[surveyor]

As a landlord, I usually raise rents by 3-5% per year. Any more than that here will cause most people to move to another location. A smart landlord will not try to raise the rent by too much unless the market rent in the area is about 20-30% higher than what they are charging.

As a landlord, it’s better to keep a tenant rather than try to squeeze every dime out of him/her. It usually costs about $2000-$3000 to advertise and prepare a unit for a new tenant. Certainly if I was a tenant, I would negotiate any rent raises down by noting that fact.

I wouldn’t worry too much about rents. It is highly dependent on salaries, yes, and of course subject to demand and supply, but the pure fact about it is that most landlords are desparate to keep their unit leased and most landlords undercut each other all the time. In terms of economics, rents are a pretty efficient system.

My two cents.

[surveyor]

Long Term View of Housing

“The long term view on housing is equally strange to me. In the long term even though your 150K house is worth helluva lot more now, it still doesn’t change the fact that you paid helluva lot more than what you could have. Since housing moves in cycles, all that matters is when you enter (buy first home) and exit the market.”

I think the point DaCounselor is trying to make is that yes one can enter at arguably a bad point in the market, but that if one hangs on, in the long term real estate mistakes tend to work out. Time is your ally in the real estate realm. There are many homebuyers who buy based on their circumstances, which is arguably more important to them than market timing.

[surveyor]

Out of state Real Estate…

FormerSanDiegan:

Investing in any area tends to be difficult, no doubt about it. It requires a lot of reading, searching, research, re-reading, seminars, and math. And then you have to build up contacts and do a little travelling. It has taken me a good year to set up for it. Still, I think that it is definitely worth the effort though.

And if properly set up, you can have a salary of $200k but have the tax footprint of $50k or even less.

[surveyor]

How about this:

Case 3:

$200k income…

Rent $550k/mo.
20k towards 401k.
5k towards Roth/Regular IRA

Put $20k-40k on a 4 unit cash flow property in Boise ID, North Carolina, Texas property (cash flows about $100-$300/mo.). Depreciate $100k to $200k property to offset taxes (results in about $800-$1600 tax savings).

Lower your taxes and be able to get cash flow…

My two cents.

[surveyor]

I recommend the following:

1. Educate yourself about the real estate market, its ups and downs, its potential. Read a lot of books.

2. Save your money, pay off any loans, and minimize expenses. Keep track of your credit score and try to improve it.

3. Upgrade yourself and keep trying to get better at your job and try to get more pay.

4. Study up about taxes and how to reduce your taxes.

After that, everything will take care of itself and you’ll be able to do it. Good luck! This is the easiest country in the world to get rich and do well.

[Author]

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