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Was asked to join in the thread by the OP. Background on why we want to be rental property owners. Currently own a duplex with a guesthouse in the garden. Guesthouse started as a garage, which previous owners renovated into a home office with a dinky toilet and sink, which I then renovated into a tiled larger bathroom with shower, real vanity, and kitchenette (all but an oven). We were renting this on Airbnb, but a combo of getting tired of cleaning it so often, and seeing what Airbnb has done to the local market, we decided to rent it out long term for a reasonable price. We bought our house for 250,000 USD with 36% down in cash (converting from ISK since very few people will understand our tiny currency). It was recently assessed at 305,000, not a bad increase in 4 years. Renovating the guesthouse was about 4,000 USD. We made around 30,000 USD from Airbnb over 3 years. We now rent the guesthouse for 600 dollars a month, utilities included. Our original mortgage payment was 1,130 USD a month, but lacking good investment vehicles in Iceland, and because we have currency controls preventing us from buying US or EU financial investements, we aggressively paid down our mortgage, which was around 6.75% interest (best that could be had at the time). Now our monthly payments are less than 440 USD, so our guesthouse rent not only covers our mortgage payment, but then some. We have just over 50,000 USD left to pay on this house, so we needed to figure out what to invest our money in next. We talked to many friends, the investment banks here, and decided on buying a smaller rental property. Rental property plan. We wanted to find a property worth around 175,000 USD, with 2 bedrooms. Most around this price point have only one, and here in the area we want to invest in, number of bedrooms matters more than square meterage for what one can ask in rent. We found a nice looking place, owner asking 167, we offered 161, they have til Monday to accept or decline. We will be taking over their loan, and paying the remainder using a low interest loan on our first place taken from our pension fund. Our plan is to pay the minimum on the pension fund loan, and pay down aggressively on the taken over loan which is 6.3% interest. There are currently renters who wish to stay, who are paying 1,175 USD a month, which is right around the average for the area and size. We would like them to stay, rather than having to find new, unproven tenants. Next? Will update when we get an answer on the offer. We are also going to have an independent inspector come in (we can cancel the offer, penalty free, if they find something) but this is the order stuff is done here. And we will ask for payment records and background info on the current renters.
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Jul 25, 2014 14:29
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Bloody Queef posted:Is this common in Iceland? This was huge in the US in the 80s when mortgage rates shot up and banks really cracked down on this by putting due on sale clauses in their paperwork. They got burned by having non vetted buyers not making them mortgage payments. Yes it is very common here. We still have to be vetted to take over. DNova posted:I don't know all of the details of owning property in Iceland or even all of the details of your deal, but with the numbers you posted ($161,000, 6.3%, $1175, and assuming 30 years amortization), you will be barely breaking even, even before considering any taxes, fees, insurance, or any maintenance/repairs or vacancies. At the beginning, we will just be breaking even. However just like on our primary house, we intend to make extreme payments (budgeting around 5k USD a month as well are rolling in their rental payments) which will quickly bring down the mortgage below the rental income level. We are using this as a long term saving vehicle, because we lack access to other things an american might sink these extra payments into. update She made a counter offer higher than we are willing to go, so we made a counter counter offer halfway between our original, and her counter. It expires tomorrow, but feeling like she will take it. (realtor hinted she had gotten lots of offers, but all lower than our initial one) poopinmymouth fucked around with this message at 12:36 on Jul 28, 2014 |
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Jul 28, 2014 12:00
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DNova posted:Well, good luck. Do you have property tax there? What are your tax implications of non-labor income in Iceland? Do you mind posting some photos of the place you made an offer on? Most loans here can be paid off early. They rebalance the monthly payments so that it will still take you the remainder of the loan to pay it off. So for example our 1,300 dollar monthly payments on our original mortgage are now more like 400 dollars because of the extra payments we made. We do have property tax, and we have built it into our calculations, but that's more the nitty gritty which my husband knows more about. Rental income is taxed around 17% I think? I am not 100% sure. I will post some photos after it is more legally ours. Not 100% comfortable doing that now.
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Jul 28, 2014 13:22
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Dial M for MURDER posted:I've started to look at owning rental property, and in IMO you should be looking for a property that is making you money right off the bat. Betting on making large payments to bring your mortgage down and thus your payment seems risky. I don't know your market, but in general a rental property should be making money day 1, encase of vacancy, repair, etc. That's not really possible in the Icelandic market to buy a place (especially a smaller place) and be making money right off the bat. It's also not betting, as we have historically never made a minimum payment in 4 years. Our average is around 3,000 USD a month, and we have both gotten recent raises. (plus of course the rental income itself from this new property) DNova posted:It's really not the only concern in some markets. That said, I wouldn't touch a deal with numbers like poopinmymouth is looking at. But again, I don't know her market and maybe aggressive appreciation is a safe bet. I'm male.
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Jul 28, 2014 17:11
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Update time. The apartment was originally listed for 173,200 USD. We put in a bid for 162k She counters asking for 170k (Which is fine, 8k is a big difference) We counter counter with 165,5k (these numbers are much rounder in ISK) AND told the realtor, her father-in-law that this was the max we could get approved for. So what does she do? Counter counter COUNTER offer for 168k, a 2,500 USD difference. I know it's just business but drat this makes me dislike this woman. The only good thing is she is located abroad so I will never have to see her, and after this transaction she is out of the picture forever. Her offer letter, if we sign it before the 24 hours runs out, becomes legally binding for her to sell at that price and us to buy (barring the inspector finding anything). I am leaning toward no, just because she is being so petty, but it's still a reasonable deal, and we have some upcoming life changes that will make our credit worse in the eyes of the bank, so now is a pretty good time to do it.
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Jul 31, 2014 17:04
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SiGmA_X posted:You're from a non-US nation, and you think a 4 part negotiation is weird?? I guess that is a sign of the times. It use to be very common. I do it basically always when buying used things, and I'm in the US. 4 parts is fine, it's the tiny amount that I object to. If even a single month passes between our offer and her next, that basically eats up the majority of the difference, even if she can get the same amount from the next person.
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Jul 31, 2014 17:50
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Update time: Lots happened. In order to buy the apartment we needed to be approved for a loan about 1/3 the purchase price, as well as approved to take over the existing loan from the current owners. Loan 1 approval came through last week. Loan takeover approval came today, so we will be signing any day now. The current renter also called and said he would like to remain, so we already have a tenant paying above what we were estimating. Will post photos after the actual signing is totally done.
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Aug 25, 2014 16:13
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Wanted to finally post an update, as we signed the contract yesterday. The previous owner found out last minute (supposedly) that if they sold before 2 years from their purchase date, lots of extra taxes would be charged, so we waited (not much choice) The good news, is because of Iceland's crazy financial system in regard to loans, the loan we are taking over has gone down in amount because of interest rate decreases. The tenants have been in constant contact with us to ensure a smooth change over in regard to their deposit and our plans to let them keep renting and they seem like really nice steady renters (and they had recommendations as well). House inspector said the outside of the house was kind of poo poo, but the apartment itself was well maintained. Hopefully will be very boring from here on out, just getting rental payments and doing a few much needed renovations.
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Dec 19, 2014 10:46
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Small boring (but great) update. New place we bought is working out really well. The renters pay on time every month, I finished renovating the bathroom mostly myself (the renter is a painter, so I traded a portion of the rent for him to paint the room), and the balcony window which long needed replacing is finally getting done as well (we included the replacement cost in the purchase agreement). Guesthouse renter is paying on time and without problems. Officially will be paid off our primary residence next month after just 5 years, thanks in no small part to the passive income of renting out the guesthouse and this new apartment. Our monthly mortgage payment is now down to a third of our rental income each month. We roll all the rental income, plus at least 1,000 USD (but often many multiples more) into the mortgage and should hopefully follow the wash, rinse, repeat of adding another apartment in about 2 years when we are debt free again.
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Aug 21, 2015 10:17
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poopinmymouth posted:Was asked to join in the thread by the OP. Update for the new year. Primary residence: Mortgage free (took 5 years) gone up about 40% in value in that 5 years. We would not have been able to pay it off this quickly without the rental income from the guesthouse and secondary apartment. Guesthouse at primary residence: Long term renter, pays on time, pure profit Rental Apartment: Owe just under the full purchase price, used primary residence for collateral, 3.6% inflation adjusted mortgage Long term renters inherited from previous owner, pays on time, rental payments 200% mortgage payments New acquisition: undeveloped land in my home state to build a vacation home we will rent out the rest of the year. Bought in cash. Total monthly expenditures are currently completely covered by rental income, but only just so. We want to add one more property before early retirement, but that is up in the air. It's between another small apartment here to rent out, buying an apartment here we would live in and rent out our much larger primary residence, or finishing the vacation home (the third option will take much longer to complete but has a much higher ROI based on the house size and area). Currently funneling all extra money into paying down the mortgage on the rental apartment so that we will be good candidates for a loan for the next stage of our plan, whatever that may be. poopinmymouth fucked around with this message at 13:33 on Jan 3, 2016 |
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Jan 3, 2016 13:24
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Pryor on Fire posted:
I thought I'd covered it before, but to reiterate, we have currency controls here in Iceland. That means I cannot move any significant amounts of money outside of the country. The stock market here in a nation of only 320,000 people is far too volatile for someone so risk adverse as me. This leaves either putting money into a savings account (and risking another period of hyper inflation like we've had frequently) or parking it in real estate. Many local economists actually predict the reason house prices are going up so much is because so many other people have the same idea, that real estate is the safest hedge against risk. I appreciate the advice, and it's probably apt in most people's situations, but we went over all our options with some local financial planners, banker friends, friends who have also dabbled in real estate, and then crunched the numbers ourselves. This is the lowest risk route forward to saving for retirement that *we* have available here in Iceland. Additionally none of our plans rely on the net worth of our properties, they have all been researched and planned for as rental properties outside of our primary residence which we also never plan to unload. I mention property appreciation just as a fun aside, not as pertinent information to our planning. But really, having multiple payed off mortgage free properties with good tenants paying on time sounds like a great situation to me. Far more in line with what I want to risk than multiple properties with debt owed and me trying to juggle all the balances if money ever becomes tight or an emergency arises. poopinmymouth fucked around with this message at 13:57 on Jan 17, 2016 |
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Jan 17, 2016 13:53
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ShadowHawk posted:A stock is very risky, many stocks much less so. A single rental property is risky, a share of an REIT much less so. I would love to buy shares in an REIT and the moment the currency controls are lifted, that is how we plan to diversify. Icelandic stocks are so much riskier than real estate that we'd rather pay off our current mortgage in order to buy another. (which is the current plan) I really appreciate everyone's attempt to help, but the specifics of living in Iceland under currency controls and such a minuscule interior stock market makes individual real estate purchasing really our only option. At the moment at least. In bad news, we found out the rental property needs the entire outside of the house redone, and the initial contractor suggested it might even be "too late" (which I think personally is a scare tactic, but we'll see!). Icelandic houses are poured concrete with rebar, and the house has quite a lot of outside damage. We had an inspector come before buying, but he focused mainly on the interior of the apartment. The initial estimate is about 160k USD and our share would be about 20k. The house association only has about 4k in the coffers. If we finance, the monthly payments on the loan would still be covered by the rental income, so we'd be either breaking even or still pulling in a small monthly gross. Frustrating, but not really a huge deal. If anyone is interested, here is the album of images we took to provide to the various contractors to give them an idea of the level of damage: http://imgur.com/a/7w4xs (ours is the very top apartment) poopinmymouth fucked around with this message at 12:25 on Feb 11, 2016 |
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Feb 11, 2016 12:18
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TouchyMcFeely posted:So after our last attempt at purchasing rental property #2 fell through we've found a winner. Haven't used a property manager, but what happened with rental property #2 (the first one)? Can you describe the one you got? Size/cost/rental income/location/etc? anything you feel comfortable with and how you picked it, curious. Only a small update from our end. Guesthouse: Still trucking, same renter, no problems, pure income as the house the guesthouse is attached to is our primary residence and is paid off. 2nd Apartment: Same renters, no problems from them, but the whole building needed to be resurfaced, and despite us being the only owners renting (all other owners are living there, it's a 6 unit house) no one was bothering with the upkeep, plus there was an old owner blocking all actions. Total is around 160,000 USD to renovate the outside, it's a concrete building that needed cracks fixed, exposed rebar covered, and several of the balconies entirely destroyed and repoured/molded, then they will re-pebble the outside surface. Our share was only 16%, and in the long run it will be a big benefit as the house went from looking like a post apocalypse Detroit building to something nice and new should we have to find new renters or sell it in the future. Mortgage on that is 35% paid off after 2 years. We've decided to try out having a roommate here in our primary residence. We've been renting our guestroom on MrBnB, but ran the numbers and a long term renter would be twice as profitable, and we wouldn't have to clean the room 2-3x a week. To start we have a 3 month contract that either of us can call it quits afterward. I'm mainly not sure how having a permanent roommate is going to change the dynamics of the house, so we want an out should it prove to be too much. Land we bought in the USA: No progress. Excavator we found to dig the well and septic didn't work out, so we have to find someone new. The expenses resurfacing the 2nd apartment put this on the back burner, but now we want to push forward again developing that property.
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Aug 13, 2016 12:13
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I agree with the other posters. I've thought of things to do for our tenants over the years, from christmas cookies to dinner invites, and always decided against it for the exact same reasons mentioned. What *has* formed a strong and valuable relationship is, again as the other posters put, being a good landlord: timely repairs, reasonable rent, we offer a 10% December discount, etc. You'd think this would be bog standard, but it's apparently such a rarity that they treat us like we walk on water.
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Nov 18, 2017 21:50
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Thermopyle posted:I always love to hear what people are getting for rent. I get 800$ a month for 250 square foot studio (detached though, with private entrance). 101 Reykjavik ftw! Edit: that's super low too. We haven't raised rent in 4 years. Could easily get 1k or more but we long since paid off the mortgage so don't want to. Edit 2: 1,350$ for 560 square foot two bedroom And if we rented our primary residence, which is the plan soonish, 3,500+ a month for 3 bedroom 1,100 sq foot poopinmymouth fucked around with this message at 17:48 on Jul 11, 2018 |
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Jul 11, 2018 17:44
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Just curious, on this topic, once another party is doing the management, what's the moral justification for rent extraction? I know for me, the fact I'm the one who gets the call, goes physically and fixes the problem with my own labor and skill, lets me sleep just fine at night asking for fair market rent from people who's names I know and have developed a relationship with, even if it's based on a financial arrangement. If I offset that to someone else, AND I couldn't even meet the renter's once because of distance, I don't know I would feel like I was doing much to earn that rent check or that I could be sure I would think of my renter's as people.
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Sep 15, 2018 10:02
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baquerd posted:You're helping the management company employees make a living, effectively creating jobs and stimulating the local economy. To be more clear: what service is the landlord providing in this situation that the renter is paying for?
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Sep 15, 2018 11:32
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paternity suitor posted:Is Home Depot morally bankrupt for renting out tools? Is a roller skating rink morally bankrupt for renting out skates? The service is providing the thing you own for someone else to temporarily use. Hammers are neither a human right, nor is there a hammer crisis affecting every major city. Other than those foundational distinctions, good analogy!
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Nov 13, 2018 15:05
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Jealous Cow posted:I’m pretty sure Very Serious Forums Poster poopinmymouth just has a fundamental issue with the concept of rent seeking in housing. I don't have a problem with landlording but there is a spectrum from fair exchange over to exploitation, while still being technically legal. If the landlord*does* something themselves with their own labor on the property, it's more aligned with the former, and remote with property management the latter imo. "Providing capital* in a highly inequal society where tons of people can't afford to buy isn't enough to clear the morality bar imo. And when you don't see or touch the property or ever meet the renter, exploitation is more likely by virtue of the detached and insulated nature of the exchange. spf3million posted:Back when that was posted, there was a parallel discussion going in the doomsday economics thread in which he was on the other side if I recall correctly. Why not? There is a position between "all property is theft" and "if it's legal it's okay". To be even more relevant (though I think the above subject is 100% on topic) we are selling our rental property to the renter's we inherited from the previous owner. Assuming we close without issues in February (they asked for some time to get finances in order) the entire pursuit was very beneficial. But maintenance on three separate properties was too much for me to handle. Now we will have a renovated basement apartment, our current house rented out, plus guesthouse after I finish renovations on the new house we bought. Thread to follow that journey here: https://forums.somethingawful.com/showthread.php?threadid=3867076 poopinmymouth fucked around with this message at 09:51 on Nov 14, 2018 |
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Nov 14, 2018 09:21
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baquerd posted:Personally, it's just another investment, and landlording carries no more moral weight than buying an index fund. Emotions don't typically belong in business decisions and are probably the single biggest factor how people lose money by e.g. panic selling stocks. First, it's not possible to make decisions as a human being without emotions, might as well acknowledge that every choice we make is influenced by our feelings and history and position in society and socialization. Just look at the hissing at the suggestion that the externalities of one's choices should be considered elicited in this thread. Second, unlike a hedge fund or hammer or roller skate rental, landlording involves human beings who are living in the asset. I feel this important difference is worth extra respect and thought. It's important to keep in mind that there is a power differential between renter and rentee. One would hope we're all in agreement that shoving more humans than firecode allows into a rental unit is wrong, or accepting sexual favors in lieu of rent is wrong, but the line gets fuzzier when talking about rent and the exchange of rental money for maintenance and time in the space. I think it's immoral to jack rent every legal chance to the maximum, or to be so separated from the space that you can't even physically visit or meet the renters. It enables the type of exploitation we read about every day where ICE is called, sexual favors are pressured, illegal subletting, etc. Amateur landlording is a relationship between two parties, and the power differential and fact that one person is living there means it should be both regulated and introspective, lest it turn into an arrangement like the Waltons, who profit immensely off the suffering of others, having never lifted a finger themselves. The more distance and separation between you and the person working and paying rent, the easier it is to be fine with immoralities that arise (assuming you even hear about them 3 states over).
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Nov 14, 2018 13:25
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Jealous Cow posted:Do you know if any research that supports this assertion? No. I don't. But I find it illuminating that when someone suggests that renter's need to be treated like untrustworthy cheats everyone nods along as if it's a truism, but suggesting that physical distance and middle men will reduce the concern requires a dissertation. baquerd posted:You do you, but this is precisely why it's better not to be personally involved. The entire point to owning rental properties for me is to make money off of them, and if I'm personally involved in tenants' lives, it would be more difficult to do so with the increased emotional involvement. It is ideally a business relationship, nothing more and nothing less. I treat it like a business too, and we make money off our investments while remembering that human lives are involved and treating our renters as human beings rather than faceless money cows to milk.
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Nov 14, 2018 15:41
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baquerd posted:I only wish I could get one of these for renters: https://www.gea.com/en/products/milkingcluster-apollo-milksystem.jsp This idea is absurd in 2018. We can see endless examples of human suffering and exploitation when looking at just landlord/renter relationships. And that's even when the contracts are being honored, let alone all the examples of them being broken. I want my renters to respect the space and my asset, pay on time, give me notice for things like vacancy, items needing maintenance, etc, and to recommend me if appropriate when looking for new renters. In return I maintain the space, fixing things as they break in a timely manner, give them notice for appropriate things, and try to be responsible of the power differential. Part of that is making sure I can visit the space myself to see the state of the building, make sure it's still standing, and *importantly* make sure I'm aware of any local housing issues so I can vote or make changes to better the city we both live in. This has included in the past moving from short term rentals to long term after learning of the housing insecurity for locals created by too many people removing former long term units for more lucrative short term rentals. Nothing illegal but immoral and unsustainable. Imo those of us in the extremely privileged position of owning more than one residence have an obligation, even if it isn't a legal one, to ensure we are not harming our renters or our societies through our choices, just as I want those with more privilege and power than myself to do the same.
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Nov 14, 2018 16:06
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Jealous Cow posted:Do you know if any research that supports this assertion? Actually I lied, I just didn't have access to all my saved notes while at work. Here is one example of lovely landlords whom have never met their renters. Visiting the buildings and meeting their renters probably wouldn't create a conscience in this group, but the extreme distance probably helped them sleep at night while screwing them over. https://www.motherjones.com/politics/2014/04/predatory-equity-wall-street-screwed-over-renters-new-york-city/ baquerd posted:That's awesome that you're doing this sort of charity work and trying to maximize societal good, I really respect that! For me though, it's just asset diversification and and cash flow, and I don't think there's anything wrong with embracing honorable and contractual capitalism. Charity work is a really weird term for making a good profit while treating your "customers" with basic human dignity. If that's charity, can I call remote landlording misanthropy? We objectively have a problem with our current system not pricing in externalities, from climate change to racism to misogyny. It's really worrying how much objections are being thrown up to the idea of "treat your renters with basic respect, and being unable to meet them in person makes that harder to do". I'm not suggesting inviting them to thanksgiving dinner or letting them live rent free, just that you know what their faces look like while making decisions about their place of residence where they are building their lives. (and that proximity and respect will lesson the chances of exploitation, because we are social creatures and most people have functional empathy). poopinmymouth fucked around with this message at 20:51 on Nov 14, 2018 |
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Nov 14, 2018 20:49
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My current rental project: We bought a detached single unit house (an 8 year dream) and I'm renovating it. It is old and decrepit and that was the only way we could afford to buy such a property, a ready to move in of this type would be double, and we barely could afford the house as it is. It's too big for my family of 3 (plus dog, frequent visitors, and often foster kids) so we are turning the basement into a detached apartment to rent out, taking the stairs out of the interior, leaving it's exterior entrance. I'm really enjoying getting to custom build the space that will be rented. I'm making sure everything is as durable and overbuilt as possible, easy to clean, ventilation works properly, and overall just building with the knowledge gained from renovating and renting out our guesthouse on property #1, which I went a bit cheap on some materials, and didn't get to do a full rebuild, and I see the problems now just 5 years later that I'm trying to avoid with this new build. The iteration and experience is a nice aspect that I enjoy. What's crazy is that before I even signed on the property, word got out that we were planning to divide it in two and rent out the basement if we got it, and I already had a waiting list of 3+ friends who wanted to rent it out, 8+months before it could even possibly be considered ready. (the waiting list has since grown) That's how insane the Icelandic rental market is. Budget wise, we can ask a below average market rate that we feel good asking for, and it still will cover our mortgage payment for the house. (though we plan to churn through this mortgage in 5ish years like we did on our first house)
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Jan 1, 2019 12:45
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Thermopyle posted:Cool! Yeah, for sure. I meant more "acquaintances"
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Jan 2, 2019 09:12
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Is it really surprising in a time of immense housing insecurity and expense that public ire against wastrels is up? I believe there is a difference between someone who is trading labor related to housing for rent, but plenty of people in this thread are profiting of an infinitesimal amount of their actual labor and hiking rents Scrooge McDuck style at every chance. poopinmymouth fucked around with this message at 18:28 on Mar 26, 2019 |
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Mar 26, 2019 17:59
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Jealous Cow posted:
You could also keep going but set rent at a level commensurate with your labor. I rent to people too. I'm not an "all property is theft" kind of person. I just think there is a spectrum between fair exchange and exploitation, and from my experience, most small time landlords (and all institutional large ones) fall in the latter category, extracting far more in rent than they are offering in services/labor in exchange. poopinmymouth fucked around with this message at 18:56 on Mar 26, 2019 |
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Mar 26, 2019 18:52
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Thermopyle posted:why would landlords own homes and leave them empty to the point that there are "vast" numbers of them Who do you think would be first to complain if the unused housing was made available to those without homes? Maybe the group profiting off renting their housing to those without, yeah? Look, the landlord hatred is coming from somewhere. You can chalk it up to jealousy or ignorance if you want, but I think it's worth some introspection. "Am I justified in asking for this rental amount based on the work I've put into the situation, yes/no?" If the answer is yes, great! If it's no, lower rent until you you aren't exploiting anyone. I sleep fine at night asking for rent because I built my rental spaces with my own hands. I keep it low, never raise rents on a tenant, and give December discounts and would be willing to work with a tenant in financial trouble (temporarily at least). It's a power imbalance, be responsible with it. Those landlords who haven't and have treated it like easy money printing is where the landlord hate is coming from, in my opinion. poopinmymouth fucked around with this message at 19:40 on Mar 26, 2019 |
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Mar 26, 2019 19:36
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TooMuchAbstraction posted:This is your friendly reminder that to hit the top 1% in total wealth you need to have over ten million dollars. People posting in this thread typically have 0-2 rental properties (hi! I joined this thread because I was considering renting out a single room in my only home!). In most markets that wouldn't even qualify you for top 5%; in plenty it wouldn't even crack the top 10%. The top 1% rely on the next 9% to uphold the system and gaslight the bottom 90% that all is fine. https://www.theatlantic.com/amp/article/559130/
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Mar 26, 2019 21:19
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Ruzihm posted:lol as if the very instant a bill was floated that would expropriate the rental properties of the top 1% you wouldn't rally around them in bourgeois solidarity. I mean, I would because I think housing is a human right and as long as it was ubiquitous I'm game. But I realize the majority of landlords behave exactly like you say.
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Mar 26, 2019 21:28
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Thermopyle posted:I might be wrong, but my feeling is that for most people owning a couple of rental properties even puts then in the top 10% by net worth or income. Try this: http://www.globalrichlist.com/ Do it by wealth not income. You might be surprised how high up you score if you hold real estate assets and aren't up to your eyeballs in debt.
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Mar 26, 2019 21:46
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baquerd posted:Somewhat pertinent video on the cost of rent versus wages: So we currently have more houses than homeless now, why would *even more* houses somehow reverse the trend of only allocating housing by income again? Is this like libertarianism where it only starts to work when you get it exactly perfect and 100% but up until then the opposite effect occurs? Isn't there a word for that... wishful thinking? denial? No true scotsman?
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Mar 26, 2019 22:04
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Ruzihm posted:fyi u were replying to a post asking how you can reduce the number of homeless people without inconvencing landlords. wasn't it still an illuminating answer how he just discarded homeless as inconsequential? https://www.ohchr.org/EN/NewsEvents/Pages/DisplayNews.aspx?NewsID=22533&LangID=E
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Mar 26, 2019 22:28
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Long time thread participant here. Fourthing sending it to C-SPAM. If we can't defend our life choices without crying for the mods, the discomfort is pointing to some unexamined ideas that need some introspection.
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Mar 27, 2019 13:26
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baquerd posted:Ah, interesting. Been keeping my eye on some larger places, and it seems around the 30+ units range I'd be able to consider hiring a single full-time employee directly for less, but I haven't actually looked into those sort of salaries and a part-time person who's mostly a receptionist and scheduler of maintenance and could work from home might be pretty cheap if I wanted to take a more active role. I do actually manage to profitably do full-service PM at 10% rents plus placement commissions and fairly small renewal fees. Do you give any long term investment strategic thought to the idea that society might find a way to stop individuals from "owning" 30+ units they didn't build, with an employee who does the managerial work, and your justification for taking the considerable profits from this arrangement is no longer tenable? I know I try not just to consider market direction and how it might affect my actions, but also how a changing climate might affect them in 10, 20, 50 years out, but also political changes and how they could impact me. I know I personally believe that we as a society will stop this kind of arrangement somehow, since an element of it is required to address climate change in any way (and if society doesn't, we'll all be dead), and try to ensure my actions don't paint a target on my back via antisocial behaviour with investments and building projects. Like why not get to the 30+ units and then actually make the full time job of managing them *your* job? And leverage this extra time to learn ever increasing repair skills so you can save money on hiring others and have the hands on experience of maintaining your properties? And then managing and repairing them in such a way that you are pleased and your tenets are pleased. poopinmymouth fucked around with this message at 11:25 on Mar 30, 2019 |
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Mar 30, 2019 11:22
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Azza Bamboo posted:So owning 30+ units and taking the profit is fine if you do some of the work on the ground level? Well no, it was more a thought experiment, and challenge. I personally think that if the landlord is doing the management themselves with face to face time with their tenets, as well as building up their maintenance skills and does that themselves, that a sustainable end result will be pursued more often than currently out of the various inputs. More than likely the person would reach a sustainable income/labor level around 3-5 units to pay for their life's necessities, and the service they provide as a knowledgeable tradesman and social skills from working with their renters will end up in a much more balanced ratio than a person remote managing 30+ units with paid employees doing the work while they live off the largess. I think the latter both attracts and encourages sociopathy, and the former would attract and encourage philanthropy. Maybe naive, but I think it's possible to be a socialist and have the day job be based around housing maintenance, for people who don't want or can't do that labor themselves. Wiggly Wayne DDS posted:you're overlooking the risk that you don't actually know how to maintain multiple properties over the long-term and are being convinced of your capabilities by the lack of short-term failures Well, myself, the answer is yes, I'm replacing all of those things, windows, heating, insulation, siding, plumbing, tiles, cabinetry, etc. I started slow and built up my skills. It's tangential but I also don't think people should jump into things over their head business wise, start small and build as skills and experience grow. Even if you can't do these things yourself, if you're taking over the management of an asset that contains these things, one should be at least familiar for maintenance purposes. I think ultimately we should be moving toward a collective ownership of housing doling it out based on personal need, but while we're still working under private property, there are ways to move the needle toward better or worse outcomes. For example I think rent control is too little for a sustainable society, but I will still support moves to implement rent control in the interim as I think it's better than leaving rental rates up to the whims of landlord. We set our current rents after finishing making the space livable based on the time and resources it took, as well as what market rates and average incomes of our target demographic were, and haven't raised rent yet in 5 years on any property of ours, but if between tenets we had to do a lot of renovations or something changed in the calculation, it might require a higher rent on the next. Testicular Torque Wrench posted:
I visited London a year ago and was trying to find an indoor playplace, and as I'm not a local, the site of the burned out Grenfell tower really shocked me as we emerged from the nearby station. It was incredibly sobering, and following both the reasons such shoddy materials were used, maintenance delayed, and non justice after the fact is infuriating.
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Mar 30, 2019 14:40
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Speleothing posted:Removing long-term rental units from the market in favor of high-profit hotelling is actually worse, for the community, than 'just' being a rent-seeker. The fact that you're considering it proves that you have no interest in ethics. To double down on this idea, we were originally renting our detached garage turned studio apartment on Airbnb, but then it became apparent that this practice of putting all smaller places on Airbnb was decimating the housing security for small apartment demographic locals (students, new single arrivals, young adults, etc). Despite being more lucrative in the short term, we don't want to live in a Dickensonion hellscape, so decided to stop renting short term and only long term until the housing availability landscape changes. I did like meeting new guests from all over, hearing their stories and sharing my local knowledge, but not at the expense of the health of my city and nation. In addition to checking the short term elements like if you will have the time or desire to clean 3-4x a week, licenses you might need, etc, be sure to check if your city is experiencing a housing shortage caused by Airbnb. If it is, I think it's immoral to proceed anyway, even if it's currently legal, and have supported the measures in my city to curtail putting so much housing on the platform.
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Mar 31, 2019 09:23
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baquerd posted:Those who are even moderately wealthy on a scale where it makes sense on an international scale to gently caress with their assets have already diversified outside of their physical country and also into a variety of shell companies. You'll have to take down the world to get at the truly wealthy, let alone some people with mere tens of millions if that. Literally all of this could be said about drug cartels but it doesn't stop the US from going after them, and successfully bringing some of their leaders to jail. If the US military can find Osama bin Laden, they can find Jeff bezos in his Cayman hidey hole.
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Mar 31, 2019 09:31
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Update: Our smaller investment property is now fully unloaded. We tried to sell to the renters who were living there, offering them 5 months to save up a deposit, lower than what we eventually sold for price which they agreed to, but were then unable to get financing for. We extended them a debt note which would have made it possible, but would require a payment to the bank + us each month, and our being able to force a sale in the event of non payment, but while half the couple was game, the other wasn't. They already have new housing and we've parted ways amicably with a glowing recommendation note given for their future use. Sold within 5 days, first showing. We set the price low because we wanted to sell asap. Profit was made, would do again. Our debt levels are back to a comfortable level, paying about 10% of monthly income to service the minimum, but paying about 50% on debt and another 20-30% goes each month to renovations on the new place. We've decided to move from house one, to house two as soon as the basement apartment is livable, which I'm still rushing to finish. A good friend of ours will take over house one, renting at half the market rate as we know she will take immaculate care of it, and benefits her specific financial situation. Probably will either be neutral or barely profitable enough to calculate, but add in our guesthouse renter on the same location, still paying same rent for 5 years running, and it's a nice supplement to our day job income.
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Apr 2, 2019 00:59
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Tollymain posted:not specifically directed at you poopinmymouth Same, took me a minute, but lol
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Apr 2, 2019 13:39
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