For Rent > For Sale in SV

Sunnyvale
271 homes for rent vs 150 homes for sale
sfdragonboy’s 3/2, 107 homes for rent vs 39 homes for sale

Mountain View
211 homes for rent vs 64 homes for sale
sfdragonboy’s 3/2, 49 homes for rent vs 23 homes for sale

Cupertino
119 homes for rent vs 48 homes for sale
sfdragonboy’s 3/2, 53 homes for rent vs 32 homes for sale

Too many landlords. Landlords suck. Overpaid for houses, rent for peanuts.

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Where else are they going to keep their money? People are too afraid to invest in stocks. So they put all their money into real estate.

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Too many BAGBs around.

BAGBs = Bay Area Good Boys :grin:

Kudos to hanera for sharing this interesting statistics !

My guess is these Landlords would have purchased homes Pre-2011 and holding it as they have got low mortgages and nice cash flow/rent making it positive cash flow. For example, my overall returns are appx between 10% and 12.5% while mortgages are less than 4%. The returns are more than stocks and home investment simply 3x or 4x leveraged with mortgages. By holding, they get decent returns and rewarding appreciation. Why do the need to sell?

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Not that I am looking in those areas, but no wonder I can’t find anything up in these parts (probably same reason). Bunch of hoarders!!!

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Those who purchased the home pre-2008 used to have 5.5% or 7% range. All of them would have refinanced with lowest mortgage rates, rented the home for positive cash flow.

Now, 2011 or thereafter, they are all witnessing crazy spikes in price. Who wants To kill the Goose That Laid the Golden Eggs !

Blame it on FED, Historic Low mortgage rate and QE lending !

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These guys are holding the rent down since they don’t need to push rent up to achieve a reasonable cap rate and cash flow. At the same time, they cause inventory to be low and hence high purchase price making it hard for Johnny come late like me to buy a rental property, unless I want to take the risk of negative cashflows for many years.

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Since you are speaking as landlord, you feel rent is down ! Ask those who are tenants, they know/feel the pain of rent.

Bay Area cap rate is less and the main reason is high purchase price!

Even during 2008-2011, bay area prices are almost 3x-4x of average america home prices.

Scenario 2017:

  • The median home value in the United States is $200,700
  • The median price paid for a Bay Area home hit $755,000 in May, a third consecutive monthly record.
  • In San Francisco and San Mateo counties, the median price reached an identical $1,207,500

Today, they are very high 3x-5x. Cap rate is low by the current prices.

Second, rent is decided by market, mostly by big apartments & vacancies, but not by individual home owners.

If you increase $200/month, people will be moving to apartments.

Would you buy SFH for $2.18 mil and rent out for $5000/ month like owner of 10176 Bret Ave in today market?

Will landlords being pushed out of the buyer pool cause prices to cool, or does this mean rents are due for another bump?

For rental home, high cash flow is important, with minimum appreciation like many others prefer. SFH is not for rental home unless you like SFH and have sufficient cash to hold it.

Having said that most of the higher cost homes, 1 M or above, are out of question for rental homes.

Go for low cost Condos or Multiplexes.

For rentals, You can buy this better than bret

https://www.redfin.com/CA/San-Jose/1225-Weyburn-Ln-95129/home/1684324

On paper it is a bad move. So expensive of a house for so little rent. But looks like buyers just need some place to park their money. It was an all cash deal. So, the $5000/month will cover the property tax and all maintenence essentials.

Bought in March, waited for 6 months and now for rent? Are they looking for the second tenant?

You can rent this house for $5k. Then buy 5 houses in Antioch and rent them for $15k total

Cash deal means nothing, many buyers obtain financing after purchasing. Cash bid is just a trick to grab the house for sellers who are worried about buyers backing out. If it is in 2010-2013, good play, question is whether it is still good reward/risk today.

First they need to have 2M cash, then only financing after purchasing. If they do not have proof of payment, they are rejected first.

Can use heloc against you house and stocks. Citi and HSBC offer me this and explain how it works, didn’t take it up.

They purchased in March and have not done a cash out since that time. It’s been 6 months. So it is a legitimate all cash offer. Buyers just have too much money and need to store them somewhere.

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Definitely no bump in rent, too many rentals on the market. My WAG is people is more comfortable with RE than stocks. I suspect buyer sold his/her ESPPs/RSUs and bought the house because he/she is not comfortable holding that much stock. As far as he/she is concerned, in a doldrums, house holds its value better than stocks even if there are FANG and BAT, notice they peak in Jul, except AAPL and FB.

You can find out?

Yes, you need to search the public records. All refinance activities are registered with the county.