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[quote=mathjak107;66625892...
buying an apartment like we are in today would have us taking a minimum of a 18k cash flow cut compared to renting .
buying a 2 bedroom 2 bath apartment like we rent would run 450k plus 1700-1900 a month in maintenance .
that 450k tied up in the apartment would give up a min of 22k a year in income....[/QUOTE] Your situation is right for you and unique to most people in the US. What you did can't work for most folks because they aren't starting with 450k to invest. They have to pay a mortgage or a rent. If they aren't planning on moving, it may as well be mortgage so they eventually have an asset and a residence. That's what you did. You made money by selling a house a house and the re-invested the profit you made. If you had always rented, you wouldn't have had the 450k to invest.
Also, how in the heck do you figure 1700-1900/mo in maintenence? If that's maintenence, then your rent must be sky high because landlords just wrap expenses into rent. Also, if you did a low DP and had a comparable monthly payment, you'd eventually end up with another asset that was owned. Wouldn't that still be superior to renting? If you have a market with rent control in place, this may again be an exception. There is no rent control measures in SC.
Your situation is right for you and unique to most people in the US. What you did can't work for most folks because they aren't starting with 450k to invest. They have to pay a mortgage or a rent. If they aren't planning on moving, it may as well be mortgage so they eventually have an asset and a residence. That's what you did. You made money by selling a house a house and the re-invested the profit you made. If you had always rented, you wouldn't have had the 450k to invest.
Also, how in the heck do you figure 1700-1900/mo in maintenence? If that's maintenence, then your rent must be sky high because landlords just wrap expenses into rent. Also, if you did a low DP and had a comparable monthly payment, you'd eventually end up with another asset that was owned. Wouldn't that still be superior to renting?
Your situation is right for you and unique to most people in the US. What you did can't work for most folks because they aren't starting with 450k to invest. They have to pay a mortgage or a rent. If they aren't planning on moving, it may as well be mortgage so they eventually have an asset and a residence. That's what you did. You made money by selling a house a house and the re-invested the profit you made. If you had always rented, you wouldn't have had the 450k to invest.
Also, how in the heck do you figure 1700-1900/mo in maintenence? If that's maintenence, then your rent must be sky high because landlords just wrap expenses into rent. Also, if you did a low DP and had a comparable monthly payment, you'd eventually end up with another asset that was owned. Wouldn't that still be superior to renting? If you have a market with rent control in place, this may again be an exception. There is no rent control measures in SC.
maintenance includes real estate taxes , heat , water , sewar , all repairs , central air , and amenities, 24/7 security, parking spot and any mortgage on your apartment the building is holding . coops include everything in one fee.
we have a lot of that included in our rent already as we have a pool and tennis courts in our development ..
it would cost us 18k more a year in cash flow to buy simply because we get a minimum of 22k on the money we would spend to buy .
so it makes little sense for us at this stage ..we rather have the cash flow then 450k tied up in equity doing nothing for us.
plus it’s one less thing the kids will have to deal with when we are gone
Last edited by mathjak107; 04-10-2024 at 09:11 AM..
I don't know the landlord(s), so I can't speak for what their intentions are. But historically, people invest to hopefully make a profit. The point is if there is rent being paid, the intention is to make a profit. Or at least break even so the renter is paying for the square footage being used. I won't rent my property to someone for less than my mortgage and potential repairs, at bare minimum. Otherwise, there would be no point.
Apartments rent for below cost all the time.
Landlords will rent for what they can get. There's no upside to vacant units for significant time. If they paid a lot to acquire, build, or renovate the building, costs can be high, and sometimes too high.
In a down market, costs including the loan might suggest an $1,800 including profit. But if vacancies are 8% and the market is down, some buildings will offer $1,600 for similar units and others will follow. Those who don't will see vacancies grow far beyond the 8%.
They don't like negative cash flow, but they can handle a little. Mostly they're holding on until rents rise again.
i have never had much interest in being a traditional landlord .
by that i mean buying a rental , collecting rent and waiting years for appreciation.
i like higher profit special situation stuff . where rents may be close to break even but profits are baked in day one .
our thing was buying coop apartments which converted from rentals and the tenants who didn’t buy stayed on as stabilized tenants …
these apartments are in prestigious buildings worth seven figures each but can be had as packages of apartments for cents on the dollar because the tenants are stabilized .
over the years we offered any tenant 100k to move out so we could sell at market .
we sold all apartments off over a decade for amazing gains .
7 out of 9 apartments we had took the 100k offer , last two were sold to an investor group for a huge discount. now they will sit with them
i also like dealing with commercial lease rights in manhattan .
big dollars there too .
now retired with zero real estate
Last edited by mathjak107; 04-10-2024 at 03:22 PM..
Reading the local article how the average family needs to make $100 Thousand a year to purchase a home in our area.
Those articles are written by journalists rather than economists. Economists understand that the average family and average home are not things that should be compared.
The only thing that matters is the marginal buyer and marginal seller.
Quote:
Originally Posted by RunD1987
Anyone enjoy renting? Starting to like not having to own a property have the ability to move around more in the same area to different properties till finding the right one.
Thoughts???
One thing to consider is when you are renting, you are living inside someone's business.
The USA has about 340 million people, give or take; about 260 million of those are adults, and about 251 million of those do NOT live in NYC.
Of the 251 million adults who do not live in NYC, about a dozen care about the unique characteristics and rules of the NYC rent stabilized market. The rest of us cannot relate and do not care.
The USA has about 340 million people, give or take; about 260 million of those are adults, and about 251 million of those do NOT live in NYC.
Of the 251 million adults who do not live in NYC, about a dozen care about the unique characteristics and rules of the NYC rent stabilized market. The rest of us cannot relate and do not care.
exactly.. new york has very unique rules , laws and opportunities.
new york is also bigger then the entire states of mississippi and alabama added up , which also means that blanket statements about certain things don’t apply either , like renters are losers , or get nothing to show .
so i will always attack blanket one size fits all statements because just the fact it does not hold true for so many makes them wrong
Sorry. You are not going to pay off a rental and own it in 5 years and when you rent to own, only a small portion of the rent goes towards the purchase price. Most of the rent goes for rent.
By far, the majority of people who do a rent-to-own, can not carry through and they lose the house within a couple of years, all their down payment money gone.
Anyone who wants to try rent-to-own had best be very clear what the terms are and what the money is doing and how much of what they pay is going towards paying off the house.
rent to own can be a pretty crappy way to try to buy .
those who can really afford to buy BUY . those who can’t , rent
it’s those who are marginal that look for ways to dabble .
anytime you have a hybrid created to meet a situation it is likely to be the worst way to go about it .
i don’t care if it’s life insurance acting as an investment or an annuity acting as an investment, a hybrid tends not to do anything well .
the same is true for rent to buy.
the only time that works out is when it’s an unexpected situation.
like our original tenants in the 200 central park south building who didn’t buy when the building converted to coop ,stayed tenants with guaranteed renewals.
so decades later we offered the last two of them their coop apartments for half their value …that would have been an amazing rent to buy deal netting them 600k in a day profit if they did it
they didn’t take advantage for whatever reason
So most renters are renters because they lack the resources to buy or invest elsewhere
Last edited by mathjak107; 04-11-2024 at 04:41 AM..
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