Huh? I'm sorry, not sure what you are getting at. Let me say this again, here in Chicago most properties are cash flow negative. Some by a lot. Sure they could ask for higher rent, but they won't get it. Do you have any idea how many empty high rises we have here?
OK. I'm still trying to figure out if you agree with what I'm saying. Real estate is like any other asset. Anyone who is long AAPL wants to sell it for more then what they paid for it. But the market doesn't always oblige. The problem you have in TX is supply. F*cking land out the wazoo and it goes for miles. Rents are super cheap there. Real estate barely upticks. Just as in trading, there is no free lunch. There are usually variables in each location that hinder the path to profitability.
Mav... I understand that just because a person buys a property then rents it, that doesn't necessarily mean he is currently making a profit.
High end properties all over the place are renting for FAR LESS than mortgage upkeep, maintenance fees, etc. There is a long way to go down before rents start supporting underlying values in the areas I am familiar with.
moved from Boston to Houston and overnight I realized that I am 6 times richer Everything is so cheap especially labor,
Tx has a pretty stable return on rents. 10 to 12% is average. Property taxes should not be more than ~ 3 %. But throw in repairs/ maintenance, property insurance and any mortage payment and you end up with very little return.
Tx has a pretty stable return on rents. 10 to 12% is average. Property taxes should not be more than ~ 3 %. -------------------------------------------------------------------------------- Keep in mind, that Texas is starting to feel the Depression. It took a few years for the wave to hit but it is hitting. Property Taxes are more than likely to go up in the next few years. Not sure what the return on rent is % wise. Home prices are falling in many areas due to the "Over building" that continues in Texas. So, while I think its the best place to ride out the fall of America, It does have some faults.
I disagree. I am a former homebuilder and still have a lot of ties to the industry. TX never saw the mania that existed out west and east in terms of a real estate bubble therefore it did not correct like these places did. Even in the bubble years, we did not see very much price appreciation. It has weathered the downturn far better because of this reason. This is strictly residential though, commercial may be a different story.