Phoenix Real Estate Market Keeps Tanking (Scottsdale, Carefree: professionals, assess, vacation)

[Howard Roark]

Originally Posted by Zippyman

The "get rich quick" types were buying during the bubble, not after. There were people during the bubble who had argument like yours in support of housing never falling here, one in particular, touted " year-round-golf" as one reason values would never crash here. Another of my favorites was the guy who bought homes in bubbilicious areas around the country, and touted his Zillow "gains" weekly, some on homes that weren't even built yet...

Enjoy your rental, but be sure to get that check out soon, it's almost "checks to the bank day".

I am a renter, that is for sure. Make that TWO checks I send. I rent TWO apartments and very well worth it. My tax break is several times the what I would get from a MID. BTW I can retire tomorrow with an average annual retune of $115,000 from my assets, based on a 7.8% ARR.

[mjd2k]

Originally Posted by ReadyFreddy

Tenant occupied real estate is one of the most illiquid assets there is. I agree that people who invest in it do it for the income first, capital gains second. If you want an asset you can dump "in a heartbeat" when you think it's peaked, and re-invest elsewhere, rented houses should not be your first choice (or second, third, or fourth).

Not only do they take a long time to vacate and sell, the transactions costs are HUGE relative to other investment classes.

Over the years I have had up to 12 doors at a time. Currently have four rentals and two homes. I always invested strictly for appreciation. Even now with my properties paid off I'm wondering if the revenues are worth it because appreciation has flattened or become negative. Have been dumping them over the last few years

Tenant issues, repairs, vacancies, upgrades, are a drain that most people don't account for. A new AC unit and a months vacancy, income tax etc could wipe out a year profits.

I'm starting to wonder if I should be buying a rental in Phoenix because people seem so happy with their returns. But a 40% return per year on a 80$k home doesn't make me drool as that can be gone after income tax and a new AC unit. I'd only be happy if it appreciates to about $120k. Tomorrow I'm headed to work on a property that will likely need 25$k in bsmt repairs.

Note to mr Roark. You don't need to be Trump to make money in RE. Saving wages is a hard way to get ahead. Many people have made double their wages in one year of appreciation with a couple hours of work.

[Potential_Landlord]

I think we should refrain from generalizations about asset classes and also keep this about the Phoenix RE market. When comparing different asset classes, you have to look at several things like risk vs. returns, momentum, yield and personal preferences like how much control and personal time do I want to have / spend. There are always phases when one class trumps another and then the relationship changes. There is a great danger of comparing apples with oranges. Let's keep it at that - there is the right asset class for everyone. Some will do better with stocks, other with RE investments, and another person is doing great with their own business. It's a big world afterall. I'm just glad that we have the horrors of the worst RE crash ever in Phoenix behind us and are on the forefront of the recovery here. As with the stock market and RE market crashes: if we go through the most terrible crashes, there are also the most awesome opportunities in the recovery. I think Warren Buffet stated this multiple times and he bought stocks of all kinds including RE related stocks hand over fist. He also recommended buying homes. While nobody's timing is correct 100%, he is an exceptionally astute investor. So, let's go for it.

[jimj]

Originally Posted by Howard Roark

What stops the government from confiscating your Phoenix rentals?

You mean other than a big gun?

[jimj]

Originally Posted by Potential_Landlord

I think we should refrain from generalizations about asset classes and also keep this about the Phoenix RE market. When comparing different asset classes, you have to look at several things like risk vs. returns, momentum, yield and personal preferences like how much control and personal time do I want to have / spend. There are always phases when one class trumps another and then the relationship changes. There is a great danger of comparing apples with oranges. Let's keep it at that - there is the right asset class for everyone. Some will do better with stocks, other with RE investments, and another person is doing great with their own business. It's a big world afterall. I'm just glad that we have the horrors of the worst RE crash ever in Phoenix behind us and are on the forefront of the recovery here. As with the stock market and RE market crashes: if we go through the most terrible crashes, there are also the most awesome opportunities in the recovery. I think Warren Buffet stated this multiple times and he bought stocks of all kinds including RE related stocks hand over fist. He also recommended buying homes. While nobody's timing is correct 100%, he is an exceptionally astute investor. So, let's go for it.

Well said and quite true. People like investments are all different, their goals,risk aversion and personality dictate what they will or will not do. Thankfully there's still something for everyone out there including RE in AZ.

[pgc323]

Okay...I guess it's settled. We will continue to discuss real estate in this thread.

[mjd2k]

Maybe a new thread. "is Phoenix RE a good investment". I'm interested in that discussion. I told my wife I'm smart but I'm not so I'd like to hear others analysis

[Johnhw2]

I support Howard's right to express his views with or without qualifications. When the real estate bubble was being created, many of us non real estate experts could see the bubble but those in the business didnt or didnt try to address it. So when insiders say something I need to see their cred to see where their bias is... with non real estate pros, those of us outside the business can use common sense as we did when the bubble was appearing.

[Howard Roark]

I am greatly concerned by a lack of balance. Someone posted earlier that there are way too many RE agents here. Well that poster was saying the same as me without being direct.


Here I will say it: there are far too few people here urging caution and common sense in how to spend or invest the biggest amount of their savings and laying a potential trap in a Phoenix mortgage, which trapped a good deal of people RECENTLY! It could prevent them from needed mobility to keep a career.

Originally Posted by Johnhw2

I support Howard's right to express his views with or without qualifications. When the real estate bubble was being created, many of us non real estate experts could see the bubble but those in the business didnt or didnt try to address it. So when insiders say something I need to see their cred to see where their bias is... with non real estate pros, those of us outside the business can use common sense as we did when the bubble was appearing.

[Howard Roark]

To each his own. Moderator cut: snip