In case you missed it in print…
Jason Hidalgo of the Reno Gazette-Journal wrote a piece about the increasing number of investors looking to purchase in the Reno-Sparks market. With house prices now off nearly two-thirds of their peak prices and interest rates holding at historical lows, many investors are finding that now is a good time to buy. See Investors return to Reno real estate market as rates remain low
And investor optimism is not the only sentiment on the rise. See this AP story: Builders’ sentiment rises for 5th straight month, to highest level since in nearly 5 years
E.Edward
Yeah investing in a depreciating asset, Great Idea, I mean real estate has preformed so-well over the past 5 years!
This is just handful of impatient greedy clowns trying to get some type of return on there dollars before there pals do….. To start with the way I see it there equity is going out faster than the rent checks come-in!
Your gonna risk an inflated 150-200k to yield 1400 a month ya-think……really?
Minus of course- that assured initial start-up cost…..missing appliances, new carpet, some flooring, drywall, paint, busted-up doors and cabinets maybe some dead lawn/landscaping etc.
Oh’ and lets not forget those holding costs- taxes, insurance, association fees, maintenance,up-keep, liability, that 2 months down because some newly unemployed tenant just trashed your investment etc. etc……. all this in an inflated unsure depreciating market while watching your hard earned down payment or cash disappear to net what $7-800 a month maybe?….. No thanks!…… Investment properties?….. LOL, That up and died along time ago!
Hey wait till these rates are forced up…….Then will check back with these idiots!
Twister
Its good to see investors are in this area strong…they will be the ones who put the bottom in housing prices. Buy low, sell high!
Waldo
Yes! And don’t forget the Super Bowl Effect!
Guy assures us that now that the Super Bowl is over, all kinds of buyers including investors and non investors are coming out in great abundance, ready to get in bidding wars, cash in hand, to buy!
Everybody got their seat belt strapped on I hope? I sure do!
Jack
Edward
Being a landlord and knowing how to select the Properties that will yield solid returns isn’t for everyone.
However I will continue to enjoy my 11% cap rate.
Raymond
I am always suspect of the guy who boasts about his stock market returns, as in, “hey, dude, I am up 18.45% ytd “. These are usually the guys who have not been in the game for very long and who think that because they are doing well today, they are geniuses who are going to do well forever. Long term investors who have taken their hits along with their gains over the years do not tend to display such braggadocio.
I tend to think the same way of people who come on real estate blogs and rap about their cap rate. Jack, what your cap rate has been for the last 12o days is meaningless. Come back in 5 years and let us know what it’s been.
Vandy
Excellent comment Raymond. Newbie landlords who have never had the furnace blow up or the roof fail or have their tenant skip out, take all the appliances with them, and blast two foot holes in the sheetrock, have no idea how quickly that cap rate can go negative.
But no doubt Jack is an expert at picking properties and tenants and things like that will never happen to him.
MikeZ
Yeah investing in a depreciating asset, Great Idea, I mean real estate has performed so-well over the past 5 years!
I’m pretty sure you realize that there’s more to the equation that appreciation and depreciation. If the asset is depreciating 5%/yr but cash flowing 10%/yr, it’s a money maker.
Maintenace costs? It’s true that you might need a new roof and A/C right now but you can expect maintenance, wear and tear and modernization costs to average 1-2%/yr.
And damage? Well, that’s what insurance is for.
komputodo
MikeZ
“I’m pretty sure you realize that there’s more to the equation that appreciation and depreciation. If the asset is depreciating 5%/yr but cash flowing 10%/yr, it’s a money maker.”
Ummm, let me see……….buy a house for 100k, depreciating at 5% per year so the first year I lose 5k, house payment 500/mo or 6k per year, cash flow 10%/year or 600/year so after a year I’m down $4400 ($5000- $600=$4400). It must be that new math.
MikeZ
komputodo, your understand of cash flow is wrong; cash flow includes costs like mortgage and property tax payments.
http://en.wikipedia.org/wiki/Cash_flow