Earlier this year I picked up this Nolo book of leases and rental agreements. It's created without a single state in mind but it has some great advice and some useful tear-out forms ready for photocopying. The book I bought, which looks a little different than this one (older edition?) also had a CD-ROM with printable forms.
Mike2
· 1 year ago
Well, as long as your keeping the condo occupied and receiving rent, you're doing fairly well.
Were you able to raise the rent at all between tenants? I remember you mentioning that the initial rental rate wasn't covering the ownership costs.
mattgoyer
· 1 year ago
Occupancy hasn't been a problem. As for losses, I still lose a small amount of money on it. Though I only put 5% down on the place.
Mike2
· 1 year ago
What's the strategy then?
Peckham
· 1 year ago
"Whats the strategy then?"
Lose money until the market stabilizes at a new bottom in 2012, then sell at some imagined break-even point. He'll use the "profits" to buy an entertainment center. He could have made a killing at Wamu, but he hates CDs, except for the kind you can pop into his car stereo. ;)
jcricket
· 1 year ago
Example #1000 in why I don't blog about personal stuff. No matter what the topic, it inspires the "haters" to come out and "gloat".
But I do love the financial certainty of the bubble bloggers/commentators. They're probably as savvy as most yahoo financial message board shills.
mattgoyer
· 1 year ago
@Peckham, I couldn't have said it better!
Peckhammer
· 1 year ago
See, at least Matt has a sense of humor. I credit Matt for being open about his rental property situation, and for understanding the difference between humor/sarcasm and gloating.
Mike2
· 1 year ago
I'm asking honestly, as I'm considering buying a place that doesn't quite break even as a rental to live in for the next 2 years.
Part of me is saying "hey, it's only a few hundred bucks a month extra" - and the other part is saying this might not look as good 2 years from now when prices are lower and rents have stayed flat or dropped.
In my area, the $2K+/month rental market looks really weak. If prices drop the way they have this year, there's little compelling people to pay over $2K/month to rent. Unless they can't buy - which doesn't bode well for prices.
mattgoyer
· 1 year ago
Sorry, I didn't know where you were coming from with the question. Now that I do...
Yes, I currently lose a few hundred a month. And yes, it's a gamble; the unit could lose value and the higher end rental market could collapse.
So the first point, when I looked at comps recently they showed it has appreciated so it would need to first lose the appreciation before cutting into my equity. I'm also of the opinion that prices for good units under $500,000 will be stable over the coming years (this assumption could prove to be very false, I do get nervous when thinking about what is happening in Southern California.)
On the second point, my take is that right now there are almost no "nice"/high end places for rent on Capitol Hill. If you're in the $2k+/month club for housing the pickings are very slim and whatever comes on the market is generally rented fairly quickly (counter example, it took 5 months for a unit at Portofino to rent, but when it did there was a bidding war.) But look at Trace, there are a number of people willing to pay $2k to $3k to $4k for a rental even though they could likely afford to be (I'd be curious to poll them and ask why they're renting instead of buying.)
Would I advise someone to buy to do what you're proposing? Maybe. It'd depend on the quality of the unit and it's location and what else is happening in that market. If there's a lot of high end rentals, then likely not. If there isn't a lot of high end rentals but it's a neighborhood that yuppies want to live in like Capitol Hill, then it might make sense. And of course do whatever you can to get your monthly costs down (put more money down) and understand the true cost of renting (move in/out fees, repairs, and the cost of a pro-longed vacancy.)
It's also worth pointing out I have a higher tolerance for risk than most folks. I'm also not an American so if things go completely down the toilet then I'm out of here! :)
All Comments
Were you able to raise the rent at all between tenants? I remember you mentioning that the initial rental rate wasn't covering the ownership costs.
Lose money until the market stabilizes at a new bottom in 2012, then sell at some imagined break-even point. He'll use the "profits" to buy an entertainment center. He could have made a killing at Wamu, but he hates CDs, except for the kind you can pop into his car stereo. ;)
But I do love the financial certainty of the bubble bloggers/commentators. They're probably as savvy as most yahoo financial message board shills.
Part of me is saying "hey, it's only a few hundred bucks a month extra" - and the other part is saying this might not look as good 2 years from now when prices are lower and rents have stayed flat or dropped.
In my area, the $2K+/month rental market looks really weak. If prices drop the way they have this year, there's little compelling people to pay over $2K/month to rent. Unless they can't buy - which doesn't bode well for prices.
Yes, I currently lose a few hundred a month. And yes, it's a gamble; the unit could lose value and the higher end rental market could collapse.
So the first point, when I looked at comps recently they showed it has appreciated so it would need to first lose the appreciation before cutting into my equity. I'm also of the opinion that prices for good units under $500,000 will be stable over the coming years (this assumption could prove to be very false, I do get nervous when thinking about what is happening in Southern California.)
On the second point, my take is that right now there are almost no "nice"/high end places for rent on Capitol Hill. If you're in the $2k+/month club for housing the pickings are very slim and whatever comes on the market is generally rented fairly quickly (counter example, it took 5 months for a unit at Portofino to rent, but when it did there was a bidding war.) But look at Trace, there are a number of people willing to pay $2k to $3k to $4k for a rental even though they could likely afford to be (I'd be curious to poll them and ask why they're renting instead of buying.)
Would I advise someone to buy to do what you're proposing? Maybe. It'd depend on the quality of the unit and it's location and what else is happening in that market. If there's a lot of high end rentals, then likely not. If there isn't a lot of high end rentals but it's a neighborhood that yuppies want to live in like Capitol Hill, then it might make sense. And of course do whatever you can to get your monthly costs down (put more money down) and understand the true cost of renting (move in/out fees, repairs, and the cost of a pro-longed vacancy.)
It's also worth pointing out I have a higher tolerance for risk than most folks. I'm also not an American so if things go completely down the toilet then I'm out of here! :)