The real estate market is crazy right now

[Alfisti]

Yeah the termites is a bit of a worry. Reality is, this is the market guys, take it or leave it.

[Hawkeye]

Thankfully we don't really see as much of the crazy house stuff (now or in 2008) around here. Market prices are going up and stuff is selling quick, but they are building so damn fast and everything is pretty close so that keeps prices reasonable.

[M_Six]

Um, whut??

[Bimmersandmopars]

Lol. When this inflation bubble pops new entry investors are going to be jumping off bridges.

[Kolyan2k]

One of my tenants moving out. I am thinking maybe a good time to sell the condo......I dont know. Its roughly 200k now. But I am kinda afraid of putting that money in stock market too at this point

[Alfisti]

$200K? Where? i'll take 5.

[clickclickboom]

Originally Posted by Kolyan2k

One of my tenants moving out. I am thinking maybe a good time to sell the condo......I dont know. Its roughly 200k now. But I am kinda afraid of putting that money in stock market too at this point

Why sell? Raise the rent and put in a new tenant.

[Kolyan2k]

Originally Posted by Alfisti

$200K? Where? i'll take 5.

25-30 min from Boston...about 600sqft

[e90335e36m3]

Market is definitely slowing down in Charlotte, new home inventory is becoming available, a couple of homes I was looking at for my brother were at 6 and 25 days on market respectively (earlier this year 2-3 was normal).

[Kolyan2k]

Originally Posted by clickclickboom

Why sell? Raise the rent and put in a new tenant.

Reasons to sell.....well I live in MA where tenant is always right and can stop paying anytime one wants, then it will take me a year to kick em out. That's how I purchased the condo in 1st place...guy bought it as an investment, the very 1st tenant who moved in stopped paying and he was fcked and was forced to short sell.
Will most likely need to renovate again now.
I think real estate prices are on the top, I thought maybe good idea to cash in.
Raising rent isn't my main priority. $100 extra a month not going to do anything for me. I would much rather have a good paying tenant.
Lately the complex has had an issue with mice (like many other complexes), and the tenant kept calling me asking to deal with this. And what the hell am I supposed to do when it's the problem in all complexes that are not high rise.

One of my friends is a firm believer that real estate is a waste of time, investing money into some etf or mutual fund is a much better idea. I thought maybe dump all the money in SP500, or perhaps open a wealth management account at amerittade? (Meaning they invest your money for you for a fee)

[Alfisti]

Originally Posted by Kolyan2k

25-30 min from Boston...about 600sqft

WHat kind of neighbourhood? As in like guns going off left and right or pleasant enough?

600sq ft 30 mins from Toronto is going to be triple that.

I do hear you on real estate hassle though, I am about to split a small inheritance and when i crunch te numbers on real estate, i dunno, feel like i could invest in the big 5 banks here and make a similar return.

[cmyx6go]

Originally Posted by BMW F22

That’s my hesitation: the noise (next to a 4-way intersection) and that it will likely cost more than estimated to fix. The reality of things is that homes in that city go for $1.5M+ for a good sized one that is turn-key.

There is a reason it’s on the market 100 days. Run away and don’t look back.
Location. Location. Location. You can’t fix that.

[Kolyan2k]

Originally Posted by Alfisti

WHat kind of neighbourhood? As in like guns going off left and right or pleasant enough?

600sq ft 30 mins from Toronto is going to be triple that.

I do hear you on real estate hassle though, I am about to split a small inheritance and when i crunch te numbers on real estate, i dunno, feel like i could invest in the big 5 banks here and make a similar return.

No guns decent neighborhood and one of the better condo complexes on main st, walking distance to supermarket etc. I used to live in that town myself. It's kinda split, downtown is shit with some crime, yet town attracts millionaires too due to good infrastructure. I think it's about 200k. I have 2 condos there, one paid 70k another 120k. My buddy has 10-12 condos here bought some in bad projects for cheap, I thought he was crazy, well now it's paying off nicely. I think he averaged around 80k per condo (with some being 2 bedroom)

[BMW F22]

Need some thoughts here. Looked at a condo in Kihei, Maui recently as investment. At around $700K the below is what I came out with. At 25% vacancy it's about $1,100 profits a month; at 20% vacancy it's a bit more. Worth it? This is assuming 30% down. Less money down means less profits.

[dreamingat30fps]

Originally Posted by BMW F22

Need some thoughts here. Looked at a condo in Kihei, Maui recently as investment. At around $700K the below is what I came out with. At 25% vacancy it's about $1,100 profits a month; at 20% vacancy it's a bit more. Worth it? This is assuming 30% down. Less money down means less profits.

I’m not a realestate investor and frankly don’t know much about investing (I buy boring shit). However a $12k annual return on $700k seems like a horrible investment. I guess you could calculate appreciation on the property maybe, but just based on rent it seems horrible. I mean even investing in some boring stuff and making 5% thats $35k a year.

I’m sure someone who knows what they are talking about can chime in.

EDIT: Just noticed you are borrowing most of the $$. Dunno how the math works out in that case. I guess I like my shit simple.

[BMW F22]

Originally Posted by dreamingat30fps

I’m not a realestate investor and frankly don’t know much about investing (I buy boring shit). However a $12k annual return on $700k seems like a horrible investment. I guess you could calculate appreciation on the property maybe, but just based on rent it seems horrible. I mean even investing in some boring stuff and making 5% thats $35k a year.

I’m sure someone who knows what they are talking about can chime in.

EDIT: Just noticed you are borrowing most of the $$. Dunno how the math works out in that case. I guess I like my shit simple.

Agreed. That does seem low. Feels like if I were to put the same $ in the market, I could make more annually. However, that is a gamble vs real estate. Then again, I would need occupancy rate of 70% to break even.

Edit: I could write off certain expenses for tax but not as much as before. I believe there is a cap now. But that plus the mortgage are essentially money back into the home. Those don’t disappear as expenses.

[Alfisti]

Whenever i see these numbers or do them myself, I cannot help but think, I can make 53% RIGHT FUCKING NOW by just dumping said cash into RRSP. Then even if it is invested conservatively it still grows without a millionth of the headaches and potential expenses of real estate.

And I am a real estate guy, never rented always bought etc.

In regards to prices, my neighbourhood just keeps getting more and more nuts, not much selling under $2m and a few passing $3m. Which is just wild, really is as this is not a blue blood area, i mean it is a good safe area but not a destination suburb so to speak.

[dreamingat30fps]

Originally Posted by BMW F22

Agreed. That does seem low. Feels like if I were to put the same $ in the market, I could make more annually. However, that is a gamble vs real estate. Then again, I would need occupancy rate of 70% to break even.

Edit: I could write off certain expenses for tax but not as much as before. I believe there is a cap now. But that plus the mortgage are essentially money back into the home. Those don’t disappear as expenses.

Depends on what you define as gambling. Throwing $700k at whatever crypto coin Musk is pumping this week is probably gambling. Putting it in low risk mutual funds or some index funds not really gambling in my book. The average return of the market as a whole over the last 30 years is like over 10% I believe.

I mean sure the entire economy could collapse and the dollar becomes worthless and all the companies go out of business… but in that case I don’t think there will be a huge market left for Hawaii vacation rentals.

[chassis]

Originally Posted by BMW F22

Need some thoughts here. Looked at a condo in Kihei, Maui recently as investment. At around $700K the below is what I came out with. At 25% vacancy it's about $1,100 profits a month; at 20% vacancy it's a bit more. Worth it? This is assuming 30% down. Less money down means less profits.

What vacancy rate is typical? Do you have legitimate accurate market data for vacancy? Or are you guessing?

[BMW F22]

Originally Posted by chassis

What vacancy rate is typical? Do you have legitimate accurate market data for vacancy? Or are you guessing?

Agent who was a former property manager for 30-50 properties and a ton of experience said 20% vacancy is typical. Dec - April we get 60% of revenue and the rest of the year makes up the other 40%. There are slow periods in which owners should occupy their units. Of course some units/location are more popular so give or take a bit. The unit I am looking at is a block or two from the airbnb we stayed at recently. That was a few minute walk from the beach (across the street). That one rented for $280 a night after all the airbnb fees.

[chassis]

IMO a good business plan still looks good with conservative assumptions. In this example, if the deal is attractive at 30%-35% vacancy, it might be a good deal.

[BMW F22]

Originally Posted by chassis

IMO a good business plan still looks good with conservative assumptions. In this example, if the deal is attractive at 30%-35% vacancy, it might be a good deal.

At 30% vacancy I break even. At 35% I have negative cash flow.