Declining Rents

[zubs]

I own a warehouse in Corona that I rent to myself.
In 2019 I leased my warehouse for $8,500/month
In 2020 I leased my warehouse for $9,000/month
In 2021 I leased my warehouse for $10,000/month
In 2022 I leased my warehouse for $12,000/month

I just checked loopnet.com to see how much I really should be leasing this warehouse....
It says $20,000/month.


I should stop working and just collect rents.


oh yeah and pretend to move to TX.

 

[nosuchreality]

Irvine rentals are up about 20% YOY, I know because I do 8-10 private rental listings for clients every year.  I have noticed that the number of rental listings has increased from 150-160 to 170-180 in Irvine but I'm still getting multiple applications at list price and the homes are being rented within 1-2 weeks.  That being said, I think that rental prices will flatten out because they've already gone up so much in the past 2 years.

The alternative is paying $3000/mo for a 2500 sf 3 bedroom in Perris.

 

[Hugo Township]

I own a warehouse in Corona that I rent to myself.
In 2019 I leased my warehouse for $8,500/month
In 2020 I leased my warehouse for $9,000/month
In 2021 I leased my warehouse for $10,000/month
In 2022 I leased my warehouse for $12,000/month

I just checked loopnet.com to see how much I really should be leasing this warehouse....
It says $20,000/month.


I should stop working and just collect rents.


oh yeah and pretend to move to TX.

I'm going through a business lease for a new location right now and am learning that commercial real estate brokers aren't always the most organized. It's crazy to me considering the dollars are much higher than residential rentals, but the number of people with incomplete/missing LoopNet listings, inaccuracy, unwillingness to call back, etc is insane. In other words, check to see if that $20k number holds water first..

 

[zubs]

Would you say $1.00 per square foot per month is market rate in Corona?
Also includes NNN

 

[zubs]

This website says it costs $1.55 - $1.99 per square foot per month to rent a warehouse in Irvine.
So my $1 estimate for Corona is probably too low.

https://www.propertyshark.com/cre/industrial/us/ca/irvine/?IncludeCoworking=false&CoworkingWorkspaceTypes=0&Zoom=13&Viewport=-117.82993362475587,33.59369454795456,-117.66805694628907,33.72942883103387&GeopickerType=viewport

 

[CalBears96]

This website says it costs $1.55 - $1.99 per square foot per month to rent a warehouse in Irvine.
So my $1 estimate for Corona is probably too low.

https://www.propertyshark.com/cre/industrial/us/ca/irvine/?IncludeCoworking=false&CoworkingWorkspaceTypes=0&Zoom=13&Viewport=-117.82993362475587,33.59369454795456,-117.66805694628907,33.72942883103387&GeopickerType=viewport

It's probably around $1.1-$1.3 in Corona.

 

[Liar Loan]

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.

 

[irvinebullhousing]

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.

Looks who?s speaking. I feel really sad for you, my friend.

 

[CalBears96]

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.

Looks who?s speaking. I feel really sad for you, my friend.

LL is so dumb it's not even funny.

 

[The Motor Court Company]

some people just loves to play contrarian

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.

Looks who?s speaking. I feel really sad for you, my friend.

LL is so dumb it's not even funny.

 

[usctrojancpa]

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?

 

[TestingIrvine]

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.

Looks who?s speaking. I feel really sad for you, my friend.

LL is so dumb it's not even funny.

When you are dead, you do not know you are dead. It's only painful & difficult for others. The same applies when you are stupid?or named Liar Loan.

It?s just a joke.

Just send us real info / data, or be reasonable in your arguments instead of doubling/tripling down on your argument man.

 

[CalBears96]

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?

Basically, LL is just throwing shit on the wall and hopes it sticks. He just doesn't understand anything. My friend's lease just expired and her rent hike was like 30%. She moved to another apartment, but the rent hike was also more than 20%. She just moved a couple of weeks ago, so this is not a few months ago.

 

[sleepy5136]

The low interest rates during 2020-2021 really screwed over first time home buyers that did not get in during that time. We now have a situation where people with those low rates are not going to move and hog up those homes. So much so that even if those people were to up-size, they might just rent it out and cash flow. That will only create less inventory and push prices up longer term.

 

[CalBears96]

The low interest rates during 2020-2021 really screwed over first time home buyers that did not get in during that time. We now have a situation where people with those low rates are not going to move and hog up those homes. So much so that even if those people were to up-size, they might just rent it out and cash flow. That will only create less inventory and push prices up longer term.

My wife has taken a liking to Cielo 3. We'll give ourselves 1.5-2 years to earn enough for 40%-50% down payment from the proceeds selling our Eastvale and Lake Elsinore homes to see if we can buy one. That really depends on how the housing market fares. Now I'm hoping for a 20% drop.  ;D If we can somehow afford to buy it, and by the time we move in the housing market has recovered, we'll sell the Bluffs home. Otherwise, we'll rent it out for 3 years and then sell.

 

[sleepy5136]

The low interest rates during 2020-2021 really screwed over first time home buyers that did not get in during that time. We now have a situation where people with those low rates are not going to move and hog up those homes. So much so that even if those people were to up-size, they might just rent it out and cash flow. That will only create less inventory and push prices up longer term.

My wife has taken a liking to Cielo 3. We'll give ourselves 1.5-2 years to earn enough for 40%-50% down payment from the proceeds selling our Eastvale and Lake Elsinore homes to see if we can buy one. That really depends on how the housing market fares. Now I'm hoping for a 20% drop.  ;D If we can somehow afford to buy it, and by the time we move in the housing market has recovered, we'll sell the Bluffs home. Otherwise, we'll rent it out for 3 years and then sell.

Hopefully you wait at least 2 years to collect the 500k tax exemption

 

[usctrojancpa]

The low interest rates during 2020-2021 really screwed over first time home buyers that did not get in during that time. We now have a situation where people with those low rates are not going to move and hog up those homes. So much so that even if those people were to up-size, they might just rent it out and cash flow. That will only create less inventory and push prices up longer term.

My wife has taken a liking to Cielo 3. We'll give ourselves 1.5-2 years to earn enough for 40%-50% down payment from the proceeds selling our Eastvale and Lake Elsinore homes to see if we can buy one. That really depends on how the housing market fares. Now I'm hoping for a 20% drop.  ;D If we can somehow afford to buy it, and by the time we move in the housing market has recovered, we'll sell the Bluffs home. Otherwise, we'll rent it out for 3 years and then sell.

Smart move, tax free gains for the win!

 

[CalBears96]

The low interest rates during 2020-2021 really screwed over first time home buyers that did not get in during that time. We now have a situation where people with those low rates are not going to move and hog up those homes. So much so that even if those people were to up-size, they might just rent it out and cash flow. That will only create less inventory and push prices up longer term.

My wife has taken a liking to Cielo 3. We'll give ourselves 1.5-2 years to earn enough for 40%-50% down payment from the proceeds selling our Eastvale and Lake Elsinore homes to see if we can buy one. That really depends on how the housing market fares. Now I'm hoping for a 20% drop.  ;D If we can somehow afford to buy it, and by the time we move in the housing market has recovered, we'll sell the Bluffs home. Otherwise, we'll rent it out for 3 years and then sell.

Hopefully you wait at least 2 years to collect the 500k tax exemption

That's why we're giving ourselves 1.5-2 years before buying. With the 6 months or so construction time, we'll pass the 2 years period.

We love our current home, but it has its flaws. At least, it lets us to be in Irvine, so it's going to be a lot easier to upsize. If things don't work out with Cielo 3, we still have this one. If it works out, then great.

 

[Ready2Downsize]

The low interest rates during 2020-2021 really screwed over first time home buyers that did not get in during that time. We now have a situation where people with those low rates are not going to move and hog up those homes. So much so that even if those people were to up-size, they might just rent it out and cash flow. That will only create less inventory and push prices up longer term.

My wife has taken a liking to Cielo 3. We'll give ourselves 1.5-2 years to earn enough for 40%-50% down payment from the proceeds selling our Eastvale and Lake Elsinore homes to see if we can buy one. That really depends on how the housing market fares. Now I'm hoping for a 20% drop.  ;D If we can somehow afford to buy it, and by the time we move in the housing market has recovered, we'll sell the Bluffs home. Otherwise, we'll rent it out for 3 years and then sell.

I was at the pool a couple days ago and got to talking with some other people there. First thing that comes up is always where are you from (Cali, Oregon and WA state in this group). Next thing is weather, then do we like it here. Everyone says LOVE it (not the heat but everything else). Lastly is house prices (thank God we sold. Doesn't matter how far things fall because we all bought lower and got cash in the bank so no matter what we're ahead). THEN someone says I'm praying houses crash. I want to buy another house here with x or y features and everyone of us it turns out is hoping for the same thing. I said I'm going to let my daughter live in this one and rent their house out and the rest said they would rent out what they have. We all have enough cash in the bank from our sales to buy another house.

Bottom line, I think there are alot of people actually hoping houses tank in addition to investors who already were buying and anyone who missed out. We've seen too many downturns in stocks and housing to be scared out of buying in a downturn.

I'm keeping my eyes on the builders here. They all knew things were slowing and all at once changed course from releasing only 3 or 4 houses and building a spec home or two every month to suddenly releasing a dozen. That's why there are so many on the mls but they actually aren't built yet. That comes at year end or early next year. Been around the block enough to know when they sit awhile actually built, that is the time to negotiate all those upgrades they stuck in there out. Just waiting. I know this area is coming back after the glut they created is worked thru. People are still moving here and companies are still building new facilities which won't be open till 2024.

Too many renting out could cause rents to plummet but a downturn in prices will take care of that and jobs are going to increase here to sop up those units.

 

[Danimal]

The low interest rates during 2020-2021 really screwed over first time home buyers that did not get in during that time. We now have a situation where people with those low rates are not going to move and hog up those homes. So much so that even if those people were to up-size, they might just rent it out and cash flow. That will only create less inventory and push prices up longer term.

My wife has taken a liking to Cielo 3. We'll give ourselves 1.5-2 years to earn enough for 40%-50% down payment from the proceeds selling our Eastvale and Lake Elsinore homes to see if we can buy one. That really depends on how the housing market fares. Now I'm hoping for a 20% drop.  ;D If we can somehow afford to buy it, and by the time we move in the housing market has recovered, we'll sell the Bluffs home. Otherwise, we'll rent it out for 3 years and then sell.

Hopefully you wait at least 2 years to collect the 500k tax exemption

That's why we're giving ourselves 1.5-2 years before buying. With the 6 months or so construction time, we'll pass the 2 years period.

We love our current home, but it has its flaws. At least, it lets us to be in Irvine, so it's going to be a lot easier to upsize. If things don't work out with Cielo 3, we still have this one. If it works out, then great.

Already thinking about buying new place? That was fast. You have barely lived in Bluff 2 for less than 3 months.  What flaws do you see?

Cielo 3 is nice but current price is outrageous.