of items you need for tax accounting, since I have one rental property. Use Turbo Tax Premier to account at tax time. Turbo Tax remembers depreciation of the property and improvements, and annual printouts are there in case your computer dies between tax seasons.
I’ve used Excel to evaluate property, cash flow, etc. But it can be done by hand in about 5 minutes. Right now in San Diego the calculation is easy. Rental Property = Negative Cash Flow.
Unless you have multiple properties and/or are carrying over multiple 1031 exchange carryovers, Turbo Tax and Excel are enough.
Learn how to add, substract, multiply, divide and use the PMT function in Excel.ParticipantWhat a dump !
ParticipantThe company I use is American Heritage Properties. http://www.renthomes.com. Based near Mira Mesa.
Participantybc –
I still have one SFR in San Diego. Have always used property management company since 2000, even when I lived there. For 10% of rent they screen tenants, handle day-to-day calls, and they structure the relationship so that you make the decisions to ensure tax-preferred status (active handling). I’ve always had good tenants through them, though one asked out of his lease a couple months early which I allowed.Participantsdrealtor: I’ll have more for you all 2morrow.
… and you were saying …
ParticipantThanks for all the useless information guys…I’ll be sure to take you oppinions (sic!) to the bank!
And who is pompous ?
Congratulations on finding the deal of the 20th century !
Participantdid I mention you all sound like pompous self-righteous a-holes? cuz that’s what I meant…
In this thread there were at least three POSITIVE responses to your situation as follows:
“davidpeace, if you want to buy and that makes you happy, please buy”
“i don’t know which camp this advice fits in. it’s simple. if you need it and can afford it, buy it.”
“It sounds to me like you made a (relatively) good decision. “
Were those those responses from pompous a-holes ?
Do not paint us all with the same brush.ParticipantIf you plan to move out of state in 5 years, it’s not a safe bet, since So Cal real estate cycle are typically 10 years or more from peak to peak. I think you need a longer commitment to this area before it makes sense to purchase.
Why not buy a house in Denver today, rent it out at a loss (you’ll get the tax break you would get on the SD house) and rent your residence here for the few years.
You’ll lock in today’s prices in Denver for a place you can be committed to live in 10 years from now. This seems to me a safer bet.
If the national RE bubble crowd is wrong you win. If they are right, you win because you plan to be in that house 10 years from now, long enough to ride out the 7-10 year RE cycle.
ParticipantAn additional note –
The price to median ratio does not account for differences in interest rates over these periods.
This does not matter if rates at the next bottom are at 8-10% (30-yr fixed) like they were at the last two bottoms.
My guess is that 30-year rates could easily be in that range so theres no need for an additional correction for rates, IMO.
ParticipantDoofrat – you are half right.
Be careful how you interpret this graph.
From the chart you can show that if prices re-trace to historical norms, that the PRICE to INCOME ratio will decrease by 50%. However, that does not mean that home prices decrease by 50%! Why ? The income part.
Example: The last cycle in this chart shows the plotted ratio going from about 9.5 down to about 6.75 from 1990 to 1997. This is a ~ 29% decline (9.5-6.75)/(9.5)in the ratio.
What did SD County median home prices do during the 1990 to 1997 period *
1990 Median = 183,210
1997 median = 185,210* source : http://www.laalmanac.com/economy/ec37.htm
In fact the SD county median price peaked in 1991 at 187,510
and hit a bottom in 1994 at 176,010. Not a 29% decline !Why ? Perhaps incomes increased by something like 23% or so over this 7-year period, and median prices dropped 6-7%.
I’d guess more in the 20% range if you account for wage increases.
ParticipantTell us more about the break even opportunity.
Which areas have fallen 10-20% already ?
Participant🙂
Participantgunbuster –
I’m using the analysis more to gauge the state of the market than as a shopping trip for investment.
I agree that it is easier to find cash flow properties out of our area. That’s almost always the case. Although I would never buy property in an area that I wasn’t very familiar.
ParticipantI see we have the same numbers…
Exactly !
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