12th January 2010

Why Condominiums Are A Bad Rental Investment

Last month, while having lunch with an old friend, we had a discussion about the merits of buying condo units as a real estate rental investment. Having been a condo owner in the past, I can positively say that I will never do that again.

This subject could easily fill a book, so here are my reasons in bullet-point form:

  • Too many complaints from neighbors. Tenants usually only sign a year lease so if they annoy their neighbors, they can simply move. The neighbors then transfer their frustration and annoyance to the landlord.
  • Condo Associations. If you like to invest by committee, condos are for you. Don’t want to afford that fat assessment to resurface the parking lot right now? Too bad. Pay up.
  • Condo Commandos. These people are usually retired and have nothing to do all day. Nothing, except get all up in your business that is. They feel that you as a landlord are devaluing their property by renting your unit and they won’t let you forget it. Read the rest of this entry »

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18th October 2009

Why Banks Aren’t Foreclosing on Schedule

In the past, when a person stopped making payments on their home, it generally took 3 months before they were foreclosed upon by the bank and evicted from the property.big bank building

These days, as any real estate agent will tell you, it could take the better part of a year for the process to come to a close. In the past I have made posts detailing some of the completely unprofessional behavior exhibited by the banks during the “short sale” process.

For the uninitiated, a “short sale” is when the bank agrees to discount the loan amount due on a property usually due to some financial hardship on the part of the borrower. Whereas, a foreclosure is when the bank takes possession of a property and evicts the previous owner with the intention of selling it at market price to re-coup its losses. Read the rest of this entry »

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11th January 2009

The Economy’s Effect On Rental Property

First off I’d like to wish everyone a Happy New Year for 2009. May it be the economic turnaround year that we’re all looking out for.

So the other day as I was preparing the spreadsheet I use to track income and expenses for my rental properties in 2009. After finishing that task, I had a chance to look back at the spreadsheet for 2008 and noticed a few things.

  • The constant expenses incurred by the properties (property tax & insurance) are lower than they were last year. This is a good thing since rents are ridiculously low due to the downward pressure exerted by a glut of housing units available for rent. Read the rest of this entry »

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9th December 2008

Sage Advice From An Ex-Landlord

When I was about to start buying property some years ago I met a guy through a friend-of-a-friend who is an ex-landlord and is currently an attorney based in West Palm Beach, Florida. This guy used to own about 25 single-family units in Oklahoma City, OK back in the mid 1970s.

Apparently the reason he started buying all these properties was that back in 1973 our “good friends” at OPEC decided to basically stop supplying oil to the United States and other countries who supported Israel during the Yom Kippur War

Apparently, the ensuing oil crisis caused the United States and other western countries to seek other oil supplies as a way to blunt the effects of another potential shock to oil prices.  This included drilling domestically which made Oklahoma City a good place to be at the time.

A huge influx of people descended on Oklahoma City looking for well paying yet unskilled jobs in the oil industry. From what this guy said, there was such a shortage of housing that people were living in tents just to be close-by to these jobs.

As a result, the landlord business was the business to be in at that time. After 1980, oil prices declined for 6 years due to a glut of oil on the world market. Over-production and weakening demand were the main reasons for this situation. Read the rest of this entry »

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21st September 2008

Tough Times All Over

Recently I went to the IZEAFest blogger conference which was held in downtown Orlando. I probably shouldn’t have been, but was surprised at the number of “Space Available” signs on what seemed like ALL the high-rise office buildings in the downtown area. I mean, I know times are tough but you would think that the tenants looking to rent in these building would be a little more averse to the recent ups-and-downs in the economy.

Also interesting is the occupancy of the large national banks in these buildings. My hotel room faced a building having at least 40 floors with the name Wachovia emblazoned across the top. If banks are failing left and right, how can they afford to occupy enough of a 40-story building to have their name on it?

I know that Orlando is a major city in Florida and the big banks feel the need to have a presence and all major city centers but business is business. According to the Orlando Business Journal , “Wachovia posts $8.9 billion loss, will cut 10,7500 jobs.” I guess it’s better for the company’s bottom-line to cut jobs than relinquish real estate in a major city center.

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