Monday, October 20, 2014

Rental fury: The trend for renting continues to grow stronger. Housing starts jump largely on the back of multi-family housing starts.


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By: Dr Housing Bubble

There was an odd sort of rejoicing last week in the midst of market volatility.  Housing starts jumped but the people pointing at this failed to grasp that a large reason for this was because of multi-family housing starts.  In other words, the demand is reflecting a nation that is becoming a renter class.  This trend reflects a new workforce that has more part-time employment and less job security than the previous generation.  Why would you buy a home if your employment is more volatile?  The numbers are clear and we have added over 7 million renter households in the last 10 years.  Right now we are at the peak of renting households.  However, we peaked for homeownership back in 2006.  Since 2006, we’ve actually lost about 2 million net homeowner households.  No need to worry since Wall Street has taken up the slack to purchase those single family homes and convert them back into rentals for the new modern day serfs.  The renting trend continues and the jump in housing starts reflects a change in home buying perception.

Deconstructing housing starts
It probably is worth digging into the housing starts data since some people were going hog-wild on data that reflects a trend towards renting.  Once broken down the solid rise in housing starts was brought on by multi-family units.  In other words, high density lower cost housing options.  You would like to see a higher demand for single family homes if the case were to be made that households were gearing up to purchase homes.  Yet this isn’t something builders are betting on.
First take a look at single family housing starts:
single family housing starts
Can you spot the so-called surge?  Probably not.  Since 2008 home builders have been holding steady when it comes to single family homes.  After all, investors were out in the market looking for lower priced properties to churn out healthier rental yields.  In places like California, many investors have already pulled back and we are seeing the vacuum that is being left.  Many sellers are pulling their properties off the market thinking next spring and summer they’ll be able to lure in some new lemming.

If we look into multi-family housing starts, we find an unmistakable trend:
multifamily starts
That is what a surge looks like.  This is a fury of activity to meet the demand of a renter nation.  No need to spin the above chart since it speaks loudly as to what builders are viewing as the next big thing.  Rents are holding steady and younger Americans are carrying large amounts of student debt and their salaries are unfortunately not all that great.  That is why you have 2.3 million adults living at home with their parents in California alone.
We have added a whopping 7 million renter households in the last decade:
renter and homeowner households
The number of households that rent has increased by 20 percent over the last decade.  This is a strong trend.  This of course is coming at the expense of creating less homeowners.  This isn’t necessarily a good or bad thing.  In fact, I think the crap shack addicted zip code chasers would in many cases be better off renting in the long-term.  Many use the logic of “well over 30 years if you stay…” but rarely do they stay put for that long.  Will you live in a 700 square foot shack for 10 years just to build some equity so you can then move into a 900 square foot shack in the endless property ladder game?  This of course assumes your timing is on given real estate is now a boom and bust business.  This is why in places like San Francisco, you have many high tech workers opting to rent and foregoing the chase to buy ridiculously priced properties.
It should be extremely clear that we are in a solid rental trend.  You can look at the housing start data above and arrive at your own conclusion as to where this “surge” is coming from.


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Fed: Banks easing lending standards

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 Paul Davidson, USA TODAY

The home mortgage market improved last quarter as demand increased and many banks eased their lending standards for the most creditworthy borrowers, the Federal Reserve said Monday.

Banks also loosened lending criteria for a variety of other consumer and business loans as the economy improved and demand picked up.

"The July survey results showed a continued easing of lending standards and terms for many types of loan categories, and a broad-based pickup in loan demand," the Fed said in its senior loan officer survey.

The developments could foreshadow a turnaround in the housing market, which has slowed this year amid last year's increases in mortgage rates and higher home prices.

More favorable credit conditions have been cited as a key driver of stronger economic growth recently. Last week, the government said the economy grew at a better-than-expected annual rate of 4% in the second quarter.

Credit standards for many types of loans, including mortgages, are still more stringent than they were before the 2008 financial crisis, but they've eased in recent months, the survey shows.

Mortgage demand started to flag as borrowing costs edged up after Federal Reserve officials signaled in May 2013 that the central bank would soon wind down bond purchases holding down long-term interest rates.

Rates for 30-year fixed mortgages jumped nearly a percentage point to 4.46% by the end of last year. But rates have drifted down this year — and were 4.12% last week — in part because the Fed has indicated it's in no rush to raise short-term interest rates.

Half the banks surveyed by the Fed in July said demand for prime mortgages was stronger the past three months. Lenders had reported weakening demand the previous three quarters.

Even more encouraging, nearly a quarter of the banks said they eased credit standards for prime mortgages, the most since the 2007 housing crash. Only about 6% toughened their criteria.

Several large banks also loosened standards, boosted credit limits and reduced the minimum credit score required for credit card loans.

A surge in borrowing similarly boosted business loans, with more than 30% of banks citing stronger demand from small, midsize and large businesses and only about 5% reporting weaker demand.

About 11% of banks surveyed eased their standards for loans to midsize and large companies, and 8% did so for small businesses, while none tightened.

Banks cited more aggressive competition from other banks or lenders as the main reason for loosening their standards, along with a more favorable economic outlook.

"The report points to continued gradual healing in the banking, corporate and household sectors," Barclays Capital said in a note to clients.
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Here's why renters in America feel trapped



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Here's why renters in America feel trapped

Yahoo Finance
 In a recent report by the FINRA Investor Education Foundation, researchers offer a sobering peek into the homes of renters. Nearly one-quarter of renters  in a survey of 25,509 renters and homeowners combined say meeting their monthly financial commitments is “very difficult,” and more than half say they wouldn’t be able to come up with $2,000 to cover an emergency expense.

Homeowners, by comparison, feel much more stable. Half as many homeowners as renters say they find meeting their monthly bills “very difficult” and nearly half say they have no trouble meeting their monthly expenses, according to the report.




View gallery
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Source: FINRA

Source: FINRA
Because the cost of renting and buying varies so widely across the U.S., you have to take reports like these with a healthy dose of salt. In some metro areas, like San Antonio and Phoenix, it’s actually much cheaper to buy a home than rent.  

But the reality is that the cost of renting across the country is on the rise, straining the budgets of many renters. In the largest 25 metro areas in the U.S., rents increased by 5.5% in 2013, eating up more than 40% of the average renter’s household income, according to Trulia. Most financial experts recommend spending less than one-third of income on housing. 

“Once [rent] is over 30%, that’s when you start getting into the danger zone financially,” says Helen Stephens, a certified financial planner in Dallas. “And the problem when you’re renting is that you may be in a lease for a year, and at the end of that year your landlord has the right to raise the rent on you.”




View gallery
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Source: Finra

Source: Finra
In addition to rising rents, coming up with the cash for day-to-day expenses, let alone a down payment, can be tough for renters. Renters are more likely to be saddled with debt of all kinds than homeowners, according to FINRA. More the half of renters carry credit card debt vs. 47% of homeowners. And renters are nearly twice as likely to have medical debt than homeowners, owing to the fact that fewer renters have health insurance. 
Not all renters are 20-somethings eating Cup Noodles and struggling to pay off student debt, either. The average age of renters today is 41, per FINRA, and nearly half of renters say they have dependents at home. 

The road from rent to mortgage

For renters who aspire to own a home one day, the biggest hurdle they’ll face is mastering cash flow — ensuring that the money coming in can not only cover their bills, but also leave them with wiggle room to save. Unfortunately, today’s renters have a lot less capital to work with than existing homeowners. According to FINRA, 74% of renters earn less than $50,000 a year, vs. 60% of homeowners who earn more than $50,000. 

Another challenge facing prospective home buyers: the daunting down payment -- typically 20% of the home’s purchase price. And Stephens advises her clients to build up an emergency maintenance fund of at least a few thousand dollars in case any unexpected repairs are needed once they’ve moved in. 

As for the best place to save for a down payment, Stephens recommends a regular bank account. Banks are offering paltry interest rates on savings now, but it’s a wiser option than investing it in the stock market, she says.
“I don’t believe in investing money in the market that you’re going to need for the short term,” she says. “I know it may not earn much [interest] in a bank but it is secure and it’s for a very targeted expense.” 

Preparing financially isn’t the only step to home ownership . Buying a house is a complex, long-term endeavor that requires a lot of mental prep work. In a FINRA survey of more than 25,000 homeowners and renters, 40% of renters answered a basic question about 15-year and 30-year mortgages incorrectly, compared to just 19% of homeowners.
“No one should buy a home if they can't understand basic finance,” says Ilyce Glink, author of “100 Questions Every First-time Home Buyer Should Ask”. “The quick way to bankruptcy is to buy a house you can't afford, get locked into mortgage payments, real estate tax bills, and maintenance and upkeep expenses.” 

Glink has written dozens of articles available for free with tips for first-time home buyers. But even she recognizes that home ownership isn’t for everyone. Sometimes, renting just makes more sense.

“Choose renting if you don't know where you're going to want to live in five years, if your employment situation isn't stable, and if you can't currently set aside 20% of your after-tax income into a savings account,” she says. “You might also choose renting if you're currently dating someone and hope to be in a long-term stable relationship that involves living together because otherwise you might buy a condo that's too small for your expanding family.”

 

Thursday, August 14, 2014

Feudal America creating an army of renters: A larger percentage of household income is going to rents and the CPI is once again missing the housing boom.


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Feudal America creating an army of renters: A larger percentage of household income is going to rents and the CPI is once again missing the housing boom.

Dr Housing Bubble

The housing market without a doubt is slowing down and it should be clear that the “hot” summer selling season is simply not going to materialize. Even in house horny Southern California, sales are down 12 percent year-over-year and the median price actually fell in July from June. Typically, the sunny California sun fries the portion of the brain looking at math during the summer but something else is going on. People also conveniently forget that 7,000,000 foreclosures have occurred since the housing bust hit with 1,000,000 happening here in the “never a bad time to buy” California market. We recently discussed the incredibly hot rental market in the state. It seems that rents are having a good run over the last year as more Americans welcome their new feudal landlords from Wall Street. In fact, we now have the highest percentage of households renting in 20 years. If we look at the data, what we find is that housing is simply consuming a larger portion of income for households. It is amazing how many people in California have absolutely no comprehensive plan for retirement. They are willing to leverage every penny into housing but ignore other important areas like building a balanced portfolio. Taco Tuesday baby boomers sit in million dollar crap shacks welcoming their student debt laden children back home while they feast on Purina Dog Chow. It is pretty clear what is going on right now: more of your income is being consumed by housing.

The conveyor belt to rental nation is moving efficiently
One of the points made during the early days of the first housing bubble was that the Bureau of Labor and Statistics did a poor job measuring housing inflation. The CPI uses the owners’ equivalent of rent (OER) as a substitute to actual housing payments or underlying home value (i.e., PITI). This does an okay job in stable housing markets but fails in meth addicted housing cycles like the one we now live in. The OER assumes you will rent your house out which of course, is not the case unless you are Wall Street. Many of the $700,000 crap shacks in SoCal would rent from $2,500 to $3,000 and probably went up about 5 percent over the last year. Yet some of these homes went up in price by 20 to 30 percent. If your goal is to measure price increases, shouldn’t you actually measure the price of the actual thing versus some derivative of it?

Since this is the measurement tool, you can see the big divergence in prices and rents here:

case shiller
The CPI once again has missed the housing jump of 2013. For example, in 2005 when the Case Shiller was showing 16 percent annual price increases, the CPI was showing rents and the OER going up by 2.5 to 3 percent. Seems like a big difference but of course, this gives the Fed more fodder to say inflation is muted even though housing is the biggest line item for most American families.
You’ll notice that the Case Shiller Index which is one of our better gauges of price went up nationwide by 14 percent last year. The CPI went up by 2.6 percent for the OER. Big difference.

So how are people paying for all of this? Well people are simply paying more of their income to rent:
renter income and rents
Source:  Mother Jones
With rents, you have to pay with actual household income. This is why in California, you have 2.3 million adults living at home because they simply cannot afford a rental. Pent up demand? I doubt it. This is why sales are dropping and prices have gone stagnant. It isn’t for want of buying. No. In fact people are lusting for housing just like they were in 2005. If given the chance, people would “ice challenge” their way into a ludicrous mortgage with the aspiration of property laddering their way up into the feudal class. You might be a renting pleb today, but tomorrow you will be the next oligarch of housing. By the way, cash sales hit a four year low in SoCal since investors either want massive annual gains or good cap rates.

We now find that since the recession ended a massive number of households are paying more than 50 percent of their income in rent:
paying more of your income for rent
In places like San Francisco, I’m sure this is a good portion of households. This has big implications for our spending addicted economy given that a larger portion of households now rent:
rental economy
Going back to the point of balancing out your plans for retirement, so many people assume their residence is somehow going to throw off income for them in old age. Many baby boomers are seeing this is not the case. You have taxes, insurance, maintenance, and other costs that actually suck money out of your income even when the principal and interest are taken care of. The funny thing about this is the big push for Prop 13 highlighted this at the core. That grandma that was being “kicked out” on the street because of higher taxes was an example of someone without a balanced portfolio. She had burned her mortgage but like death, taxes will never go away. Current baby boomers drinking Martinis in their hardwood floor and gold plated sarcophagus in SoCal many times are scraping by even though they have solid equity in their home. I love seeing a home in this category being put to market because you can see how outdated the place has become. Living in million dollar homes yet unable to make a few modifications.

Also, I tend to believe the renter numbers are understated. How many “kids” living at home are even paying rents to their parents? All we know is that 2.3 million adults in California live with their parents. This is one state of many. So for older folks, what will their income stream be in retirement? Social Security? Stocks? The figures don’t look good here. In many cases you have people with one or two years of living expenses and all of their net worth tied up in their home that will cost money to maintain. Now you can see why Prop 13 struck a chord back in the 1970s showing that history repeats and people in California have been lusting for homes for many decades, a tradition of sorts. Reverse mortgages are an option but your kids might hate you for it. Screw them right? They can pile into a rental and play furniture Tetris of getting in four people into a 2 bedroom 1,000 square foot place in any hipster area of Los Angeles.

It should be clear that what is simply happening is more disposable income is being taken into housing either by rents or mortgage payments. In California, close to half the state rents (and a growing number are living at home – rent or no rent). In L.A. County, the majority rent. Keep in mind all of this is happening as the stock market caps a near 200 percent run from 2009 and housing is coming off a banner 2013 year. Yet for Americans households, income growth is not keeping up. A big deal for the growing number of renters. For now, get used to the trend of feudal landlords.


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Tuesday, June 24, 2014

Why the Phoenix housing market has swung in favor of buyers.

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Payam Raouf
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 Why the Phoenix housing market has swung in favor of buyers.

Kristena Hansen
Reporter- Phoenix Business Journal
 
A year ago, the Phoenix-area housing market was facing a chronic shortage of homes for sale and surging prices exasperated would-be buyers.

Today, however, nearly the opposite is true.Supply has now stabilized, with buyers having 64 percent more listings to choose from on April 1 than they did a year ago, according to Arizona State University’s monthly housing report released today.

Prices have also been cooling recently. The Valley’s median home price even slipped by a combined 5 percent in January and February, only to nearly fully recover in March when it climbed back up to $204,520.

Despite the market now having swung in buyers’ favor, demand remains weak — except for luxury homes. Sales of homes priced above $500,000 were up 11 percent year-over-year in March, the report said. But the gain in luxury sales was overshadowed by huge declines at the lower end, resulting in a 20 percent drop in sales overall.

“The underlying key problem for entry-level and mid-range housing demand is a lack of household formation. This has been dropping for a long time due to a number of factors including unemployment, falling birth rates, lower net migration and greater home sharing especially among millennials,” said Michael Orr, the report’s author and the director of ASU’s Center for Real Estate Theory and Practice. “If household creation were at the normal long-term average, we would quickly have a housing shortage here in Greater Phoenix.”

With persistent weak demand and the slow summer season approaching, Orr said the price recovery that took place in March could eventually be erased.

“The period from March to May is almost always the strongest part of the year for demand, and it is highly probable we will see pricing fade again during the summer months, when the luxury, snowbird and active-adult markets go relatively quiet,” Orr said. “We may still be looking at little to no annual price appreciation by the end of the year.”

But lenders and so-called boomerang buyers could be key in helping solve the demand problem, Orr said.
Lenders, also feeling the brunt of weak demand, have been hurting for business in recent months. Late last month, new mortgage applications fell to a 14-year low, according to the Mortgage Bankers Association.

Orr suggested this may finally push lenders into easing their ultra-tight lending restrictions, which have been exacerbating the demand problem.

Between 2015 and 2019, Orr said the Valley may also see an uptick in demand from boomerang buyers, meaning those who lost their homes to foreclosure or short sale and have finished waiting the required four to seven years to be able to qualify for a mortgage again.


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Monday, May 26, 2014

More people with 700 plus FICO Score are renting than ever before!

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Payam Raouf
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More people with 700 plus FICO Score are renting than ever before!

In the past three months I have seen more applicants with 700 plus FICO credit score,  good jobs and clean records applying to rent our homes than I have ever seen before. The  #1 concern when you asked them why is,  uncertainty in the market, their jobs and I agree, it is cheaper to rent than to buy these days. 

Most buyers in the market these days are either first time home buyers or are the ones who are re-qualifying to purchase a home after a bankruptcy, foreclosure or a short sell with a small down payment using FHA or VA products. 

Many of the homes for sale on the market these days- in the $150,000 to $250,000 range- are previously rental homes most of which are very basic with minimal upgrades.

Many landlords have carried these homes for the past seven years have ran out of funds and can no longer keep up with the cost of maintenance and owning a rental property. As the result, they might use their last financial resource, maxing out their credit cards to apply a fresh coat of paint on the walls and possibly put down a cheap carpet hoping they'll sell it before they go back under the water again.  Home prices in most areas have fallen nearly 10% since the height of the market in mid 2012.

There does not go one day that we do not receive several requests from such landlords to put their homes back on the market for rent as soon as possible.

Well, thanks God the rental inventory is still low as so many landlords have put their homes up for sale. It will not be long before that is going to change as most of these homes are now coming back on the market as rentals again.

My suggestions:

If you are in the market to buy, either wait till the dust settles, unless you find a gem out there that is worth owning, or keep renting till you come across the one that is worth signing you name to.

If you are a landlord and have your house on the market for sale, either price it under the market if you can afford it and exit NOW or put it back on the market for rent IMMEDIATELY before the rental market is saturated again.

If you are a REAL investor, there are good opportunities out there to invest in. ! A lot of these landlords are desperate and all they want is to get out from under their obligations.  So, they are not looking for making a dime except to save their credit and stop the bleeding. So many of them walk into my office every week asking if we would buy their homes with a good tenant in place at substantially  below the current market value. We have been referring them to our investors as they come along.

In my humble opinion, this market is NOT going to see another substantial increase in prices for another 4 to 5 years. The whole world economy is going through transition and the news on the street is that things are going to get worse before they get better.

Obviously, there are always good deals out there and in the long run adjusted to inflation ( what your money can buy) owning a house may be a good investment. There are times that I heard someones daughter wants to paint her room pink and the landlord does not allow them. That in my opinion is a good reason to buy  a home if you ask me.

We buy, sell, lease and manage properties valley wide. Our rental policy standards are very high and as the result we have some of the best tenants in the valley. Over 70% of our tenants have been with us for more than 3 years and 95% of them renew their lessees every year unless they are moving out of the area or buying a house.

We offer ac complete package when it comes to investing in real estate utilizing Global Real Estate Investment, ( http://goglobalrealestate.com ) to market for sale and purchases, Arizona Property Management & Investments, ( http://azezrentals.com ) and Las Vegas Property Management and Investments ( http://timetorentvegas.com ) to keep our rentals occupied with quality tenants and BEST of it yet, we now offer full maintenance and home improvement services throughout the valley at affordable rates through Handyman Daily, ( https://handymandaily.com ) to keep our properties maintained , rent ready and marketable at all times.

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Friday, March 21, 2014

Investor exhaustion with investment properties hits: Blackstone’s acquisition pace has fallen by 70 percent from peak last year. Running the numbers on rentals in high priced markets.


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Investor exhaustion with investment properties hits: Blackstone’s acquisition pace has fallen by 70 percent from peak last year. Running the numbers on rentals in high priced markets.

By: Dr housing Bubble

Existing home sales had another weak month and the blame continues to be on the notorious polar vortex.  On the other hand, California is in a record drought and we are in an endless summer yet sales have hit multi-year lows as well.  Could it be that over paying for a pre-World War II house is not exactly fitting in the budget of the regular local buyer?  It is one thing to speculate but another to see what is happening on the ground.  The granddaddy of rental investors, Blackstone has tapered off its investment buying binge dropping in acquisition volume by 70 percent from their record highs from last year.  These are folks that run the numbers in bulk.  I speak to many local investors and many have not purchased properties in SoCal since early 2013 since the numbers simply did not make sense then and they certainly do not make sense now for cash flow opportunities.  The rest of investors are the late comers and the speculators, otherwise known as flippers.  It is interesting to see the mindset shift once again similar to 2006 when the volume was turned up so high that even uttering the words “correction” labeled one as a “doomer” or some other attack not based on numbers.  Unless you see real estate going up forever, you are basically camping out in a nuclear war shelter counting your stockpile until the end of days.  Yet numbers matter.  In many states and in certain markets, prices do make sense and have room to grow.  Not so much in California at least in the short-term.  This is why as we mentioned a site dedicated to housing data Zillow has reached 70,000,000 unique readers a month.  Apparently “setting it and forgetting it” does not apply to housing.  Let us run the numbers assuming you were looking for cash flow properties in Arizona and California.
Looking at investment properties in Arizona and California
In SoCal $500,000 gets you very little especially in L.A. and Orange Counties.  It might get you a nice condo in a sought after market.  As an investor, you are looking at cash flow on a variety of fronts.  Tax benefits are overplayed in many cases and most long-time investors understand this.  In fact, most seasoned investors will tell you to allocate close to 50 percent of your gross rents to costs outside of the regular mortgage payment.  Many investors that I know are not your Blackstone’s.  They are folks that buy properties with at least 25 percent down and finance the rest through conventional banks or through other lenders.  They do put a large amount of skin in the game so the numbers absolutely matter.
So let us take an example of two markets right now with Arizona and California.  It is very doable to find a $150,000 property in Arizona that will rent for $1,500 and a $500,000 condo in California will get you close to $2,500.  This is very common.  For some $500,000 in SoCal seems like a great deal so we’ll run with that.  I think people assume that this unlimited investor buying spree is going to continue deep into the future.  We are already seeing near record low sales volume even though prices went crazy in 2013.
So let us put together some figures here:
property analysis
Sure, some will tell you to close your eyes and simply pick a place and buy since real estate always goes up in certain markets.  But for investors, numbers absolutely matter and if Blackstone was optimistic on the future they would be buying up these high priced properties but they are not.  I think the above numbers highlight why investors are balking big time.  Novice investors will throw out figures like “that $2,500 a month in rent on that $500,000 home is great!”  $30,000 in gross rents seems great when you don’t crunch the numbers.  They fail to mention that you will fork out $132,000 of cold hard cash and still have a $375,000 mortgage as well.  I was very optimistic on the low HOAs above because in some areas in Orange County HOAs of $300 and higher per month are routinely common especially with condos.
You’ll notice that even in Arizona that $150,000 investment property with 25 percent down is going to bring in something like $445 per month assuming no vacancies, maintenance, or other unforeseen costs after your outlays are factored in.  Your tax benefits will absolutely depend on your tax bracket but if you are shelling out this kind of money, you are probably already at a very high tax bracket so any rental income you get is going to get taxed nicely.  Something tells me Blackstone is not a poor organization.
But look at the figures for California.  You are running in the red with a 25 percent down payment here.  This also assumes you are fully rented, no monthly expenses, and you don’t need to do any major repairs.  People are waiving contingencies on these crap shacks and fail to realize that a roof or slab work will likely eat up a few years of profits.  Plumbing work?  Flooring?  Labor is not cheap in SoCal.
What about appreciation?  This is where speculation dives in and this is why a correction is very likely to occur.  You pay rents from net monthly income!  Investors are 30 percent of the market in SoCal.  If they are seeing these crude numbers is it any shock that they are slowly pulling back?  So when the year-over-year gains go stale and even negative (which is very likely) do you think they will ramp back up?  The current pace makes no sense for investors already.  The only reason to purchase would be to flip and this is practically the definition of a mania if we are not seeing underlying incomes increase.  It is also why California is largely becoming a part of the new renter nation.
As an investor seeking out rental cash flow you can see why investing in California overall is a poor proposition.  The momentum we see today comes from the 21 percent jump in the median home price in 2013:
housing gains
It is interesting to hear those that talk about gains not actually putting their money where their mouth is.  If you assume that prices will go up, go for it and buy that house in Culver City or Pasadena.  Why not?  This is a sure bet from their perspective.  Make it a rental and reap those unlimited rewards.  As I mentioned from talking with investors that are deploying their own hard cash, California is not even on their radar.  The flippers on the other hand are still out there.  Whether you rent or buy, you should understand the nature of running the numbers especially on the biggest purchase of your life.  California for a generation has been nothing but boom and bust.  So it is interesting to hear these same people talk about a permanent plateau as if this was the history of SoCal:
hpi los angeles
The facts show boom and bust.  Just the reality of our market.  I’m sure the 7,000,000 folks that lived through a foreclosure wished they ran the numbers.



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