Author Topic: Declining Rents  (Read 4530 times)

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Offline zubs

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Re: Declining Rents
« Reply #60 on: September 23, 2022, 12:49:55 PM »
Property collection is how us retards make generational wealth.
Stock picking is a lot harder.

I've not ever sold a house, strip mall or warehouse and it's worked out pretty gud.



Leasing multiple properties sure is easier than running a company and dealing with employees and all the bullshit that happens.

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Offline CalBears96

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Re: Declining Rents
« Reply #61 on: September 23, 2022, 01:12:01 PM »
Yeah, a whopping 0.13% decrease after 12.3% increase. Scary!!! Really bad news!!! Housing price will fall by 0.13%. Run for the hills.

A -1.6% annualized decline with inflation running at 10%.  Landlords are getting squeezed by higher costs and lower rents, and this is just the first of what will be many months of bad news. 

Your new neighbors were smart to rent because their costs are fixed, if not declining, while yours are steadily increasing.

Ask LL, he rents in Irvine.

Yep, rent free though.  ;)

The declining in a 20 % YOY increase, WTF is LL smokin'?

The posters here are literally losing their minds.

I hope they didn't rent in the past 6-9 months because rents are up over 25% in Irvine in the past year and if they rented a home earlier those tenants can expect a rent hike upon lease expiration.  I bought 2 rentals in 2021 with a client and our fixed rate is 2.99% so how are our costs going up?

It's strange that I would have to explain this to a CPA, but ok, here goes:

Depreciation + Taxes + HOA + Maintenance + Repairs + Management + Rent Collection costs are all going up.  Of course, depreciation will be your biggest expense going forward as the value of these properties declines.  Financing a money losing venture only multiplies the losses.

It's really strange that you just make shit up.

Depreciation has NO effect on expense at all.
Property tax will go down if property value declines.
HOA stays the same for years.
Maintenance and repairs do happen, but not as often as you think.
Again, property management fees stay the same for year. And what the hell is rent collection cost if you use a property management company?

It's like you don't understand anything. You really are just dumb.

Depreciation is what happens when a house goes down in value.  You know this from the Lake Elsinore debacle.
If property tax goes down, that means you are losing money.  Think.
HOA stays the same for years?  That has not been my experience.
Maintenance is an ongoing thing.  How do you not know that?
Repairs happen when they happen, but that has no bearing on whether the cost is going up or not.  A percentage of rents will go towards repairs no matter what.
Property management is a an expense that fluctuates when you self-manage.  Again, think.
Rent collection / delinquency costs go up during downturns whether you self-manage or not.

LL, let me ask you again. How dumb are you?

What does depreciation have anything to do with INCREASING COSTS?
What does lower property value have anything to do with INCREASING COSTS?
Am I paying more on the mortgage because my property went down? No, right? So what the fuck are you talking about with INCREASING COSTS?

You're NOT losing money UNLESS you sell the property. You really have no idea what losing money means, do you?

When I first bought my Lake Elsinore home, HOA fee was $104. Then it dropped to $98, then $88, and then finally to $78, and it stayed that way until present.

You realize that maintenance and repairs for rentals don't occur very often, right? I had some repairs for the Lake Elsinore rental, but never had any maintenance costs.

Well, if you self-manage, then you don't even have pay property management fee and I never had any issue with rent collection. And we're talking about Riverside county tenants here. Orange county tenants are even more reliable.

All the shit that you're talking about is just your own assumption without anything to back it up. And you really have no idea what you're talking about. You're just embarrassing yourself.

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Offline Compressed-Village

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Re: Declining Rents
« Reply #62 on: September 23, 2022, 01:45:25 PM »
@CAL, now I know for sure you owned and operated rental properties. LL, he demonstrates he never have any experience in owning a rental, much less running it. And to give advice when to buy and when to sell from Liar Loans carry no weight.

The best thing to do during high inflation and high rate is to keep a good rental and good tenants that can pay. A good rental in good neighborhood will keep upward pricing power. That’s the whole reason why they are willing to pay higher price for good school and safe neighborhoods. Higher rate = higher rental premium. Then you got all those tax write off goodies. Of course, it’s not the price of the property that worry me, it’s the cash flow. Always cash flow take precedence. If the price of my rental drop say 200k, is my cash flow still positive? That is what I care about.

Especially, now with the borrowing cost high and will get higher, I rather keep the house empty if I can’t find good tenants then to sell it.

That’s just me.

Offline Liar Loan

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Re: Declining Rents
« Reply #63 on: September 23, 2022, 02:43:38 PM »
Yeah, a whopping 0.13% decrease after 12.3% increase. Scary!!! Really bad news!!! Housing price will fall by 0.13%. Run for the hills.

A -1.6% annualized decline with inflation running at 10%.  Landlords are getting squeezed by higher costs and lower rents, and this is just the first of what will be many months of bad news. 

Your new neighbors were smart to rent because their costs are fixed, if not declining, while yours are steadily increasing.

Ask LL, he rents in Irvine.

Yep, rent free though.  ;)

The declining in a 20 % YOY increase, WTF is LL smokin'?

The posters here are literally losing their minds.

I hope they didn't rent in the past 6-9 months because rents are up over 25% in Irvine in the past year and if they rented a home earlier those tenants can expect a rent hike upon lease expiration.  I bought 2 rentals in 2021 with a client and our fixed rate is 2.99% so how are our costs going up?

It's strange that I would have to explain this to a CPA, but ok, here goes:

Depreciation + Taxes + HOA + Maintenance + Repairs + Management + Rent Collection costs are all going up.  Of course, depreciation will be your biggest expense going forward as the value of these properties declines.  Financing a money losing venture only multiplies the losses.

It's really strange that you just make shit up.

Depreciation has NO effect on expense at all.
Property tax will go down if property value declines.
HOA stays the same for years.
Maintenance and repairs do happen, but not as often as you think.
Again, property management fees stay the same for year. And what the hell is rent collection cost if you use a property management company?

It's like you don't understand anything. You really are just dumb.

Depreciation is what happens when a house goes down in value.  You know this from the Lake Elsinore debacle.
If property tax goes down, that means you are losing money.  Think.
HOA stays the same for years?  That has not been my experience.
Maintenance is an ongoing thing.  How do you not know that?
Repairs happen when they happen, but that has no bearing on whether the cost is going up or not.  A percentage of rents will go towards repairs no matter what.
Property management is a an expense that fluctuates when you self-manage.  Again, think.
Rent collection / delinquency costs go up during downturns whether you self-manage or not.

LL, let me ask you again. How dumb are you?

What does depreciation have anything to do with INCREASING COSTS?
What does lower property value have anything to do with INCREASING COSTS?
Am I paying more on the mortgage because my property went down? No, right? So what the fuck are you talking about with INCREASING COSTS?

You're NOT losing money UNLESS you sell the property. You really have no idea what losing money means, do you?

When I first bought my Lake Elsinore home, HOA fee was $104. Then it dropped to $98, then $88, and then finally to $78, and it stayed that way until present.

You realize that maintenance and repairs for rentals don't occur very often, right? I had some repairs for the Lake Elsinore rental, but never had any maintenance costs.

Well, if you self-manage, then you don't even have pay property management fee and I never had any issue with rent collection. And we're talking about Riverside county tenants here. Orange county tenants are even more reliable.

All the shit that you're talking about is just your own assumption without anything to back it up. And you really have no idea what you're talking about. You're just embarrassing yourself.

Depreciation represents the destruction of your net worth.  That becomes an expense of owning the property, because it's no longer an investment, but a liability.  Your negative returns are real whether you sell or not.  If you make $5k in cash flow, but lose $50k in equity that is a loss because value is being destroyed.

If you claim you never spent anything on maintenance for 16 years, then I think you are lying to yourself.  You are planning to sell soon... How are the flooring and paint?

How many HOA's in Irvine are lowering their dues year after year?  Bueller?  Bueller?

If you self-manage it might be even more expensive than paying a manager, depending on the value of your time.  You talk about self-management as if it's free.  Everything has a cost, and the cost of management is going up.

Just because you were able to find reliable tenants in Elsinore means everybody can?  Please...

Offline nosuchreality

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Re: Declining Rents
« Reply #64 on: September 23, 2022, 03:05:38 PM »
@CAL, now I know for sure you owned and operated rental properties. LL, he demonstrates he never have any experience in owning a rental, much less running it. And to give advice when to buy and when to sell from Liar Loans carry no weight.

The best thing to do during high inflation and high rate is to keep a good rental and good tenants that can pay. A good rental in good neighborhood will keep upward pricing power. That’s the whole reason why they are willing to pay higher price for good school and safe neighborhoods. Higher rate = higher rental premium. Then you got all those tax write off goodies. Of course, it’s not the price of the property that worry me, it’s the cash flow. Always cash flow take precedence. If the price of my rental drop say 200k, is my cash flow still positive? That is what I care about.

Especially, now with the borrowing cost high and will get higher, I rather keep the house empty if I can’t find good tenants then to sell it.

That’s just me.

We’re likely selling our rental.  The distance, degradation in tenant pool and HOA maintenance and expense issue are flags.

Market has moved a lot, but after moving a long term tenant out, we’re slowly closing in on a years gross rent to return the unit to sale/rent status.


Offline CalBears96

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Re: Declining Rents
« Reply #65 on: September 23, 2022, 04:38:02 PM »
Depreciation represents the destruction of your net worth.  That becomes an expense of owning the property, because it's no longer an investment, but a liability.  Your negative returns are real whether you sell or not.  If you make $5k in cash flow, but lose $50k in equity that is a loss because value is being destroyed.

If you claim you never spent anything on maintenance for 16 years, then I think you are lying to yourself.  You are planning to sell soon... How are the flooring and paint?

How many HOA's in Irvine are lowering their dues year after year?  Bueller?  Bueller?

If you self-manage it might be even more expensive than paying a manager, depending on the value of your time.  You talk about self-management as if it's free.  Everything has a cost, and the cost of management is going up.

Just because you were able to find reliable tenants in Elsinore means everybody can?  Please...

What does net worth have anything to do with RISING COSTS? Please explain. Property value drops and rises. It has NOTHING to do with COSTS. Negative return on paper is NOT real.

I repeat, it's NOT a LOSS until you sell.

Man, you really are dumber than a brick wall. I'll go talk to a brick wall now.

Offline CalBears96

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Re: Declining Rents
« Reply #66 on: September 23, 2022, 04:46:08 PM »
We’re likely selling our rental.  The distance, degradation in tenant pool and HOA maintenance and expense issue are flags.

Market has moved a lot, but after moving a long term tenant out, we’re slowly closing in on a years gross rent to return the unit to sale/rent status.

We decided to sell our rental.

We used a property management company that charges $99 flat fee per month, so distance isn't really an issue. Same fee since we started by in 2007.

My two concerns are tenant reliability and dealing with HOA requirements. We were lucky that our tenants continued during COVID, but it did give us a scare. We don't want to have this feeling. HOA for my area is a pain. They keep finding these violations, so I had to contact property management and ask them to contact tenants to take care of them. But I think at some point I was able to put property management's address on my HOA profile, so the violation letter was sent to them (along with the email to me).

We are just not cut out to be landlords.

Offline Compressed-Village

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Re: Declining Rents
« Reply #67 on: September 24, 2022, 08:03:54 AM »
@CAL, now I know for sure you owned and operated rental properties. LL, he demonstrates he never have any experience in owning a rental, much less running it. And to give advice when to buy and when to sell from Liar Loans carry no weight.

The best thing to do during high inflation and high rate is to keep a good rental and good tenants that can pay. A good rental in good neighborhood will keep upward pricing power. That’s the whole reason why they are willing to pay higher price for good school and safe neighborhoods. Higher rate = higher rental premium. Then you got all those tax write off goodies. Of course, it’s not the price of the property that worry me, it’s the cash flow. Always cash flow take precedence. If the price of my rental drop say 200k, is my cash flow still positive? That is what I care about.

Especially, now with the borrowing cost high and will get higher, I rather keep the house empty if I can’t find good tenants then to sell it.

That’s just me.

We’re likely selling our rental.  The distance, degradation in tenant pool and HOA maintenance and expense issue are flags.

Market has moved a lot, but after moving a long term tenant out, we’re slowly closing in on a years gross rent to return the unit to sale/rent status.

For sure, the wears and tears on rental is substantially higher than owner occupancy. Renters, for the most part will not take care of the house like you would have if you live there. That is why at least, an annual walk through is a must. Particularly, if you have a tenant that are long term. 1) It show that you care about your property 2) If the annual inspection done correctly, it will reveals minor fixes that when take care for early, could prevent manifestation to a larger fix and cost. 3) Convenient over the phone and email is fine, but the annual inspection also give you the opportunity to talk to your tennants and bring the human emotion and empathy into the mix. I only want to operate in A class neighborhood and nothing else. When the time is right, price right, and the location is right, buy a rental among other hard assets gives you diversification. Of course, first and foremost cash flows is king. If the number don't jive, there is no sense in investing and holding. And I think equity market and housing finally get the message from the FED that they are out to crush high prices.

Offline Liar Loan

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Re: Declining Rents
« Reply #68 on: September 26, 2022, 01:43:47 PM »
Depreciation represents the destruction of your net worth.  That becomes an expense of owning the property, because it's no longer an investment, but a liability.  Your negative returns are real whether you sell or not.  If you make $5k in cash flow, but lose $50k in equity that is a loss because value is being destroyed.

If you claim you never spent anything on maintenance for 16 years, then I think you are lying to yourself.  You are planning to sell soon... How are the flooring and paint?

How many HOA's in Irvine are lowering their dues year after year?  Bueller?  Bueller?

If you self-manage it might be even more expensive than paying a manager, depending on the value of your time.  You talk about self-management as if it's free.  Everything has a cost, and the cost of management is going up.

Just because you were able to find reliable tenants in Elsinore means everybody can?  Please...

What does net worth have anything to do with RISING COSTS? Please explain. Property value drops and rises. It has NOTHING to do with COSTS. Negative return on paper is NOT real.

I repeat, it's NOT a LOSS until you sell.

Man, you really are dumber than a brick wall. I'll go talk to a brick wall now.

You bought a home at the peak of the worst housing bubble in US history after doing the same thing in 2005.  I feel bad for you.

Offline CalBears96

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Re: Declining Rents
« Reply #69 on: September 26, 2022, 03:19:41 PM »
Depreciation represents the destruction of your net worth.  That becomes an expense of owning the property, because it's no longer an investment, but a liability.  Your negative returns are real whether you sell or not.  If you make $5k in cash flow, but lose $50k in equity that is a loss because value is being destroyed.

If you claim you never spent anything on maintenance for 16 years, then I think you are lying to yourself.  You are planning to sell soon... How are the flooring and paint?

How many HOA's in Irvine are lowering their dues year after year?  Bueller?  Bueller?

If you self-manage it might be even more expensive than paying a manager, depending on the value of your time.  You talk about self-management as if it's free.  Everything has a cost, and the cost of management is going up.

Just because you were able to find reliable tenants in Elsinore means everybody can?  Please...

What does net worth have anything to do with RISING COSTS? Please explain. Property value drops and rises. It has NOTHING to do with COSTS. Negative return on paper is NOT real.

I repeat, it's NOT a LOSS until you sell.

Man, you really are dumber than a brick wall. I'll go talk to a brick wall now.

You bought a home at the peak of the worst housing bubble in US history after doing the same thing in 2005.  I feel bad for you.

You are so dumb I feel bad for you.

Offline Liar Loan

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Re: Declining Rents
« Reply #70 on: September 27, 2022, 10:11:42 AM »
Depreciation represents the destruction of your net worth.  That becomes an expense of owning the property, because it's no longer an investment, but a liability.  Your negative returns are real whether you sell or not.  If you make $5k in cash flow, but lose $50k in equity that is a loss because value is being destroyed.

If you claim you never spent anything on maintenance for 16 years, then I think you are lying to yourself.  You are planning to sell soon... How are the flooring and paint?

How many HOA's in Irvine are lowering their dues year after year?  Bueller?  Bueller?

If you self-manage it might be even more expensive than paying a manager, depending on the value of your time.  You talk about self-management as if it's free.  Everything has a cost, and the cost of management is going up.

Just because you were able to find reliable tenants in Elsinore means everybody can?  Please...

What does net worth have anything to do with RISING COSTS? Please explain. Property value drops and rises. It has NOTHING to do with COSTS. Negative return on paper is NOT real.

I repeat, it's NOT a LOSS until you sell.

Man, you really are dumber than a brick wall. I'll go talk to a brick wall now.

You bought a home at the peak of the worst housing bubble in US history after doing the same thing in 2005.  I feel bad for you.

You are so dumb I feel bad for you.

Haha!!!  I needed a good laugh this morning.

I think this is your top comment in a year of posting on TI.  Congrats!

Offline Liar Loan

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Re: Declining Rents
« Reply #71 on: September 27, 2022, 10:13:50 AM »
EDIT: Laughing so hard, I accidentally re-posted.

Offline Compressed-Village

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Re: Declining Rents
« Reply #72 on: September 27, 2022, 10:38:08 AM »
You are dumb, because you started this thread with “Declining Rent”, amongst other terrible advice and criticism of people purchases. Life goes on even during Great Depression, such as house hold formations, having kids and moving for jobs.

Don’t laugh too hard, the jokes is on you.

 

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