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Actually, it does NOT make for a housing shortage. It makes for a people surplus. The "problem", to the extent it is a problem, can be solved simply having the surplus move somewhere else.
Love to move them someplace else. But tell them to go elsewhere and they immediately reply that this is America and they can move to wherever they want.
We already have states cutting child labor laws to allow 14 year olds to work 40 hours. It's not working.
Can you point me to a reference for that? Regardless of what States do, the Federal law is in effect:
Quote:
The main law regulating child labor in the United States is the Fair Labor Standards Act. For non-agricultural jobs, children under 14 may not be employed, children between 14 and 16 may be employed in allowed occupations during limited hours.
Yes, the better question is, how did supply and demand of housing get so out of whack so quickly? I mean, we have numerous markets around the country that in <2 years increased 50-150%.
What that really means is that 3 years ago the prices were far too low. Landlords screwed up. They could have charged more, but they didn't.
Love to move them someplace else. But tell them to go elsewhere and they immediately reply that this is America and they can move to wherever they want.
The way to tell them to go elsewhere is to raise the rent above what they are willing to pay.
That's the big downside to renting vs owning a home. If you buy a home, your payments will start out higher than an average rent payment, but eventually there will be a tipping point where the rent payments will keep rising each year, while a house payment will stay relatively the same and eventually be cheaper than a way smaller apartment costs.
Mortgage interest rates were falling and hit rock bottom around 2 years ago.
It seems strange he couldn’t refinance the property and get a lower mortgage payment at that time.
Also, if the property tax and insurance increased by several thousand dollars (pretty wild) over the course of a few years, then he should have increased the rent enough to cover those costs.
Can you say where this property was located and how much he initially paid for it?
Of course he should have raised the rent more, but for awhile the trade off was a long term reliable tenant. Then the husband died leaving 4 kids and he didn’t have the heart. He was paying a property manager too, since he was not living in the area.
He did refinance at least once. He bought in 2008, the height of the bubble, for $174k and it took over 10 years to break even. Then, finally this year he sold for $295k. This is in the fastest growing suburb of Savannah, so housing is scarce, both apartments and single family.
Cost is reflecting what people are willing to pay. Landlords aren’t charitable organizations… they offer a residence at a price and someone pays it. Why such a large spike in the past few years? I suppose people are willing to pay more… and have more capacity to do so…
Bingo. Supply and demand. Supply is not keeping up with demand.
Some landlords took advantage of the strong housing market and sold their rentals, so that doesn't help.
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
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Quote:
Originally Posted by BigCityDreamer
Having an adjustable rate mortgage on a rental property doesn't sound like a wise thing to do. ..
Any mortgage, Including an adjustable rate is a great idea for investment property. Interest and cost of loan is100% deductible. that beats the heck out of a personal mortgage.
Interest Might be deductible, but only a percentage, and at your marginal tax rate. (Spend $1000 to get a $100 possible tax deduction). Investment property mortgage= $1000 spent, = $1000 interest 'expense'. Commercial loans are often recalculated every 5 years, might be cheaper to get a LT mortgage at adjustable rate (if available at all).
What that really means is that 3 years ago the prices were far too low. Landlords screwed up. They could have charged more, but they didn't.
That’s not the case. Rents went up when housing values skyrocketed recently and also because of the massive increase in corporate entities and foreign investors buying up single family homes and getting into the rental business.
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