Lamentations on the rental housing stock
2007 May 20, 6:49pm 19,326 views 188 comments
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sfbubblebuyer
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2007 May 22, 11:27am
Actually, having moved out about 5 years ago, and then moved back, I'm pay LESS rent for a better place now than when I left. So, yah, it's possible you have no rent change for 5 years. Or even a decrease. I was just pointing out that she was constructing an obvious strawman argument.
BTW, what do you think that $850,000 property will be worth in 3 years? Well over $3.5 million, that’s for sure.
If go with an annual 2% real price increase and 3% inflation, I get 3.6M which I think is generous since I think the $850,000 properties are about $200,00 overpriced. If I give it the 200,000 hair cut now and then apply 5% I get 2.8M.
You may scoff at 2% real but there was a study done about Amsterdam and over 400 years real appreciation was 0.4% annually.
I also can do better by margining my equities. Personally I don't like the risk of margin loans but then again I don't like the risk of huge mortgage on overpriced property either. I would say that unmargined equities are less risk over 30 years than one house since I would be completely diversified in equities. Any house I buy could be destroyed by an earthquake. I could buy earthquake insurance but it's expensive and would tilt calculation further in terms of equities. There are no end catastrophes that can befall one concentrated investment. Even an event like the Enron meltdown is non-issue in a fully diversified equity portfolio.
You may still prefer real estate. I really don't care. What annoys me are people who claim real estate has some magically high risk return ratio that can not be matched by other investments. Such a claim is completely false and misleading. My buyers are on the road to foreclosure because they bought into such non-sense.
Randy H
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2007 May 22, 12:53pm
DAQU
When are we gonna get to see those pix of yourself you promised a couple threads ago? Quit teasing us. At least point us to your realtor mugshot (but most here are expecting something that shows leg).
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One of the reasons that Realtors and other housing bulls frequently cite as a "positive" for buying is that you'll end up living in a better place.
Now, let's ignore for a minute the fact that it would cost you $585,000 to buy a 560 sqft [sic] house that rents for $1850 a month. And that doesn't include the pit bulls and ADT monitoring you'll need.
The fact is that the rental stock is pretty not-so-great around here. I spent most of this weekend looking at apartments to rent in Redwood City, and nothing I saw was particularly a fantastic bang for the buck. In fact, most of the things I saw made me wonder if I would hear a bang go off and into my gut for a buck.
Even the most expensive place in 94063 (Franklin Street Apartments) has a problem with crime apparently. In fact, the reviews of most places in Redwood City simply leave me shaking my head.
What gives? All I want is an apartment that's a min of 750 sqft, 1-2br, with a covered parking spot, that's somewhat close to both 92 and 85, and where I won't be a victim of crime. I'm even close to giving up my quest to find a place that has washer/dryer in unit.
Am I really asking for too much? Too demanding?
Do I really need to buy a place to meet this criteria?
#housing