San Diego, CA
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In United States
Registered Sep 03, 2010
parkeld's most recent comments:
- On 7 Jan 2013
All: the quote at the top of the thread ending with the word slavery is not the writing of the author of the article linked to. It is a quote from Pope Leo XIII (of the 19th century) used by the authors of the book being reviewed in the article linked to. I believe the intention of the quote is to get people to question whether or not capitalism and freedom or happiness are aligned and how or why not.
The point as I see it is that capitalism is a powerful and efficient engine to provide goods to the market, but because of its ability to create and shape never-ending desires for more or better it ends up never satisfying anybody and misallocating capital by producing goods that don't increase happiness. The paradox that, above a basic level, happiness and material wealth are not strongly correlated argues against capitalism as a generator of happiness, or what the authors call a "good life". They then propose some government interventions to tweak more happiness out of capitalism...
- On 14 Dec 2012
Our House Buying Experience,
I understand your pain, but you don't sound ready to buy yet. You need to wait. For 500k you can buy an apartment complex in San Bernardino, hire management, and have 30-60k per year extra income. Why buy a house in Walnut Creek or whatever with a 1% capitalization rate when you can get 8% elsewhere? Plus you get depreciation from an investment property, so the taxes from the extra income are modest. If you want to get into real estate investing (it is always investing, even if you want to live there), buy something where the rent would more than enough to cover the expenses and mortgage to be safe. However, don't pretend that just because you put 200k down and your mortgage will only be 1500/month that you're getting a deal. You should do the calculation assuming you put zero down. That money could be invested elsewhere!
I do discounted cash flow (DCF) analysis on my investments, but a rule of thumb can be to pay around 80-160x the rent for a property. A house that rents for $3000 should be bought for a max of 3000x160=480000 if it is in top condition. When buying investment property, I look for 100x rent or better prices, and I usually get them. I did splurge and pay 135x the rent for a condo in a good neighborhood in San Diego. This rule of thumb is sensitive to interest rates.
If you're not used to doing math on investments like this, take a personal finance course or real estate finance course at the community college or online. It will pay off forever. Don't tie yourself to an eternal expense.
I don't know your neighborhood, but with CA tax rates of 1.07% on property (Berkeley is much higher) you would need a 500k house to rent for 3,300 per month in order to be able to rent it out and break even. If it is possible to rent out a house and break even, you are free to move if needed in the future without being slammed by the extra expense of the house you don't want to sell (bad market, underwater, whatever reason). I make assumptions in my calculation such as 11 months of rent received per year (which is typical in my experience).
- On 13 Aug 2012
mom and pop landlord need credit check service,
They can use an unlawful detainer law firm to get the notice sent and then to through with the eviction if needed. No need to go to the property personally at all. A written rental agreement with a no pets or no dogs policy would be helpful, but there are other ways out if you don't have that.