Where the hell do you live where a 100k house can rent for 1k a month? Where I live 500k homes rent for 1k to 1500 a month. I live in TX btw.
Is Real Estate a much superior inflation hedge compared to gold?
- Thread starter Daal
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Where the hell do you live where a 100k house can rent for 1k a month? Where I live 500k homes rent for 1k to 1500 a month. I live in TX btw.
In my town (New England) 100k houses rent for 1k/month as well. Those paying 1k/month don't have the credit or down payment to buy a 100k house. So they end up paying a premium for being in a disadvantaged position. It's a good gig to buy up homes and rent them out. Not very scalable (buying 10 houses takes a long time and requires a lot work) and you have to put up with a lot of "interesting" problems.
Are they on welfare? A 100k mortgage is about $400 a month plus maybe $100 to $150 for taxes and insurance. So they can't qualify for a $650 a month mortgage yet they can afford 1k a month in rent? When I worked on Wall Street I had buddies living 4 to an apt because they couldn't afford 1k a month in rent. Something is off here. I'm not saying there is not a guy here or there who is in some awkward financial situation where he is cash rich but credit poor and this model fits that market but it's really hard to be both rich and poor at the same time. Hell I have friends in Chicago that bitch about 1k a month rent and they are making some decent coin. I can't imagine paying 1k a month in New England in some rural town where jobs don't pay shit. This model is not making sense. And hell no it's not scalable. LOL.
I have a friend with 27 homes, 26 paid for.
Another friend with a lot of homes doing quite well.
My parents had 12 homes.
I have 3.
It is very scalable.
TX 500K homes renting for 1500 is what is insane.
Mavs lack of understanding or imagination does not make things true.
Some people choose to live in rentals, no big unknown expenses like roofs or HVAC units going bad. Easy to move. Easy to job hop, Easy to get an education.
Another friend with a lot of homes doing quite well.
My parents had 12 homes.
I have 3.
It is very scalable.
TX 500K homes renting for 1500 is what is insane.
Mavs lack of understanding or imagination does not make things true.
Some people choose to live in rentals, no big unknown expenses like roofs or HVAC units going bad. Easy to move. Easy to job hop, Easy to get an education.
I am in TN about 30 minutes outside of nashville, I rented a townhome here in 2011 for $725 and it was 1400sq ft and brand new. I think it appraised at $130k. They were building them to sell right as the economy was tanking, so he just started renting them out instead of selling them. He could have probably gotten $850 for them pretty easily I would think.
On average though a $100k-ish home around here probably rents for $700-800
On average though a $100k-ish home around here probably rents for $700-800
Aren't property taxes quite high in TX? Seems $1000-1500 would be operating at a loss on a $500k home.
I just pulled up a home outside of Houston, listed for $480k, it says the taxes on it were $10k for 2014. No clue why but they basically doubled from the prior year. I am guessing they remodeled the house or did something.
I have been really looking into buying some rental properties. I have quite a bit of equity in my home currently, so might try to use that to pick up my first one if I can find a deal on one. It really just depends, I just need to make sure I can bankroll everything on my own without it being rented out basically...still brainstorming
I searched CL in Hourton TX, found a rental for 1300
THere is also this listing found from the same agency for sale for <100K: http://search.har.com/idx/dispSearch.cfm?mlnum=85306014&ALLMLS=N&cid=2317&sitetype=CWS&class=1
I'm aware that this is different investing than someone like Schiller was talking about
THere is also this listing found from the same agency for sale for <100K: http://search.har.com/idx/dispSearch.cfm?mlnum=85306014&ALLMLS=N&cid=2317&sitetype=CWS&class=1
I'm aware that this is different investing than someone like Schiller was talking about
You are forgetting about the 20k downpayment. Many people don't have that in savings. If you have a family of 4 and you are making 35k/year you probably don't have 20k in the bank that you can put into a house. Very different than your 20-something Wall Street friends who spent their money on booze and vacations.
The world is a lot bigger than the BSD traders on Elitetrader who are making millions while contemplating buying gold bars for their scrooge mcduck vaults. It doesn't have to be efficient when there are so many sticky variables in place.
And while 12k/year seems high, your operating income is much lower: mortgage, taxes, and maintainence cut into that. Ending profit is closer to 6k. Still cashflow positive.
The market is what it is.
Very high. They run about 2.5% to 2.8% in the burbs. Almost impossible to cashflow a home in the burbs. In the city the taxes are less.