Thread 509244427

How are people maintaining investment properties?

Based on how much I am paying in rent now, its $2400/month, but to take a mortgage out on this place and buy it, it would be like a $6500/month mortgage.

This place is also a new build so it was purchased recently, so the numbers aren't adding up.

Is the owner really taking $2000 - $4000/month loss on this, while getting some kind of tax break on his main source of income or something? If so, that still seems like a shitty deal, he'd be better off just buying Bitcoin or Stocks, no?

>>509244427 (OP)
You pay more in a month in rent than I make it in 2 months.

>>509244580
It's equiv to $1578 USD/month

the rich have their trix
and no they do not need positive cash flow

>>509244427 (OP)
my landlord is trying to get me to "collab" on an investment property so i think the market is absolutely awful

>>509244427 (OP)
idk but if your tax system is like ours maybe he has a portfolio of properties and is willing to take a loss on this one if he has other profitable ones and will pay less tax overall this way or because he thinks long term appreciation will materialize on it.

>>509244427 (OP)
>Is the owner really taking $2000 - $4000/month loss on this, while getting some kind of tax break on his main source of income or something
With real estate, you make the money when you buy/sell.
You also don't know when he bought, do you? Could have been 2020 or so at the bottom of the interest rate market.
He might also own the property outright, such that his only expenses are maintenance and taxes.
But you do correctly highlight two huge problems:
>The existence of long-term mortgages drives up property prices by artificially reducing monthly payments
>When there is no loan involved, a landlord doesn't have a mortgage to compare rent revenue against and thus is much more likely to provide a renter with a reasonable rate.
If we stopped tolerating usury the lives of everyone except the usurers would improve overnight.

>>509245613
I said its a new build, 2025

>>509244427 (OP)
>a new build
Which means the rents are intentionally lower to attract renters.
Also, yes, it's normal to make a loss in the first 3-5 years as the owner repays debts. The idea is to gradually move towards making a profit by slowly raising rents.

>>509244427 (OP)
your mortgage is that high because you only put down 5 or 10%
that's 20x leverage
investors are looking for 3-5x leverage, resulting in a lower principal and a lower rate (because more of the loan is secured by the property value).
after 5 years is becomes a non-issue, for one thing rents have gone up, but the property value has also gone up. for example instead of $800k loan on a $1m property (5x leveraged) he now has a $600k loan on a $1.2m property (2x leveraged).

>>509244427 (OP)
>$4000/month loss
He's not exactly sending the money into space is he? He's getting a property out of it at the end where you will have paid 33% of it.

>>509245224
Yea thats the equivalent of your barber telling you about the hottest new shitcoin SELL SELL SELL

>>509247032
Im waiting until my crypto is in the 8 figures before I buy a house in cash.

Im leaving this place after the 12 month contract ends anyway. I dont really like it.

>>509244427 (OP)
I pay 700 a year property tax for 5 acres of land is how

>>509244427 (OP)
It the owner Australian or some kind of chink? Chinks getting money out of China will often buy in cash, they aren’t so much after appreciation as they are after parking wealth into something that won’t go to zero.
In that case the cash flow is just a nice little bonus, since many of them are also willing to just let property sit empty.
It’s also possible he earring the difference for some reason, that tends to happen near a top when people think they can get a bit more from appreciation.
Also, don’t you guys have some kind of mandatory national fund that people have to withdraw from at a certain age? Maybe he bought using that.

>>509244860
>the rich have their trix
They sure do.
Wait until the average person finds out the extra x dollars they pay for something since a few years ago as the price rose is to inflation and a direct wealth transfer to rich (((people))) who are leveraging their assets to buy more assets, and that they're actually slaves.

>>509244427 (OP)
i'm not sure how math works in cuntland, but none of that seems to make much sense

>>509244427 (OP)
It's entirely possible their mortgages are years old and at a lower rate and principal.

>>509244427 (OP)
You're supposed to have a preexisting mortgage you refinanced at low interest rates and ride out the high interest periods.

>>509244427 (OP)
>he'd be better off just buying Bitcoin or Stocks, no?
my understanding of the situation is that this is correct as of now, it is now roughly 40% more expensive to own than rent,
cf: Bordenaro, Youtube