patrick.net

Rubicon says

I have nothing against stocks and invest in them myself but I don’t get how you can compare the two as if they were interchangeable. You have to live somewhere. I would never rent and invest in stocks because I think that’s a better investment.

I agree. If rents and mortgages are roughly the same, why rent if you have the down payment?

Rubicon says

I bought a brand new house and my PITI is lower than someone renting a 3B room
House. Imagine how the picture looks like in a decade from now. Rents keep going up while my PITI remains the same.

You'll have repairs and all kinds of other shit, utilities increasing etc. Generally you have more leverage in RE if you are a risk taker, and more safety as you mentioned if you just want to live in your primary home and pay off the mortgage. However that assumes you have stable income, if you can't pay your mortgage, downsizing a rental is easier than your home, and incurs no losses. It's different than stock trading for sure, hard to compare.

mell says

It's different than stock trading for sure, hard to compare.

Its interesting as housing over the last 20 years particularly has been viewed as an investment asset. I wonder if this, combined with zoning policies is what has caused housing to become unaffordable as compared to the 1940's to 1990's.

For me, my home is just a roof over my family's head and a monthly payment of PITI, HOA fee, and maintenance & repair (M & R).

Who on Patrick.net views housing / residential real estate as their only income and retirement savings ? Who views housing equally as stocks as being an asset ?

Eman seems like he is only in housing / residential real estate and knows how to work with banks to maximize leverage.

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ad says

Its interesting as housing over the last 20 years particularly has been viewed as an investment asset. I wonder if this, combined with zoning policies is what has caused housing to become unaffordable

Don't forget the AirBnB effect.

GNL says

Don't forget the AirBnB effect.

Yes, where there is a lot of tourism like Colorado mountains towns, beach towns in the Florida panhandle, etc.

And it has not done anything as far as lower the nightly rates for hotels.

I remember the claim that more AirBnB homes means that people will be able to afford a vacation since the increase in vacation rentals or units will drive down the cost to vacation.

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GNL says

Don't forget the AirBnB effect.

zzyzzx says

GNL says

Don't forget the AirBnB effect.

I'm not buying this one. Sure, it may be true in places like Sedona or South Lake Tahoe, but your average Elko, NV or Boomfuck, AZ? No way, Jose.

Look what just hit my inbox. Looks like CalFHA down payment assistance program was a hit. More money is coming to help buyers with the down payment.

“The average number of occupants in each home fell, while the average size of a new single-family home ballooned - from just 909 square feet in 1949 to 2,480 square feet in 2021. In 1950, 15.7% of U.S. homes were overcrowded; by 2000 that number had fallen to 5.7%.” - Interesting statistics

https://www.ahs.com/home-matters/real-estate/the-2022-american-home-size-index/#

Eman says

“The average number of occupants in each home fell, while the average size of a new single-family home ballooned - from just 909 square feet in 1949 to 2,480 square feet in 2021. In 1950, 15.7% of U.S. homes were overcrowded; by 2000 that number had fallen to 5.7%.” - Interesting statistics

Look at the housing starts and the typical as well as minimum size per square foot. Seems like I've not seen a detached home or a townhome less than 1500 square feet.

If not the developers deciding this, then the local government (i.e., zoning) is the reason for this.

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ad says

Look at the housing starts and the typical as well as minimum size per square foot. Seems like I've not seen a detached home or a townhome less than 1500 square feet.

If not the developers deciding this, then the local government (i.e., zoning) is the reason for this.

There are many places where you cannot build a home, per regulations, smaller than X. I believe it's to keep home prices, and therefore property taxes, high.

GNL says

There are many places where you cannot build a home, per regulations, smaller than X. I believe it's to keep home prices, and therefore property taxes, high.

Yep, which economically forces people to live in rental apartments or if they buy, force them into townhomes or condos.

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1337irr says

Leverage helps.

Leverage works both ways.

If you put 5% down and the market goes down 5%, you just lost 100% of your deposit.

Actually, considering the 6% commission, with 5% down you're underwater from the start.

Patrick says

1337irr says

Leverage helps.

The premise is the landlord investor will never lose out as far as applying leverage.

They'll never get foreclosed on and they'll earn an ROI that rivals what they would earn investing in the stock market.

That is there is very little chance to fail as a residential landlord.

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ad says

That is there is very little chance to fail as a residential landlord.

It depends on whether the rent covers the cost of owning. If someone pays more than the rent can cover, they are likely to fail.

https://twitter.com/alanfryermedia/status/1694553345401430187



Canada, but still.

Patrick says

ad says

That is there is very little chance to fail as a residential landlord.

It depends on whether the rent covers the cost of owning. If someone pays more than the rent can cover, they are likely to fail.

Wasn't there a commenter here that bragged about buying cash flow negative properties?

Patrick says

It depends on whether the rent covers the cost of owning. If someone pays more than the rent can cover, they are likely to fail.

The impression I get from Eman is that the risk of this is very small. And I see the same in the Florida panhandle.

That is residential rental property is a very safe investment especially given the trends with rental rate increases each year.

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WE JUST NEED TO BUILD MORE HOUSES! WHY CAN'T YOU UNDERSTAND THAT!? WHAT'S WRONG WITH YOU :PEOPLE!!!

https://www.zerohedge.com/personal-finance/problem-isnt-housing-shortage-its-concentration-ownership-wealthy

NuttBoxer says

WE JUST NEED TO BUILD MORE HOUSES! WHY CAN'T YOU UNDERSTAND THAT!? WHAT'S WRONG WITH YOU :PEOPLE!!!

https://www.zerohedge.com/personal-finance/problem-isnt-housing-shortage-its-concentration-ownership-wealthy

Yeah, I just look at the Florida panhandle such as all the homes (i.e., condos, townhomes, detached homes, etc.) on or near the beach, and at least 90% are not homestead exemption (based on review of the county appraiser websites).

That means they are not the primary residence as they cannot claim homestead exemption to pay lower property tax.

I wonder nationwide what percentage of homes are not occupied by a full time renter or their owner (i.e., vacation/short term rentals, a second home get away, etc.) ?

Wolfman at Wolf Street website has been making references to this topic of home ownership, new housing starts, etc.

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NuttBoxer says

WE JUST NEED TO BUILD MORE HOUSES! WHY CAN'T YOU UNDERSTAND THAT!? WHAT'S WRONG WITH YOU :PEOPLE!!!

https://www.zerohedge.com/personal-finance/problem-isnt-housing-shortage-its-concentration-ownership-wealthy

The problem with California is a few folds:

1) NIMBYism - which drives the cost up astronomical as developers have to pay all kinds of fees to do studies and impacts

2) the city permit fees in the six figures if you want to build a SFH

Once you factor in 1 and 2, it’s already $200k before the cost of land, labor and materials

And I haven’t talked about the city made us installed a new sprinkler system when we remodeled the house. That’s $25k right there, not including Fire Marshall inspection fee, etc…

They made us installed new sidewalk when it was never there in the first place. That’s another $20k. It’s ridiculous

Eman says

Once you factor in 1 and 2, it’s already $200k before the cost of land, labor and materials

Where do the working class live there ? Where do those who work the restaurants, the landscaping jobs, etc. live ?

They live 6 people in a 2 bedroom apartment ? They can't reasonably live more than 90 minutes travel distance away from their jobs.

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Eman says

Look what just hit my inbox. Looks like CalFHA down payment assistance program was a hit. More money is coming to help buyers with the down payment.

Also yesterday I tuned into NPR (after a long time) and caught some cunt speaking about plans to basically subsidize ALL renters in AlCo with state money. What that would do to housing prices is obvious.

Under what economic conditions do you think allows communism to raise its ugly head? Think about that.

“If you want a car and house and health insurance for everyone you need to find a communist country that provides that.”

@Rubicon,

Please share which communist country provides these?

GNL says

Under what economic conditions do you think allows communism to raise its ugly head? Think about that.

Communism is only possible through violent insurrection or foreign occupation. It has never been introduced in any other way.

Russia, China, Cuba, Nicaragua, Albania, Vietnam, Yugoslavia - insurrection.

Latvia, Lithuania, Estonia, Belarus, Ukraine, multiple stans in Central Asia, Georgia, Armenia, Azeri, North Korea, Poland, Hungary, Czechoslovakia, East Germany - occupation.

I don't know any instance where Commies were voted into power in a free election.

Eric Holder says

Eman says

Look what just hit my inbox. Looks like CalFHA down payment assistance program was a hit. More money is coming to help buyers with the down payment.

Also yesterday I tuned into NPR (after a long time) and caught some cunt speaking about plans to basically subsidize ALL renters in AlCo with state money. What that would do to housing prices is obvious.

In general, the intention is good, but they haven’t figured out the consequences of their intention.

Eman says

Eric Holder says

Eman says

Look what just hit my inbox. Looks like CalFHA down payment assistance program was a hit. More money is coming to help buyers with the down payment.

Also yesterday I tuned into NPR (after a long time) and caught some cunt speaking about plans to basically subsidize ALL renters in AlCo with state money. What that would do to housing prices is obvious.

In general, the intention is good, but they haven’t figured out the consequences of their intention.

The road to hell is paved with good intentions.

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https://www.cnn.com/2023/08/24/homes/mortgage-rates-august-24/index.html

CNN reports today 30 year mortgage rate is at 7.2% and at a 22 year high.

But last week CNN reported that housing starts have increased more than expected: https://www.cnn.com/2023/08/16/homes/new-home-building-july/index.html

I suspect home builders are expecting the 30 year mortgage rate to drop between now and spring 2024.

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Eman says

Also yesterday I tuned into NPR (after a long time) and caught some cunt speaking about plans to basically subsidize ALL renters in AlCo with state money. What that would do to housing prices is obvious.

In general, the intention is good, but they haven’t figured out the consequences of their intention.

Its a supply matter, and the problem is the existing homeowners wealth is tied primarily to their homes, or their home values are a major significant priority to them.

Hence, its politically impossible to bring new supply to areas that are in desperate need of new housing. And California especially makes it extremely expensive with its zoning rules and building code.

I don't understand the need for sprinklers.

Just put in a Simplisafe or ADT security system with a smoke and CO detector, as well as put in +2 hour rated firewalls between units like a townhome complex.

And require use of metal roofs versus asphalt shingle tile roofs, and require hardy board (or concrete board) for siding.

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Rubicon says

“ I don't know any instance where Commies were voted into power in a free election.”

Half of the US population wants more government and more regulation and higher taxes. Even on a conservative website like Patnet people want to get rid of prop 13 so that commifornia can charge higher property taxes.

And yet, no real
Commie rule in CA.

RWSGFY says

I don't know any instance where Commies were voted into power in a free election.

How will communism overcome America? It looks as though it is happening albiet very slowly.

Eman says

Eric Holder says

Eman says

Look what just hit my inbox. Looks like CalFHA down payment assistance program was a hit. More money is coming to help buyers with the down payment.

Also yesterday I tuned into NPR (after a long time) and caught some cunt speaking about plans to basically subsidize ALL renters in AlCo with state money. What that would do to housing prices is obvious.

In general, the intention is good, but they haven’t figured out the consequences of their intention.

Do you think they care? It is my belief that when income/wealth inequality gets bad enough, big changes can happen. Good or bad? You decide.

GNL says

RWSGFY says

I don't know any instance where Commies were voted into power in a free election.

How will communism overcome America? It looks as though it is happening albiet very slowly.

We'll discuss it when it does. IF it does.

Eman says

I’m not a buyer at the moment b/c the numbers don’t pencil out. The risk/reward is not there. I’m always a buyer and seller for the right price.

How much does the price have to decrease for you to buy ? Just think generally based on average and median prices now.

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RWSGFY says

We'll discuss it when it does. IF it does.

If it does, will any discussion against communism and the government will be protected by the U.S. Constitution or equally and protected civil liberties ?

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Patrick says

ad says

That is there is very little chance to fail as a residential landlord.

It depends on whether the rent covers the cost of owning. If someone pays more than the rent can cover, they are likely to fail.

Actually, when I took over some VA loans and then rented out the houses, I had a negative cash flow. I considered it buying a 3 bed, 2.5 bath, 2 car house for $75 per month. Eventually rents caught up with the payments anyway.

ad says

RWSGFY says

We'll discuss it when it does. IF it does.

If it does, will any discussion against communism and the government will be protected by the U.S. Constitution or equally and protected civil liberties ?

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LOLwhat? We'll discuss it w/o such protections.

ad says

Eman says

Once you factor in 1 and 2, it’s already $200k before the cost of land, labor and materials

Where do the working class live there ? Where do those who work the restaurants, the landscaping jobs, etc. live ?

They live 6 people in a 2 bedroom apartment ? They can't reasonably live more than 90 minutes travel distance away from their jobs.

.

Well, they should work in restaurants in Tennessee or mowing lawns in Idaho, sell hot coffee in Arizona. Here in CA we employ for that works Indian engineers.