patrick.net

Not trying to be a smart allick...
I live just west of Philadelphia, Pennsylvania (property tax is approaching 3% of the current value of the homes).
I usually vacation in Santa Ynez, Ca., Charleston, SC., Tennessee.
Santa Fe, NM is quite nice, but was surprised when snowed upon one April. Albuquerque is quite nice also.
I'll need to find a place to retire one day (also I grew up in Florida on the east coast).
Question: Is there any reason I would want to consider Phoenix?

I was just listening to a podcast with some guy from phoenix who was bragging about how he sold off a bunch of investment properties to a bunch of dumb investors from California who thought they were getting a good deal.

That's not you is it?

There are 3 groups here...

group 1: Prices will crash to 1975 levels, anarchy and chaos will arise

group 2: bulls

group 3: there are good deals out there, even if prices drop, you have to live somewhere so if rent = mortgage (or slightly less) why not do it, we have somewhat stabilized here and may go flat for years

What surprises me is that the negative group that foresee's the worst, never thinks of yet another version of chaos. Not the chaos of 1975 prices but the chaos where the 1% turn into the 0.5% that own everything!

Most of us will be the 99.5% that mostly rent/slave-fee's to the 0.5%.

Apocalypse is gun-ready, potatoe bags in the basement but when the landlord comes with a tank and threatens to wipe him and his potatoes out in one shot, he'll cough up the monthly rent/slave-fee.

Ownership will be much harder to achieve than ever before because we are in the process right now of investors coming in and picking up the scrap left and right.

Nobody needs stocks but everybody needs a place to live.

I am not a doomsday guy but if you are going to be that negative...consider this version of negativity as well.

SubOink says

monthly rent/slave-fee

I don't equate rent to a slave-fee. That I reserve for the poor bastard that is paying an incredible sum to the banks for that balloon mortgage he was forced to take out to buy a 1000sqft 2/2 in a crappy neighborhood, where after people part their cars on the street you basically have one lane left for people to use. This is the slave-fee, not paying rent to someone who is trying to make an honest living.

I have never rented from an organization, so maybe would have a different opinion then. I have always rented from someone I have met and liked and have actually became friends with most.

RentingForHalfTheCost says

I don't equate rent to a slave-fee. That I reserve for the poor bastard that is paying an incredible sum to the banks for that balloon mortgage he was forced to take out to buy a 1000sqft 2/2 in a crappy neighborhood

The example of balloon mortgage is also a slave fee...you are right. But make no mistake about it...rent is exactly that. You pay as long as you live in a rental and never built equity, have nothing to show for. Somebody else, gets their house paid off with YOUR money.

At this point those types of mortgages are not really the norm at all. 20% down, 15 or 30 year fixed is. At these low rates it's stupid not to lock it in.

I say slave -fee only to go along with apocalypse's and followers lingo.

SubOink says

You pay as long as you live in a rental and never built equity, have nothing to show

Not true is some cases. I have rented for 14 years and have enough now to basically not need a mortgage if I desired. Instead of taking my savings and putting it into equity and interest, I put it into good old dividend paying stocks. My practice looked horrible when houses appreciated in 2000-2007, but now it turns out to be at least as good or better in the long run. To me, a house is something I buy when I have been successful in my savings and investing. Not something I use to create wealth for me.

I have also had the good fortune of testing out each city in the BA and finding which areas and ones I like. I now know exactly where I would like to live, not just guessing like many.

Luckily my parents lost their house to the crazy interest rates of the 80's back in Canada. Unlike here, you cannot lock in a fixed rate for 30 years, or at least you couldn't back then. You get a 30 year mortgage that is refinanced every 5 years. You can easily see how people can lose their home in an increasing interest rate environment then, as my parents did.

Glad I lived through it, and was the wiser for it when I moved down here.

RentingForHalfTheCost says

I have rented for 14 years and have enough now to basically not need a mortgage if I desired

If you had the same payment as your rent every month - what would stop you from doing all that anyways?

At this point, 14 years later you either would have paid the house off (if you put the extra money in the principal) and would live rent free OR you would have all your dividend stocks AND a house that is at least 50% paid off = equity.

Yeah, I agree about the moving around and checking out areas, we did the same thing.

SubOink says

If you had the same payment as your rent every month - what would stop you from doing all that anyways?

Yes, if that was ever true around here, but for me it hasn't and continues not to be. I have always rented under the home ownership costs. The difference was basically what I invested and basically paid off a house in 14 years (100% equity). If I had tried to do it with owning I would only have about 40% of the house paid off. That is a huge difference.

If I had been lucky enough to move here in 1992 or earlier then it would have been different, but I wasn't. Take what you are given I guess.

Thanks Bgama and Tony, Phoenix is off the list, especially when there a 1000 small towns that:
Offer nice homes for less than 100k
Have their property tax under 1k/yr (have control of expenses and pensions)
Have reasonable weather

I thought I had heard "everything" when I first moved to PA and was told stories of people needing to move because of high property tax (which only go up -- a lot) in this part of the state -- big problem. Last year I was in the credit union getting a fantastic rate 2% cd and spoke to a manager to find out whether homes for sale were being priced anywhere near appraisal and the tax issue came up. She said some the loans they were making were for people needing to pay their property tax. The "savers" can never save enough in this current environment...

robertoaribas says

That being said, anyone active in this market can feel price increases in the sub 150k sector for sure. above 500k is still quite problematic, but then again, that isn't my world.

Will you consider consolidation in the future. If so, How many units do you feel will cover the extra expenses of management, maint. etc..
6 Plex, 12, 24. Kinda like comparing computer memory eh ?

Are we posting every business deal we do on Patrick.net now?! I have lots of exciting stories if we are...

m1ckey6 says

Are we posting every business deal we do on Patrick.net now?! I have lots of exciting stories if we are...

Tell us your success stories. It's good to hear somone is making a profit.

RentingForHalfTheCost says

Luckily my parents lost their house to the crazy interest rates of the 80's back in Canada. Unlike here, you cannot lock in a fixed rate for 30 years, or at least you couldn't back then. You get a 30 year mortgage that is refinanced every 5 years. You can easily see how people can lose their home in an increasing interest rate environment then, as my parents did.

Not sure if you really feel that it was 'lucky' for your parents to have lost their home. Anyway, just moved to the US from Canada and the loan interest terms are much the same. Most folks still lock in for 5 years, you can pay a higher interest rate to lock in for up to 10 but that is about the max term. Everyone is vulnerable to future interest rate hikes. Unfortunately, with the current price levels of real estate in Canada, and with prices still going up but incomes stagnant at best, the danger is obvious and worsening. If/when interest rates go up, most of Canadian mortgage holders are at severe risk of losing their homes. In addition, all of these mortgages are backed by the government itself, so Canada's entire economy and economic health is at risk when this happens.

Buster says

Anyway, just moved to the US from Canada and the loan interest terms are much the same. Most folks still lock in for 5 years, you can pay a higher interest rate to lock in for up to 10 but that is about the max term.

No.