waiting? I am counting on it!
BWAHAHAHAHHAHAHAHAHAHA (evil capitalist laugh)
bflr = bump for later reading
We've been seeing some of the effects from uneducated speculators around here recently, and the effects are quite funny (probably not for the speculators, but certainly for the locals). Some bigwig investor from the bay area or LA will buy a house for $500,000 unseen and turn it over to a property management company to rent out for $2,000+ a month. Since the average wage around here is still below $40k, the house will sit empty and unoccupied for months (in one case a block from my home, more than a year because they're demanding $2,600 a month and the AVERAGE around here is $1,200). By the time they do flip their houses, they've typically lost a substantial portion of their profits to both mortgage payments and home devaluation caused by long term neglect.
For the people that actually live here, we may shake our heads and laugh at these idiots, but these homes can become problematic. They often get trashed by criminals, they become hangouts for neighborhood kids, they're occupied by the homeless and druggies, and the meth labs LOVE them. The property management firms don't usually do anything more than mow the lawn every month or so, and replace broken windows that face the street (non street facing windows get boarded over).
I've seen stunning 4000 sf suburban minimansions reduced to something out of an inner city slum because an investor putchased it without looking at the rental market and the house became derelict. I know of several other investors who've lost their homes to fire and vandalism. An empty house attracts criminals.
I've been saying it for years, The Economist has done quantitative analyses of it, but this is a lovely calculator that makes it simple to wrap your head around. In many areas, renting is a superior investment to buying in terms of net worth due to a very soft rental market and very tight buying market.
Even accounting for write-offs and appreciation, renting and investing the money saved is a superior investment strategy in many, many markets.
save for later
save for later