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spdrun
ParticipantYou’re assuming that credit and criminal checks can effectively detect trashy people. The better test for trashiness is the same as Justic Potter Stewart’s obscenity test.
ParticipantWho cares about interest rates going up if I’m locked in for a decade or three? What I’m looking for is a steady predictable income, keyed to inflation, to supplement my freelance/small-business endeavors. Rents are highly unlikely to decrease in the areas where I’m looking, since they’ve basically been stable for a long time, increasing slightly with inflation.
I doubt prices will plummet — adjusted for inflation, they’re already at levels that existed when rates were MUCH higher. Appreciation would be nice, but it ain’t the goal here.
And lastly, I know someone (good family friend) who came from abroad 40 years ago and was VERY successful at this game while also working as an electrician. It can be done.
ParticipantDuring boom years, the problem was “fix and flip people” hoping for short-term appreciation, not rental investors. If people can get 7.5%+ renting out properties at reasonable rents, then why the hell not buy a few?
One house I’m looking at in NJ needs maybe $10k of work. It will sell for maybe $110k. Taxes are $450/mo, insurance is $100/mo, ancillaries $100/mo, common utilities (basically gas/water) will run about $250/mo. Both apartments will rent for about $950/mo, which hasn’t changed a lot in the past 5-10 years.
Assuming one month vacancy per year, that’s still an 8.5% cap rate. Try getting that at a bank, what with “Zimbabwe” Ben-Shalom’s zero-rate policy.
Another condo has $220/mo carrying charges, stable and with good reserves. Rents for $1000/mo. Tenants pay all utilities that aren’t included in common charges. Taxes are $100/mo, extra insurance is $25/mo, call it $50/mo for ancillaries. 8.1% right there if I pay $90k.
Rental income is taxed, but only on profit. You can deduct:
* Property taxes
* Maintenance expenses
* Utilities paid by landlord
* Depreciation
* Mortgage interestBasically same as any other business. And if I paid $200k, I’d expect to be collecting closer to $25k-$30k/yr in rents — I’d have to for the deal to make sense and turn a profit. And fuck yeah, it’s better than “getting a better-paying job” — the idea is for my housing expenses minus rental income to be negative inside of this year.
Live in NYC for basically free, combined with good income from one’s “full-time” gig? Killer. All of the benefits of the city, without being a wage-slave like 80% or so of its residents, and the ability to save $10-20k per year and put it towards travel and fun. Awesome.
As to my possible inexperience, both of my parents are architects, and have been in the rental business as a sideline on one level or another for a decade or so. I’m an engineer who has worked in the construction business in the past, though not residential.
ParticipantUh, perfectly possible if you want to actually pay for airtime and burn battery life whenever someone is leaving you a voicemail.
ParticipantAmazing — doctors using e-mail 🙂 Most of the ones that I’ve dealt with (including a professor of quite high repute who invented several new surgical procedures) have been awful technophobes when it came to digital communications.
This being said, they’ve always been quick to fit me in and schedule tests when needed — no waiting for months for simple tests, as I heard happens in some places.
I’m not a fan of the HMO-does-everything-and-you’re-fucked-if-you-want-to-go-out-of-network model of doing things.
ParticipantWouldn’t you still want your provider’s voicemail for when the phone is off or out of signal range?
ParticipantDid you check various REO (not trustee/sheriff) auction sites for upcoming foreclosure auctions? This is how it seems to be done these days.
ParticipantBankrupt all of the government including the pigs running DC. Start from scratch.
ParticipantThey got the party wrong, though. It’s the republicans who’ve spent like drunken sailors while reducing taxes (even though there is NO correlation between lowering taxes and economic growth) at the same time!
Ding, ding, ding! Personally, I’d be all for putting the morons who voted for TWO FUCKING WARS while voting to cut taxes up on trial for treason. Each and every one of them. Essentially, we did exactly what Bin Laden & Co expected us to, destroying our economy from the inside out.
ParticipantI’ve seen the opposite in the 75-200k per unit range — condos seem to have better yields, but come with risks of financial insolvency and/or HOA fee rises. This is one of the reasons that, while I have offers out in SD, I’m also looking in NJ and the outer boroughs of NYC.
You can get an 1-4 family in a decent area a lot cheaper than in SD. In the case of NYC, purchase prices are higher than NJ, but taxes make Californian property taxes look horrifically expensive. You can end up paying $100/mo for a $300k house or $300/mo for one worth a million or so. (This only applies to 1-3 unit buildings — 4+ units, even if they’re condos, have much higher tax rates(*).)
(*) – taxes are often vastly reduced for new-build condos for a period of 10-20 years. Even if not, my rate is about $1000/yr per $100k.
ParticipantOut of those 1000 buyers, how many will seriously put in offers AND be qualified during the period that those same 21 listings are on the market? Not saying this is an ideal situation, but you have to keep in mind that not everyone buys at the same time.
Some may even go elsewhere for investments since the East Coast and parts of the South are in a similar pickle now as SD was two years ago. (And it’s a lot easier to get a decent cap rate on 1-3 families there than in SD.)
ParticipantAlso, say you have 100,000 buyers per year and 100,000 sellers per year. In my imaginary world, all listings will go into contingent and never go back into active within exactly one week. Assuming an even rate of sales, you’d end up with under 2000 actives on MLS at any given time.
ParticipantSome buyers will drop out and wait it out, or buy investment property in another state. Other houses will be short sales, where the seller will take the first offer likely to stick. 5000 houses. 11,000 buyers. That still leaves a 45% chance of a buyer matching with a seller. Get to it.
ParticipantJust because they’re going into contingency quickly doesn’t prohibit someone with a quick broker from getting in an offer. There are also other ways of buying, like REO (not trustee) auctions.
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