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If landlords are losing money on their properties, then they are very poor at negoating the properties and over paid. That makes them very poor investors, not landlords, because landlords are in this to make money, not lose.
You can call them whatever you want, but it doesn't change the fact that you can rent a house from them.
And if they cant cover the mortgage, then you wont be renting from them, you'll be renting from the bank.
Thank goodness that won't be happening to me
The thing is, we lucked out, we know this guy. We worked out a deal where he lowered the rent and we would take care of his property. In short, we are the IDEAL renters. We are taking down the awful wallpaper, repainting, doing some awesome faux finish, we do our own repairs, he just reimburses us for the supplies (comes off the rent )
We get to enjoy living in a master planned community, in a gorgeous custom home (3,000 sq ft) while we save even more money to build the house of our dreams. We are going to stay here for another 2 years. Then we'll make our move. Whether we rent again (from him or someone else) is something that we will decide at that time. We pay $1,250 per month rent with no HOA dues (but we get the privilege of using the community pools, beach club,etc) and we are in a neighborhood that has $300K homes. Is that a deal or what?
Our last home was in the neighborhood of $150K and we paid more in mortgage, taxes and insurance than we do in rent!!
So it all depends on the circumstance. We will not rent from an apt. complex and we will only rent through someone we know. Heck our realtor was even willing to cut us a deal on her rental home b/c she knew how handy my husband is!! (the house was too small, though) So see folks, if you work it from the right angle, you can
SAVE money in our situation everybody wins. In two years, our landlord friend will have his house completely updated and ready to sell if he wants.
If landlords are losing money on their properties, then they are very poor at negoating the properties and over paid.
As for the prices of properties going up faster then rent, what does that have to do with a landlord? Landlords bought properties 10 years ago, at their current market. If these new inflated prices of properties are more then the market will bear for rent, then the landlords did a very poor job at buying the properties at a price the rental rates would not bear to cover the expenses..
That makes them very poor investors, not landlords, because landlords are in this to make money, not lose, when properties are over inflated to "buy".. then true landlords/property investors, do not buy, they wait until the market rents will cover the expenses..
Or maybe it makes them owners who would really rather sell, but no way are they going to give their house away (translation: accept current market value for it) so they've decided to hang onto the place, rent it out, and make up the difference between what they're able to get in rent and their monthly costs. Meanwhile they're waiting for the magical turn around in the market when they will be able to get what they think their house is worth. I see it here all the time. If most of them ran the numbers and looked at things realistically they'd probably dump the properties for whatever they can get now... but whatever. Obviously they're not exceptional investors to begin with.
If folks bought prior to 2003 or so here they will most likely be able to be landlords as per your definition (if they haven't HELOC'd the place to death) Otherwise a whole lot of folks who are renting out properties are just poor investors. In fact I'm starting to see renters who are looking for ways to check up on the financial standing of the folks they are looking at renting from. Bit of a turn around, eh?
But as KCfromNC pointed out it depends on the area. Where we are; even though we're more than covering the owners' cost with our rent, (they bought in 1998) there is no way we could buy the house we're renting for anywhere close to what we pay in monthly rent at today's prices. (I expect that to change in coming years) So for us your contention below doesn't make a whole lot of sense.
Quote:
Originally Posted by pghquest
You do realise when someone rents a home, that the rent has to be enough for the landlord to pay the taxes, insurance, upkeep and repairs dont you?
The landlord takes your rent, pays the taxes, insurance, upkeep, mortgage, and pockets the difference..
Or maybe it makes them owners who would really rather sell, but no way are they going to give their house away (translation: accept current market value for it) so they've decided to hang onto the place, rent it out, and make up the difference between what they're able to get in rent and their monthly costs. Meanwhile they're waiting for the magical turn around in the market when they will be able to get what they think their house is worth. I see it here all the time. If most of them ran the numbers and looked at things realistically they'd probably dump the properties for whatever they can get now... but whatever. Obviously they're not exceptional investors to begin with.
If folks bought prior to 2003 or so here they will most likely be able to be landlords as per your definition (if they haven't HELOC'd the place to death) Otherwise a whole lot of folks who are renting out properties are just poor investors. In fact I'm starting to see renters who are looking for ways to check up on the financial standing of the folks they are looking at renting from. Bit of a turn around, eh?
But as KCfromNC pointed out it depends on the area. Where we are; even though we're more than covering the owners' cost with our rent, (they bought in 1998) there is no way we could buy the house we're renting for anywhere close to what we pay in monthly rent at today's prices. (I expect that to change in coming years) So for us your contention below doesn't make a whole lot of sense.
Exactly, they are poor investors, exactly what I stated.
Did you catch his Wall St. Unspun radio show last night? Gee, I wonder who whizzed in his cheerios?
You know you're investing with the right guy/gal when they are laughed at by the talking heads on Fox/CNBC/Bloomberg/etc. This is especially true when they refer to you as anti-American, an anarchist libertarian or otherwise.
I completely agree. But what I don't understand is why Fox Business still lets him on the air. I love seeing him on there calling everybody on their BS cheerleading, but I would have to think that eventually Fox will give him the boot too - especially when the markets get worse and everybody sees that he is 100% right in his assessment of the US economy.
Have you noticed that Neil Cavuto gives him a lot more respect lately? Somebody was trying to mock Peter last week and Cavuto jumped in and said, "but Peter has been right". I'll bet that Cavuto is now a client, undercover of course.
I completely agree. But what I don't understand is why Fox Business still lets him on the air. I love seeing him on there calling everybody on their BS cheerleading, but I would have to think that eventually Fox will give him the boot too - especially when the markets get worse and everybody sees that he is 100% right in his assessment of the US economy.
Have you noticed that Neil Cavuto gives him a lot more respect lately? Somebody was trying to mock Peter last week and Cavuto jumped in and said, "but Peter has been right". I'll bet that Cavuto is now a client, undercover of course.
I personally think Fox biz wants the contrarian to the talking heads. It's part of the "fair and balanced" mantra. Like Hannity/Colmes. Of course, in the H/C case, burnt on the outside and frozen on the inside isn't exactly the balanced I was looking for.
Neil is an irrelevant yes man, IMHO. A closest Statist just like Charles Payne. At least Mike Norman is straight up about being a socialist and doesn't skirt the issue. But, you're right, considering that EuroPac is getting accts from Goldman Sachs et al, I wouldn't doubt some high fliers are going his way. The commish is pretty high but I think the services are very good.
People need to buy houses every year no matter what the market conditions.
I agree - except that at some point logic has to come into the equation. If I was looking at houses and all I could 'afford' was a $340K townhouse that had sold for $160K just two years before - I think I would pass and figure something else out. Judging by the numbers of foreclosures and shortsales in my old neighborhood, I think there was a lot of speculation going on - and not people that "had" to buy.
People need to buy houses every year no matter what the market conditions.
I would contend that while people may have to move, they don't have to buy, especially "no matter what the market conditions"
Obviously plenty of folks did not make wise financial decisions when it came to purchasing houses in the past few years. Maybe the PP is right and at some point logic will enter into the decision of whether to buy or not. Personally I'm not so sure. But I do think tightening credit standards will have an impact and some of the people you referenced who "need to buy" won't have that option, even if they have no problem plunking down money on an overpriced, declining asset.
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