Housing and Rent

clearinghouse · Jul 23, 2011

I noticed this article:

http://online.wsj.com/article/SB10001424053111904233404576458300001332210.html

... And my leasing agent said rents across my city are up 6-8% from last year, partly because of taxes, with the highest occupancy rate in years.

Does this mean REITs and other rental-based businesses will necessarily post better returns over the next few years? More specifically, ETFs like ICF. ICF just hit a new high. Would like to hear opinions of those who are longer term investors and are familiar with this space.

Clubber Lang · Jul 23, 2011

Spoke with a realtor friend yesterday. She was advising me on some raw land that I was going to buy. Exact words, "why buy the land? Rentals are going in 3-4 days right now all over the area. Buy some houses in good shape and rent them out."

I don't want the hassle of being a landlord, but the numbers she was quoting me really made me think about it.

Froglet · Jul 23, 2011

Do you folks know where I might be able to find statistics w/ sales and etc?

What do you guys look at? Schill home index?

oldtime · Jul 23, 2011

I don't trade stocks, this is just a tip I got from the guy who told me cold fusion was going to be the next big thing.

AEC trades on NYSE

gtor514 · Jul 23, 2011

Quote from Clubber Lang:

Spoke with a realtor friend yesterday. She was advising me on some raw land that I was going to buy. Exact words, "why buy the land? Rentals are going in 3-4 days right now all over the area. Buy some houses in good shape and rent them out."

I don't want the hassle of being a landlord, but the numbers she was quoting me really made me think about it.

I wouldn't trust a realtor to tell me what day of the week it is. These are the same bastards telling people to buy homes in 2007-2008 at hyper-inflated prices. They make money selling you something whether it's a good idea or not.

To the OP, I'd say wait. I think there's too much risk to the U.S. economy of deflation. In which case cash will be king and housing prices either as a rental or anything else will fall. I have no reason to think home prices are stabilizing.

peilthetraveler · Jul 23, 2011

Quote from gtor514:

I wouldn't trust a realtor to tell me what day of the week it is. These are the same bastards telling people to buy homes in 2007-2008 at hyper-inflated prices. They make money selling you something whether it's a good idea or not.

To the OP, I'd say wait. I think there's too much risk to the U.S. economy of deflation. In which case cash will be king and housing prices either as a rental or anything else will fall. I have no reason to think home prices are stabilizing.

Yeah, I had them telling me to buy another house in 2005 (right after I sold mine for double what I paid in 2001) I said "no way...I'm renting" They looked at me like I was an idiot. I ended up renting a small house from this realtor for $850 per month. He paid $195k for it. Today its worth $77k.

Although that realtor seems like he might actually be looking out for the OPs best interest because the realtor gets a higher commission on land than the house, so if both are priced the same, the realtor would actually get more money if he sold the land than the house.

WS_MJH · Jul 23, 2011

Quote from gtor514:

I wouldn't trust a realtor to tell me what day of the week it is. These are the same bastards telling people to buy homes in 2007-2008 at hyper-inflated prices. They make money selling you something whether it's a good idea or not.

To the OP, I'd say wait. I think there's too much risk to the U.S. economy of deflation. In which case cash will be king and housing prices either as a rental or anything else will fall. I have no reason to think home prices are stabilizing.

Great post. Always look at someone's economic self-interest. Realtors are worthless unless you're paying them cash to represent your interests. I also agree that housing is way too iffy to buy right now. We're on the edge of another slowdown and unemployment will remain chronic through at least next year, with the foreclosure crisis having no end in sight. It's really too bad for those with homes, but the only way things get better is if prices fall to where the inflationary adjusted average is at.

oldtime · Jul 23, 2011

Don't you young kids ever get married and have kids anymore? Whatever happened to the days when you bought a house because it was good for the family, not because it was an investment?

When I bought my house I did the calculations 8 ways to Sunday and figured if prices stayed the same I would come out even or maybe a little better renting. If prices went up, buying was better.

Now I live all alone in a big house I have no use for and can't sell at any price.

I had to refinance it when my wife decided I wasn't good enough and another man was, to pay her off.

I aint lying to ya, I'd be better off just walking away and starting over in a nice little apartment.