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I'll nth the "cashflow is king" as a former reluctant landlord - I was unable to sell my underwater property without declaring bankruptcy basically and wound up renting out during the height of the recession where similar units went for another $300 / mo just before (I asked renters nearby). There's a few things you can use as deductions to help make your tax bills easier such as amortization and deducting HOA fees, but none of this makes a real difference if you're clearing only 4% on your mortgage & taxes because you'll hit an expense and wipe out whatever tax offsets you made via deductions. There are very few things that look positive going forward long term as a condo owner if you're not clearing easily from the beginning because enough other expenses will rise that your margins will all disappear. So it becomes a hilariously bad investment with all the downsides of being an active asset manager.Aquatic Giraffe posted:A bunch of warnings about litigation So this basically means that you should consider your HOA's stability / cashflow as an extension of your own property's value when buying. When HOA dues go up, it will depress your property's gains. When your HOA isn't meeting its financial obligations, it'll probably mean that it's going to raise them in mass judgements against the owners or just start fining people left and right. It's a terrible situation in the US now for owning most condos and the amount of rather unregulated power they have upon you as a property owner is well documented just from random google searches. Owning a condo for me became the worst of renting and the worst of ownership to where I've lost basically every desire to own a home again. Now, if you own a condo and can easily clear the monthly expenses with your rent, you're probably in ok shape, but you'll have the threat of not just random crap breaking in your place but the whims of your HOA.
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# ¿ Oct 14, 2013 20:58 |
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# ¿ May 5, 2024 06:13 |
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I would caution very much about hearing stories from people buying up properties and renting them for profit as if any random person with $n thousand dollars in cash could be successful - it's extremely dependent upon market for starters, like I said. On the flipside, I would also caution against reading too much into my scenario as "do never rent properties" - it's about as bad as possible aside from being sued by tenants, which is what happened to some friends of mine (it was a frivolous lawsuit trying to extract money out of my friends, which was really shady especially with the tenant's lawyer father getting involved as a scare tactic, which I've heard is considered unethical). But cautious optimism is the attitude I'd take with anything that you'd expect to make money off of (read: investments). But my god, $90k for a house that's not condemned? That's barely a 20% down payment in my mind being around nothing but expensive metro areas.
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# ¿ Oct 15, 2013 16:58 |
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I think specifically in southern California you may not get a refrigerator I think but as you go up market there will always be more provided across the world. My sister had to keep buying refrigerators when she moved around in the not-so-great parts of LA, but I don't think she'd have to do it if she was in some $10k / mo mansion.
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# ¿ Oct 19, 2013 17:25 |