Welcome to City-Data.com Forum!
U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > General Forums > Real Estate
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
Reply Start New Thread
 
Old 04-13-2024, 07:48 PM
 
Location: Formerly Pleasanton Ca, now in Marietta Ga
10,391 posts, read 8,632,128 times
Reputation: 16752

Advertisements

Quote:
Originally Posted by mathjak107 View Post
rents are based on what markets allow .

markets don’t care if you have a 7% mortgage and those around you who own rentals don’t .

they don’t care if you spend five figures on a roof or had to renovate to stay competitive.

in many areas it can be tough as a new buyer of a property to get close to your costs without depreciation.

it took us about 7 years to see our first profit not including depreciation.

two weeks after we bought the stock market here crashed in 1987 and real estate fell about 20-25% .

our entire down payment vanished as the equity we had vanished .

we were about even but only with depreciation.

i tried raising the rent just 25 a month and we lost our tenant .

we had to go a month with no tenant defeating the increase we tried to get .

so not everything is recovered via a tenant ….many times a landlord has to pay their dues like any long term investment to first see a profit


which is why i was never big on being a conventional landlord . i really only like the special situation stuff.

i have no interest in just collecting rents , and waiting years for appreciation.

which is why i went after the methods i did for investing in real estate
You are right in that it is market driven. Eventually increasing overhead like property taxes does raise rents overall, but it lags behind.
Reply With Quote Quick reply to this message

 
Old 04-14-2024, 02:47 AM
 
107,122 posts, read 109,484,448 times
Reputation: 80519
Quote:
Originally Posted by aslowdodge View Post
You are right in that it is market driven. Eventually increasing overhead like property taxes does raise rents overall, but it lags behind.
eventually inflation raises rents , incomes and investment balances too as well as supply and demand. among other things .

but the point is they aren’t joined at the hip or based on anyone’s expenses in particular.

and rents certainly can lag .

odds of finding an investment property in a desirable area and making money day one are slim unless one pays cash and then once you calculate what that cash has given up it’s doubtful its a positive return.

real estate is usually a long term investment and one pays their dues in the early years of ownership
Reply With Quote Quick reply to this message
 
Old 04-14-2024, 07:48 AM
 
Location: Savannah GA/Lk Hopatcong NJ
13,416 posts, read 28,803,958 times
Reputation: 12103
Quote:
Originally Posted by Mightyqueen801 View Post
I took a rental in another city. Still have a condo in a townhouse in NJ, which is closer to where I am working right now. I will likely sell my condo in a year or so and maybe move out to where I keep the apartment.

The landlord is a company started by a man who years ago bought old brick houses and converted them to apartments. He died some time back, and his daughter now owns the company. They have approximately 500 apartments. They keep them up, do maintenance regularly, and are well-run and organized. This is much different from the jerk from whom I rented back in the 00s before I bought my place. He would fix nothing, took three weeks to fix the broken furnace in winter because he was in Europe and his maintenance guy flew home to Costa Rica while the boss was away, and I had to buy space heaters to heat the upstairs of the house. Then when I moved out, he tried to get me to pay for things that were broken or missing when I moved in and apparently "forgot" that I had sent him a letter listing those things when I'd first taken the lease. Guess he thought I was stupider than I am.

I think that's probably typical of most small-time landlords who just want to collect rent and live high on the hog off the rent money but not spend to maintain their properties. This guy only owned four or five houses, which were clustered together, all built in the late 1890s. His real aim was to knock them down and build an office building, but we were too close to a school, there would be traffic issues, and the town council kept turning him down.

Anyway, night and day difference between that landlord and this one. I needed a TV mounted onto the wall, and I stopped in the landlord company's office down the street to ask if it would be OK for me to do that, since they state in their rules that they don't want you making too big of holes in the plaster. They said, "Oh, just put in a work order. Our maintenance guys can do that for you, but you might have to wait because they do urgent or emergency work first." I said fine. The next day, two guys show up, tell me they are glad to do the TV that day because things are slow, and they put up the TV for me. I handed them some cash, and they said, "No, we don't take that, just give us a good review to the landlord."

I am only still here because I was recently given a good work opportunity that pays very well, so I'm going to continue until I get sick of working full-time again, then I will sell my condo and go stay in my apartment until I figure out where I am going to go next. I love the apartment. Two brick walls and a fireplace in the living room, high ceilings, walk to everything I need. And no homeless brother who has taken up residence and won't leave like the one currently in my condo, lol.
Spill the tea Queen where is this place
Reply With Quote Quick reply to this message
 
Old 04-14-2024, 11:14 AM
 
Location: moved
13,697 posts, read 9,791,429 times
Reputation: 23589
Quote:
Originally Posted by Silverfall View Post
This is why an excellent, professional buyer agent is so important. I know I have talked people out of buying homes, and I am sure the other agents on CD have as well to avoid your experience. I think I begged a client not to buy a house three times in 20 years. Most of the time I can talk them out of it with reason so that they don't do what you did.

Only one refused to listen and purchased that home and that was a few years ago. She has been trying to sell it with other agents for two years now. She is on her third agent now. It is still for sale.
Good help is of course eminently useful, whether in real estate or any other scenario with major decisions. But the irony is that I had bought a house that exquisitely fit my criteria. The fault wasn't with my agent, but with me. I had erected a foolish, unrealistic edifice of wishes and criteria. I was punished for this foolishness.

Thus again the point about idiosyncratic risk. Suppose that there's a clickbait article about some hot stock, touted by an "expert". I'm foolish, so I go put 50% or 20% of my net worth or whatever, in that stock. It crashes. I lose. That's horrid, right? But it is an edge case. Most people don't invest that way. If they do, they're dubbed as speculators - which indeed they are. Speculation is costly, and often punitive. Don't want to be punished? Don't speculate! Easy solution: invest in an index fund.

Sure, I can invest in a REIT, thus removing idiosyncratic risk. But one can't live in a REIT. If one wishes to live in owner-occupied housing, one needs to... ahem, buy said housing, correct? So there I am, having bought a house. I've just undertaken idiosyncratic risk. Maybe I'll get lucky. Maybe not. Does one feel lucky?

If we're at a trough in the market, idiosyncratic risk is reduced, because all risk is reduced... much like when stocks happen to be trading in a trough of price to earnings ratio. When markets are frothy, risk is elevated. That doesn't change, even if somebody is a cash-buyer, and "affordability" isn't a concern.

So yes of course... a good agent is helpful, and worth the money. Such an agent may even reduce the idiosyncratic risk. But can she eliminate it entirely?
Reply With Quote Quick reply to this message
 
Old 04-14-2024, 11:35 AM
 
Location: Salem, OR
15,608 posts, read 40,553,969 times
Reputation: 17545
Quote:
Originally Posted by ohio_peasant View Post

So yes of course... a good agent is helpful, and worth the money. Such an agent may even reduce the idiosyncratic risk. But can she eliminate it entirely?
I have had clients that had criteria that I thought were concerning for resale. I talked them through why it would potentially harm them financially. That is what I am talking about when I talk about reasoning with people. I think if your buyer agent didn't talk to you about how your perfectly idiosyncratic criteria might cause you financial harm, then you needed a more professional agent.

This is why attorneys and real estate agents don't do the same thing. It is a different skill set. Nothing is 100%. At the end of the day, it is the buyer's money to lose, but at least I know I went through the educational process with them. I know other agents do the same. Consumers just need to know to look for agents that do that.
Reply With Quote Quick reply to this message
 
Old 04-15-2024, 10:43 AM
 
Location: Formerly Pleasanton Ca, now in Marietta Ga
10,391 posts, read 8,632,128 times
Reputation: 16752
Quote:
Originally Posted by mathjak107 View Post
eventually inflation raises rents , incomes and investment balances too as well as supply and demand. among other things .

but the point is they aren’t joined at the hip or based on anyone’s expenses in particular.

and rents certainly can lag .

odds of finding an investment property in a desirable area and making money day one are slim unless one pays cash and then once you calculate what that cash has given up it’s doubtful its a positive return.

real estate is usually a long term investment and one pays their dues in the early years of ownership
It’s really hard to buy a rental that makes money as it sits. The investors that do the best are doing value add.
For example I bought a house that breaks even as it. I built out a rental in the basement and now it cash flows about 1k a month. Most people don’t look at that type of thing.
Reply With Quote Quick reply to this message
 
Old 04-15-2024, 02:06 PM
 
107,122 posts, read 109,484,448 times
Reputation: 80519
it takes creativity to really make money in real estate unless one wants to wait decades to push up rents enough .

most are nor creative at all
Reply With Quote Quick reply to this message
 
Old 04-16-2024, 08:49 PM
 
Location: Sandy Eggo's North County
10,396 posts, read 6,982,545 times
Reputation: 17061
Quote:
Originally Posted by oregonwoodsmoke View Post
Renters pay property taxes. It is baked into the rent.

But because so many tenants mistakenly believe they don't pay property taxes, they will vote to increase the taxes to pay for expensive over-priced amenities for their town. Then when the taxes go up, the landlord raises the rent to cover the increased cost of maintaining the rental and the tenants get mad because rent has gone up, when they are the ones who voted to raise taxes which raised their own rent.
LOL, I know, I know. I was only kidding!

But, I've actually heard people say, "I don't have to pay prop taxes, since I rent!"

PT Barnum was ahead of his time...
Reply With Quote Quick reply to this message
 
Old 04-17-2024, 02:42 AM
 
107,122 posts, read 109,484,448 times
Reputation: 80519
Quote:
Originally Posted by NORTY FLATZ View Post
LOL, I know, I know. I was only kidding!

But, I've actually heard people say, "I don't have to pay prop taxes, since I rent!"

PT Barnum was ahead of his time...
actually you brought up another thing .

most renters get the better tax deal …

why ? because they get to fly the empty seats .

owners actually pay real estate taxes and mortgage interest out of their piggy bank so they don’t actually benefit from the standard deduction as like most renters would .

we have so few deductible items that we actually pay out of our piggie bank for that the standard deduction is actually a windfall for us .

we get to use less of the standard deduction then most owners we know . once they go over the standard deduction it is like spending 3 or 4 dollars to win a one dollar prize for many owners as well .

technically we could take the bulk of that standard deduction we get back , having not taken the money out of our piggy bank to pay and put it towards the rent
Reply With Quote Quick reply to this message
 
Old 04-17-2024, 02:11 PM
 
Location: moved
13,697 posts, read 9,791,429 times
Reputation: 23589
Quote:
Originally Posted by mathjak107 View Post
most renters get the better tax deal …

why ? because they get to fly the empty seats . ...
Following your metaphor, renters "get the better deal" by availing themselves of economy of scale, of discounts results from frictions and inefficiencies in the system. In many of America's marquee cities, housing prices have risen much faster than rent. Rent is high, but PITI is even higher... much higher. Viewing houses as a stock, their P/E is very large. This is OK for longtime landlords who bought the building at a time of lower mortgages and taxes, where they manage a tidy profit despite the current market rates on rent. But as happened in my own case, with my former landlord, had I bought that guy out - which I briefly considered! - it would have been a money-loosing "business". Property tax would reset, and that alone would obliterate the gross from one of the four units... so, 25% gross hit right there.

Playing with the rent vs. buy calculators, buying STILL comes out ahead for a single-family house (as opposed to apartment vs. condo), with rosy assumptions on price growth. But if we suppose that a decades' worth of housing-appreciation has been pulled forward and concentrated in 3-4 years courtesy of the pandemic, then the case for buying is weak.
Reply With Quote Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Reply

Quick Reply
Message:


Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Real Estate

All times are GMT -6.

© 2005-2024, Advameg, Inc. · Please obey Forum Rules · Terms of Use and Privacy Policy · Bug Bounty

City-Data.com - Contact Us - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37 - Top