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I don’t think it matters. Anything 6 months to 3 years pays pretty well right now. That’s about the term for a tenant lease. The high yields in treasuries just took out SVB. I’m wondering if some regional banks may have this issue in the next few months. That may cause lending spreads to widen...

The market rate of rent will fall below the upkeep cost. So your net cash flow will be negative. Yes, I’m envisioning very tough times ahead, including double digit rates. The alternative is a very deep recession on an election year eve, which is unlikely but would save us the high rate...

You sell because you are forced to. The economic conditions will force you to if you also start losing rent and have to cover the cost of maintaining the rental. I’m not sure if you have gotten too used to the low rate conditions the last 15 years. What I’m describing is how things used to be...

your mindset is similar to someone buying a dividend paying stock and saying higher interest rates have no effect on your dividend. Assuming the dividend/rent stays constant due to weaker conditions from higher rates, what happens if stock/home prices fall by 50%? The income generation now pales...

If the government doesn’t raise taxes on the investors, then the fed has to raise rates to indirectly tax them. You would sell your rental if rates went to 20% right? You may think I sound crazy but I fully support a mortgage rate of 20% if it obliterates the housing market and forced a reset...

Because we don't have the guts to tax non-resident owners higher. I've said it many times... raise property taxes, then give a deduction on the state tax filing. Out of staters and foreign investors pay up on higher taxes. Make it 1%, and watch their return plummet and make them sell for better...

Based on the comments, I don’t think my argument is clear. Let’s imagine if you got 100% return annually on a 30 year bond. Would you keep a rental property, or sell it to buy the bond? Sure, 100% isn’t realistic, but what about 50 or 25? What about 10? How high does the rate have to be for...

Investors would sell because the price of the home is falling while there are better options out there. My scenario allows homeowners to stay there so long as they can make payments, but investors leave for better opportunities

They can’t do the exchange if the market free falls. You need to force a liquidation in the market with the high rates, where one seller forces another to sell just so they aren’t the last one. You can only do that if a panic happens and we didn’t get that on the last high. That means we need...

And to get inventory up, you need investors to liquidate real estate. To do that you need higher rates so they sell the homes for bonds.

I still stand by my peak of 8%. We have more to go this cycle. The only reason it’s not 9% is fed will stop with higher inflation to bail out small businesses with bank lines of credit. They will be absolutely crushed by 2024 if we get recession at these rates

The goal of the fed is to push the rates in bonds so high that you would have to be stupid to by real estate over bonds as a source of fixed income. In that case the Chinese buyers will still pick property, but other than them nobody else will.

We could do it here too… problem solved. Non California residents pay higher property tax.

So sad the market isn’t falling more… either I’m completely wrong about inflation or the Fed is not doing its job

Agreed. Q4 2024. That’s assuming rates go up for the rest of the year, and then the economy hits recession Q4. That would make the housing bottom 1 year after the start of a tough recession.

We all know this… just know half of the people on this forum either benefited from it or are too rich to care. As for broader society, many are either too dumb or too fragile to admit that their idiot voting habits cause the very problems they complain about. Imagine if people were forced to...

Rates aren’t high enough. Record amount of speculation in real estate for rentals along with builders curtailing to rich international buyers is the problem. The fed can sell MBS and legislature can pass a tax on non resident owners. I have no faith our legislature in California will do that. I...

Rates aren’t high enough. Record amount of speculation in real estate for rentals along with builders curtailing to rich international buyers is the problem. The fed can sell MBS and legislature can pass a tax on non resident owners. I have no faith our legislature in California will do that. I...

Just want to point out that if property prices aren’t falling enough with higher rates, it just means rates aren’t high enough. If rates go high enough, investors will sell homes and buy bonds for tenant stress free yield vs rent. This is something I don’t think the fed wants to do on an...

Which is why they need to start selling their MBS ASAP