Rental market is heating up

Prices had went up too high for the rent. Now prices are correcting the overvaluation, hence decline. Meanwhile, rent has increased to compensate. Is why I feel prices had stabilized. For Cupertino, normal yield is 3-4%, dropped to 2% for awhile, now I think is moving back to 3-4%.

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We see this as more and more renters may prefer to raise a family or live in a single-family home versus an apartment complex or community or building.

Once has children, many prefer SFHs :grinning:

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They may like :avocado: more than :baby:

Demand is growing, according to Finch, because while the huge millennial generation is aging into marriage and parenthood, not all of them want nor can they afford to buy a home.

“Many of them are choosing to rent in huge numbers largely due to the flexibility of renting,” said Finch, who believes the same of baby boomers. “They’re moving into smaller homes where they can have a lock-and-leave mentality. They’re tired of homeownership.

In Austin, I’m renting to millennials :slight_smile: One person staying in a 1600 sqft house, a DINK staying in a 3000 sqft house. Luxurious living.

Does really mean anything? I bet their average home sizes are much bigger than SF. So their 1600 can be comparable to our 800 or 1000.

I said in previous post, luxurious living. For the 1600, can rent a 800 sqft apt for less $. For the 3000, can rent a 1-story 1800-2000 for less.

that basically tells you the most efficient thing for people interested in RE for cashflow to buy smaller properties (1 br and 2 br) - either condos with low HOA or MFH. That gives you the sweet spot in terms of rent vs maintenance. Buying SFH to rent is basically a bet on an appreciation game since maintenance costs go up with larger size (and in a non-linear fashion).

OTOH, for a tenant you get more bang for the buck as you go bigger.

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Do you want to invest in bonds, dividend paying stocks or growth stocks?

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Great analogy. Unfortunately the average person that gets in RE is not sufficiently astute. They think they are going to be getting a growth stock that pays a great dividend as well.

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How about a growth stock early on that becomes a dividend stock later in life? Microsoft in the 80s and 90s grew like a weed and then just became dividend stock in the 00s. Now it’s a growth stock once again.

Need some RE that works like that. :smile:

That is what happened to rentals bought in the 2009-2012 time frame. They probably didn’t cash flow at first, but they’ve had huge appreciation. Now they should be generating nice cash flow, but appreciation has slowed down.

Inflation should eventually turn anything with a 30-year fixed mortgage into a cash flow positive property. The question is how long will it take.

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Behaving like Singapore. At one time, Singaporeans think a real house is a landed property (akin to SFHs and duplexes). Now everybody buy condos and apartments… different definition from USA. Condos - full facility. Apartment - very limited to no facility.

Some1 posted a chart long ago, is cheaper to rent than own in SFBA. Elsewhere including NY, cheaper to buy.

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Buy SFHs! Not MFHs!

Old news. But in Texas there used to be 25 cap mutli family. I doubt the returns in sfhs is anywhere near that. Trailer parks are even better. I have friend who nets $4m a year with just 4 trailer parks. 3 near Monterey and one in Arizona.

How do you go about managing trailer parks? Give free rent to one of the tenants and have them manage the rest?

I posted an article a while back about a Stanford grad who made it big on trailer parks. But he steered clear of California. Looks like the regulatory environment of CA is not that friendly to trailer park owners.

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