Price this rental!


By RentingForHalfTheCost   Follow   Mon, 4 Feb 2013, 1:19pm   787 views   27 comments
In Pleasanton CA 94566   Watch (1)   Share   Quote   Permalink   Like   Dislike  

Now is your chance to back up the owning is cheaper claims.

Looking at the rent-vs-buy calculator with basic assumptions this place should sell for 600-650K to be on par with the $4285/mth.

Anyone care to take a stab at the sale values of this place? Dig up some comparable sales in the area? It might just make my handle speak the truth in the SFBA. Hey, if I am wrong then I would be a buyer then. ;)

http://livelovely.com/listing/6775700/5130-Foothill-Road-Pleasanton-CA-94588

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  1. tatupu70


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    1   2:56pm Mon 4 Feb 2013   Share   Quote   Permalink   Like   Dislike  

    $600-650 is way too low. It all depends on your assumptions, but according to NYT calculator with 2% inflation of rents and prices, even at $1MM, it's cheaper to buy than rent assuming a 7 year hold time.

  2. RentingForHalfTheCost


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    2   1:59pm Tue 5 Feb 2013   Share   Quote   Permalink   Like   Dislike  

    tatupu70 says

    $600-650 is way too low. It all depends on your assumptions, but according to NYT calculator with 2% inflation of rents and prices, even at $1MM, it's cheaper to buy than rent assuming a 7 year hold time.

    Now sure why you have to use the NYT calculator as opposed to the perfectly fine calculator on this site. Weird. Anyway, I put in your 2% inflation on rents and prices, but don't get anything near 1MM. Maybe you are doing 0% down, and don't have any investment growth.

  3. tatupu70


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    3   2:43pm Tue 5 Feb 2013   Share   Quote   Permalink   Like   Dislike  

    RentingForHalfTheCost says

    Now sure why you have to use the NYT calculator as opposed to the perfectly fine calculator on this site. Weird. Anyway, I put in your 2% inflation on rents and prices, but don't get anything near 1MM. Maybe you are doing 0% down, and don't have any investment growth.

    Good point. I should have used Patricks. I put it in his calculator and the only assumption I changed was 2% price growth. It comes out with a value of $1.1M.

    What are your assumptions?

  4. RentingForHalfTheCost


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    4   2:48pm Tue 5 Feb 2013   Share   Quote   Permalink   Like   Dislike  

    tatupu70 says

    RentingForHalfTheCost says

    Now sure why you have to use the NYT calculator as opposed to the perfectly fine calculator on this site. Weird. Anyway, I put in your 2% inflation on rents and prices, but don't get anything near 1MM. Maybe you are doing 0% down, and don't have any investment growth.

    Good point. I should have used Patricks. I put it in his calculator and the only assumption I changed was 2% price growth. It comes out with a value of $1.1M.

    What are your assumptions?

    Assumptions attached. And yes, I have been getting 12% and more after-tax returns in this crazy market. It has actually been more like 16% so I am giving a little here.

  5. tatupu70


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    5   2:56pm Tue 5 Feb 2013   Share   Quote   Permalink   Like   Dislike  

    RentingForHalfTheCost says

    Assumptions attached. And yes, I have been getting 12% and more after-tax returns in this crazy market. It has actually been more like 16% so I am giving a little here.

    nominated.

  6. varmint


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    6   3:52pm Tue 5 Feb 2013   Share   Quote   Permalink   Like   Dislike  

    Last sold price 1,235,000 in 2009. Estimated current price 1.4 - 1.7M.

  7. RentingForHalfTheCost


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    7   4:17pm Tue 5 Feb 2013   Share   Quote   Permalink   Like   Dislike  

    varmint says

    Last sold price 1,235,000 in 2009. Estimated current price 1.4 - 1.7M.

    That is one hell of a lot of $4285 chunks. Forget interest rates for a minute. Lets just say we only have to pay back principle. Lets say the place can be sold for 1.55M (half way in your range). Just in paying $4285 in principle reduction payments it would take us this many years.

    1550000/(4285*12) = 30.1 Years!!!

    Yah, I get it now. You need to forget about interest, taxes, maintenance, realtor fees, etc. I'm with the owning is better than renters now. It all makes sense. ;)

  8. tatupu70


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    8   4:37pm Tue 5 Feb 2013   Share   Quote   Permalink   Like   Dislike  

    RentingForHalfTheCost says

    Yah, I get it now. You need to forget about interest, taxes, maintenance, realtor fees, etc. I'm with the owning is better than renters now. It all makes sense. ;)

    Well, to be fair, you also forgot about inflation and tax deductions. But $1.5M seems a bit high.

  9. iwog


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    9   4:54pm Tue 5 Feb 2013   Share   Quote   Permalink   Like   Dislike   Protected  

    Anyone who wants to make a universal argument about renting being cheaper than owning on a one-percenter $1 million plus house in Pleasanton is delusional.

    What I find interesting is that you yourself have claimed numerous times that these homes are plentiful in the $3000 range so where the hell did $4285 come from?

    Most homes are now cheaper to buy than rent. It's sad you can't handle the truth, but it happens to be the truth regardless.

  10. varmint


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    10   5:02pm Tue 5 Feb 2013   Share   Quote   Permalink   Like   Dislike  

    tatupu70 says

    RentingForHalfTheCost says

    Yah, I get it now. You need to forget about interest, taxes, maintenance, realtor fees, etc. I'm with the owning is better than renters now. It all makes sense. ;)

    Well, to be fair, you also forgot about inflation and tax deductions. But $1.5M seems a bit high.

    No tax deductions, all payments on principle

  11. RentingForHalfTheCost


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    11   7:09pm Tue 5 Feb 2013   Share   Quote   Permalink   Like   Dislike  

    iwog says

    Anyone who wants to make a universal argument about renting being cheaper than owning on a one-percenter $1 million plus house in Pleasanton is delusional.

    What I find interesting is that you yourself have claimed numerous times that these homes are plentiful in the $3000 range so where the hell did $4285 come from?

    Most homes are now cheaper to buy than rent. It's sad you can't handle the truth, but it happens to be the truth regardless.

    The word delusional comes to mind, but in a slightly different context. :)

    I could list 3K/mth homes a dime a dozen for cheaper than owning. That doesn't moot the point I am making here. Kinda like say, yah, but but you can never get a wine stain out of white pants.

    The point is, as you are afraid to admit, that renting has never been better and owning might be a good thing if you believe in double-digit appreciation.

    I would like to own, but not when it costs me considerably more than renting. Just my thing I guess, others don't seem to care.

  12. iwog


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    12   3:33am Wed 6 Feb 2013   Share   Quote   Permalink   Like   Dislike   Protected  

    RentingForHalfTheCost says

    The point is, as you are afraid to admit, that renting has never been better and owning might be a good thing if you believe in double-digit appreciation.

    If renting has never been better, then why do you require a one percenter house to make your point?

    Almost the entire city of Concord is cheaper to buy than rent. Ditto for most of the country. Your desperation is readily apparent by the examples you use.

  13. tatupu70


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    13   4:41am Wed 6 Feb 2013   Share   Quote   Permalink   Like   Dislike  

    RentingForHalfTheCost says

    The word delusional comes to mind

    Yes, for someone who claims to be making 16% after tax on his investments. Delusional is appropriate.

  14. zesta


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    14   6:34am Wed 6 Feb 2013   Share   Quote   Permalink   Like   Dislike  

    RentingForHalfTheCost says

    It has actually been more like 16% so I am giving a little here.

    Funny, your "hot stock picks" a year ago haven't quite done 16% after taxes.

    RentingForHalfTheCost says

    E-man says

    So what's your hot pick for now?

    BRCM (long on 1000)

    PVG (long on 2000) Sell only when it equals a BA home. ;)

  15. RentingForHalfTheCost


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    15   7:39am Wed 6 Feb 2013   Share   Quote   Permalink   Like   Dislike  

    tatupu70 says

    RentingForHalfTheCost says

    The word delusional comes to mind

    Yes, for someone who claims to be making 16% after tax on his investments. Delusional is appropriate.

    Dow at 14000 and people still question the wisdom of stocks. That is delusional. Crap, almost all indexes have performed double digit gains since 2009. Housing? Not so good. Delusional is right

  16. tatupu70


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    16   7:42am Wed 6 Feb 2013   Share   Quote   Permalink   Like   Dislike  

    RentingForHalfTheCost says

    Dow at 14000 and people still question the wisdom of stocks

    Who questions the wisdom of stocks? So, you're basing your estimated investment performance over the next 30 years on stock gains over the last 3 years? Brilliant.

  17. RentingForHalfTheCost


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    17   7:46am Wed 6 Feb 2013   Share   Quote   Permalink   Like   Dislike  

    zesta says

    RentingForHalfTheCost says

    It has actually been more like 16% so I am giving a little here.

    Funny, your "hot stock picks" a year ago haven't quite done 16% after taxes.

    RentingForHalfTheCost says

    E-man says

    So what's your hot pick for now?

    BRCM (long on 1000)

    PVG (long on 2000) Sell only when it equals a BA home. ;)

    Your view is too narrow. My Broadcom avg cost is $22 and Pretium below $10. How is that bad? Good companies do still go on sale from time to time. Then I just invest more. Lets talk again about these 2 companies in a few years. That'll be more years of decaying wood and rusty nails later.

  18. RentingForHalfTheCost


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    18   7:47am Wed 6 Feb 2013   Share   Quote   Permalink   Like   Dislike  

    tatupu70 says

    RentingForHalfTheCost says

    Dow at 14000 and people still question the wisdom of stocks

    Who questions the wisdom of stocks? So, you're basing your estimated investment performance over the next 30 years on stock gains over the last 3 years? Brilliant.

    Can you post your rules of debate for all to see? I would like to comply.

  19. tatupu70


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    19   7:56am Wed 6 Feb 2013   Share   Quote   Permalink   Like   Dislike  

    RentingForHalfTheCost says

    Can you post your rules of debate for all to see? I would like to comply.

    Sure--if you make an obviously outrageous statement that you expect to get 16% after tax returns on your investments, I'd expect some explanation as to how/why you arrived at that number.

    Avg. stock market return is 7% before taxes last I checked, so you are obviously doing something different.

    Honestly, you should be managing other peoples' money if you can truly make that return on a consistent basis.

  20. RentingForHalfTheCost


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    20   8:43am Wed 6 Feb 2013   Share   Quote   Permalink   Like   Dislike  

    tatupu70 says

    RentingForHalfTheCost says

    Can you post your rules of debate for all to see? I would like to comply.

    Sure--if you make an obviously outrageous statement that you expect to get 16% after tax returns on your investments, I'd expect some explanation as to how/why you arrived at that number.

    Avg. stock market return is 7% before taxes last I checked, so you are obviously doing something different.

    Honestly, you should be managing other peoples' money if you can truly make that return on a consistent basis.

    I expect it for at least the next 5-7 years. The question I have on my mind is when it will revert back to the mean. The crazy thing in all this is that as the market appreciates so does the wealth of the investors. This will in effect has some upward pressure on house prices. When people have more wealth in their IRAs/401k/brokerage accounts then they will be okay to pay more for a house.

    I think the biggest decision I can make as a renter, is to time the move into a buyer to maximize my stock appreciation but be ahead of the masses that will eventually move over into buyers.

    I don't think we are there yet, but it will happen in the next few years. I wish I knew when as we all would.

    So, I may very well be wrong, but I believe the 15-20% growth in stocks is still around and house prices will stay struggling to eke out low single digits. That has been the pattern for the last 3. I don't begin to argue that this is the norm, nothing is normal about this market. The trick is to be one step ahead of the masses.

    Remember, I am also an owner (5 houses/condos), none of them in the SFBA or even close. All my comments about rent/buy are always directed at the SFBA chaos.

  21. RentingForHalfTheCost


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    21   8:45am Wed 6 Feb 2013   Share   Quote   Permalink   Like   Dislike  

    tatupu70 says

    Honestly, you should be managing other peoples' money if you can truly make that return on a consistent basis.

    Almost everyone I know that I talk about stocks has experienced substantial gains in the last 3 years. I am not abnormal here. Unfortunately, when your wealth is all tied up in a house, you can't really benefit too much from this move.

  22. tatupu70


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    22   8:58am Wed 6 Feb 2013   Share   Quote   Permalink   Like   Dislike  

    RentingForHalfTheCost says

    Almost everyone I know that I talk about stocks has experienced substantial
    gains in the last 3 years. I am not abnormal here. Unfortunately, when your
    wealth is all tied up in a house, you can't really benefit too much from this
    move.

    Sure--I've gained a bunch in stocks over the last few years too. I lost a bunch in the 3 years prior to that.

    I'm not dumb enough to believe that the last 3 years return is indicative of future returns though... Do you really think stocks will continue to gain at the current pace forever???

  23. RentingForHalfTheCost


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    23   9:11am Wed 6 Feb 2013   Share   Quote   Permalink   Like   Dislike  

    tatupu70 says

    RentingForHalfTheCost says

    Almost everyone I know that I talk about stocks has experienced substantial

    gains in the last 3 years. I am not abnormal here. Unfortunately, when your

    wealth is all tied up in a house, you can't really benefit too much from this

    move.

    Sure--I've gained a bunch in stocks over the last few years too. I lost a bunch in the 3 years prior to that.

    I'm not dumb enough to believe that the last 3 years return is indicative of future returns though... Do you really think stocks will continue to gain at the current pace forever???

    I think for the next 5-7 years while companies keep benefiting from the free-money credit and people slowly get back on stable economic ground. Nothing is forever, especially in the market.

  24. zesta


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    24   11:03am Wed 6 Feb 2013   Share   Quote   Permalink   Like   Dislike  

    RentingForHalfTheCost says

    Your view is too narrow. My Broadcom avg cost is $22 and Pretium below $10. How is that bad? Good companies do still go on sale from time to time. Then I just invest more. Lets talk again about these 2 companies in a few years. That'll be more years of decaying wood and rusty nails later.

    Well, that was your pick at the time when asked.

    16% annually after taxes is amazing, and I would hope that your two "hot stocks" would outperform the rest of your portfolio instead of dragging down the average.

    How many years have you been "averaging 16% after taxes?"

  25. RentingForHalfTheCost


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    25   12:47pm Wed 6 Feb 2013   Share   Quote   Permalink   Like   Dislike  

    zesta says

    RentingForHalfTheCost says

    Your view is too narrow. My Broadcom avg cost is $22 and Pretium below $10. How is that bad? Good companies do still go on sale from time to time. Then I just invest more. Lets talk again about these 2 companies in a few years. That'll be more years of decaying wood and rusty nails later.

    Well, that was your pick at the time when asked.

    16% annually after taxes is amazing, and I would hope that your two "hot stocks" would outperform the rest of your portfolio instead of dragging down the average.

    How many years have you been "averaging 16% after taxes?"

    We can hope, but sometimes, especially in high tech and gold miners, time is your friend. There is no question to me that PVG is sitting on $2B of gold and it will be realized in time. It is also no question that Broadcom is well diversified in the mobile and network space so it will benefit from long term growth. I invest with a longer horizon than 1 yr, and I think we all should. If someone asked me what stock will be higher next year I don't have a clue. Micro and Macro economics can swing things crazy over short terms, however over the long term I am pretty confident that these two players will do well. That is all I claim to know, not what it will do in months or even a year.

    When you are diversified, as I try to be, you can have a few short term under-performers and it doesn't really matter. I have done well in some that I didn't expect.

    KRFT, HSY, PPP, PG, GE, BAC, WFC, and more.

    Anyone putting too much weight on two holdings is really gambling IMHO.

    I've been catching 16% or more since 2007. Solid companies with good dividends and also selling cover-calls to the greedy or the people trying to hedge. Works great in this market IMHO.

  26. zesta


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    26   1:51pm Wed 6 Feb 2013   Share   Quote   Permalink   Like   Dislike  

    RentingForHalfTheCost says

    KRFT, HSY, PPP, PG, GE, BAC, WFC, and more.

    Anyone putting too much weight on two holdings is really gambling IMHO.

    I've been catching 16% or more since 2007

    From the stocks you've posted, I don't see it, unless you've been buying at the absolute bottoms and selling at the peaks.

    I agree it's important to be diversified, but diversification SHOULD bring you closer to the average, and AT LEAST 16% OR MORE AFTER TAX EVERY YEAR SINCE 2007 is way way above average. If you're doing covered calls as well you're probably hitting a lot of short-term cap gains taxes as well, which makes it all the more amazing.

    If it's all true, more power to you.

  27. RentingForHalfTheCost


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    27   2:10pm Wed 6 Feb 2013   Share   Quote   Permalink   Like   Dislike  

    zesta says

    RentingForHalfTheCost says

    KRFT, HSY, PPP, PG, GE, BAC, WFC, and more.

    Anyone putting too much weight on two holdings is really gambling IMHO.

    I've been catching 16% or more since 2007

    From the stocks you've posted, I don't see it, unless you've been buying at the absolute bottoms and selling at the peaks.

    I agree it's important to be diversified, but diversification SHOULD bring you closer to the average, and AT LEAST 16% OR MORE AFTER TAX EVERY YEAR SINCE 2007 is way way above average. If you're doing covered calls as well you're probably hitting a lot of short-term cap gains taxes as well, which makes it all the more amazing.

    If it's all true, more power to you.

    You can't see it? I never bought these companies this year, I owned them already from previous years.

    Gains on appreciation and dividend re-investment

    KRFT: split into two companies (KRFT and MDLZ), (20%)

    HSY: 61 to 80 price action, (35%)

    PPP: 3 to 6.30 ( 110%)

    PG: 64 to 76 (25%)

    GE: 19 to 23 (25%)

    BAC: 8 to 12 (50%)

    WFC: 30 to 35 (20%)

    I am talking about the last 12 months. The beauty of stocks is that when they are in the toilet your dividends are buying more low, then when they are high they buy less. The ticket is to find stable companies that only grow the dividend and you get automatic dollar cost averaging. Works until it doesn't. ;)

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