My uncle recently bought a fourplex, using some inheritance money as a down payment. He’s a realtor, and this is his first foray into investment property. I saw him last weekend, and was excited to see how things were going. But my innocent (and excited) “How’s the fourplex doing?” was met with a good deal of defnesiveness… So, not so great, I take it?
Well, in the process of waiting-and-seeing about the duplex next door, it looks like someone else has swooped in and bought it. Not exactly swooped, because I wasn’t sure how badly I wanted it anyway. The new owners are a husband and wife with two dogs, who plan to owner-occupy the upper floor, and rent out the lower unit. They seem to have grand plans for renovation, too — they’ve cut down most of the scrub trees from the backyard, put up planters in the front, and have some lumber sitting out behind the house…
After the whole subprime mortgage catastrophe, credit card issuers are worried too, and have startedslashing credit limits at the first sign of trouble (a single late payment, for example). The ratio of credit used vs. credit available is used in calculating people’s credit scores, so this may have a negative effect on many people’s scores. That, and if you don’t notice that your available credit is lowered, it could be pretty easy to accidentally go over it. Also not good.
Not that long ago, when mortgage rates were commonly 10% or higher, ARMs were looked upon as a more favorable type of mortgage. (At that point, if the ARM was going to adjust, it was going to go lower, not higher, so adjusting was a good thing.) Historically, unless you were locking in during a time of extremely low interest rates (like now), an ARM would be your best bet over time. Sounds crazy now, what with all of the subprime mortgage fallout, but its true.
A few days ago I used several online calculators to get estimates of the value of my house. Most were simple online calculators, but one, from HouseValues.com, arrived in my inbox, sent by an actual human being — a realtor to be exact. He sent three comparables — recent sales in my neighborhood, all of which were priced $10,000 to $20,000 below what I paid for my house a few years ago, and an estimated range of $219,900 to $234,900.
Four years ago, I bought my house for $230,000. A year later, it was appraised for about $280,000. So this was unhappy news, even though I saw it coming.
I’ve been using zillow.com to watch the value of my home slowly decline over the past couple of years… luckily, since I’ve been paying down the principal on my 30-year fixed mortgage as well as my home equity line of credit, I haven’t seen my “zestimate” (Zillow’s home value estimate) dip below what I owe. It’s come down by about $60,000, though, from what my appraisal was when I refinanced a few years ago. Such is the current housing market.
For comparison’s sake, lets see how my home value stacks up on a few different (free) sites
It wasn’t long ago that it was the landlords offering incentives. With the housing market as soft as it is, renting has been looking more attractive every day. Where I am, landlords have stopped offering (as many) incentives, and rents have edged up, while vacancy rates have gone down. While a few years ago, everyone I knew was in a mad dash to become homeowners, the situation is now the reverse.
For the fearless investor who’s on a very (very) long-term schedule, it seems that there’s a big opportunity out there just waiting to be snapped up… If you search for homes for sale in Detroit, Michigan, you’ll find that there are 22,387 homes for sale right now, and if you search for Detroit homes for sales between $0 and $20,000, you’ll find that there are 3,431 homes for sale in that price range!
I was talking with some friends last night about how the government is bailing out people who “bought way more house than they could afford” on an adjustable rate mortgage. At first we were all united against it — after all, we were all responsible homeowners, watching our budgets, paying our bills on time. We were all on 30-year fixed mortgages in modest houses that we can afford. Why should these people get extra aid that we don’t? Where’s our reward for being responsible? If the government is handing out money, shouldn’t we get some too?
After all of my speculative talk about buying the duplex next door, four months later, it’s still for sale. Still vacant, too. AND, when I came home from work today, its front door was adorned with a lovely blaze-orange sign notifying the would-be residents that the water will be shut off soon. No buyers in sight, AND, the owner apparently isn’t paying his bills, either. (How much could the water bill really be in a vacant house?)
Am I a mean landlady for (politely) hassling (reminding) people for rent when it’s a day late?
On the one hand, they do have roughly 30 days ahead of the 1st on which they could pay me early… they don’t have to wait until exactly 11pm on the 1st to give me their check, if it’s difficult for them to remember…
Annie spencer will be moving to my very specific (yet undisclosed) city/state! She saw my nonexistent for-rent ad! Sounds like it must be for one of those scam deals where they send you a big deposit on the apartment, then ask you to wire a portion of it back (because some emergency takes place), and then only after you’ve done that do you discover that their original check was fraudulent…
I have a complex and relatively unhealthy relationship with plumbing. I understand most of the basic concepts of plumbing, and have successfully replaced “modern” plumbing fixtures myself, however, my house is 107 years old, and when pipes and fittings are that old, that corroded, and haven’t moved in a hundred or so years, they get a little more difficult to deal with. Often, I simply don’t have the physical strength to get the old pieces off. I’ve learned that its best for my mental health to simply hire a plumber…
So, given that, whenever receiving an email from my tenants having anything to do with water, panic sets in (plumbers can be expensive, especially in an old house.) Tonight I received one with the foreboding subject line “water troubles.”
In this video, from the website “Funny or Die,” Will Ferrell has an altercation with his (very short) landlord, Pearl. He’s late on the rent, and she’s threatening to evict him…
OK, so based on the title of this site, you can guess that I’m in the pro-duplex camp. I already bought one, so if anyone tells me it’s a poor investment, I’m not likely to want to hear what they have to say. I ran across an article today, however, that points out that the duplex is a unique (and relatively scarce) investment and place to live..
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