It appears you most certainly did make money as a landlord. Correct me if I’m wrong:
With the numbers you provided it appears you’re almost $100k into the mortgage, a ROI of 5.75% - that’s assuming you made no profit from rent, just breaking even. A $100/month profit takes that to 6% ROI.
That’s not including the appreciation, which I’m sure is significant. In the Seattle area for that time span it’s a ~90% increase for the median home. Even half of that isn’t too bad, where else are you getting that kind of investment with 25% down?
In past tense for sure you can make money: Upfront cash invested $168,000 Down $30,000 repairs and upgrades - Took about 6 months (numbers taken would have done it in a weekend) Signed my first lease in October of 2013 for $5400 all the down payment was from a 2nd on my primary that is now down to $65,000 - This is where it gets convoluted because I haven't been paying down that second all the time. Some of the time I was dumping the money into fixing up other properties so it is tough nail down a true rate of return but it was good.
That is the cautionary part> Where I screwed up is I got greedy. I told the tenants: Hey look, you decide who you live with and it worked for me in the sense that this will be the first month that I won't get rent. I would sign a new lease every six months with some new people but most of the same people. Eventually everyone had cycled out and I have a group of people that I havent vetted at all. In hindsight a very bone headed move by me.
Looking at selling is what is making me wonder if you can still make money landlording. At the prices today I am almost exclusively shaking my head no. There is also an emotional element to it. I doubt I am the only one that burns at feeling like I am being taken advantage of. I will take a listen to the self storage pod. Thank you for the link.
greenblood - This would have to go on for years for the one bad group to take all my chips off the table.
and bleached anus is right about people making money that bought a long time ago on equity appreciation but mobile home parks and self storage seem like you are setting yourself up to be dealing with the same poor smucks like the guy in the article.
Self storage seems pretty straight forward and while you’re dealing with shit bags like the guy in the article, there isn’t an eviction moratorium for storage units, rent is fairly low so you’re not dying over even a couple deadbeats, and when they finally lose the unit, auction the shit off to the freaks you see on those auction reality shows.
Self-storage you can boot people easy. The thing about mobile home parks and self storage is that you have very limited maintenance expenses, almost no worry about wear and tear and damages - most parks you are just renting the dirt.
Did you listen to the BP episode with the guy whose been killing it with self storage?
That made me very curious about that kind of property.
No, haven't heard that, but I know several landlords who are selling their properties in King County and shifting their business model to self-storage.
If you’re thinking self storage, it’s a good pod to listen to. The guy said something like 80% of all multi family buildings are owned by major corporations but 80% of self storage are still mom & pops type businesses.
Man I bet a fella could crush it in the self storage game down here in White Wakanda. Lots of 3 bed / 2 bath homes which are less than 2000 sq ft, but everyone has a shit ton of gear- i.e., bikes, skis, SUPs, kayaks, 2 sets of tires for each car, etc, etc.
It appears you most certainly did make money as a landlord. Correct me if I’m wrong:
With the numbers you provided it appears you’re almost $100k into the mortgage, a ROI of 5.75% - that’s assuming you made no profit from rent, just breaking even. A $100/month profit takes that to 6% ROI.
That’s not including the appreciation, which I’m sure is significant. In the Seattle area for that time span it’s a ~90% increase for the median home. Even half of that isn’t too bad, where else are you getting that kind of investment with 25% down?
$100/mo "profit" doesn't even cover maintenance. Also, property taxes continue to increase, etc. The biggest factor is how long ago did you buy the property. Otherwise, a lot of landlords are making money on appreciation when selling (btw we now have a capital gains tax which probably gets expanded in the future).
At one point Biden’s campaign website had a piece about doing away with 1031 exchanges. Is that what you’re referencing with the capital gains tax?
It appears you most certainly did make money as a landlord. Correct me if I’m wrong:
With the numbers you provided it appears you’re almost $100k into the mortgage, a ROI of 5.75% - that’s assuming you made no profit from rent, just breaking even. A $100/month profit takes that to 6% ROI.
That’s not including the appreciation, which I’m sure is significant. In the Seattle area for that time span it’s a ~90% increase for the median home. Even half of that isn’t too bad, where else are you getting that kind of investment with 25% down?
$100/mo "profit" doesn't even cover maintenance. Also, property taxes continue to increase, etc. The biggest factor is how long ago did you buy the property. Otherwise, a lot of landlords are making money on appreciation when selling (btw we now have a capital gains tax which probably gets expanded in the future).
It appears you most certainly did make money as a landlord. Correct me if I’m wrong:
With the numbers you provided it appears you’re almost $100k into the mortgage, a ROI of 5.75% - that’s assuming you made no profit from rent, just breaking even. A $100/month profit takes that to 6% ROI.
That’s not including the appreciation, which I’m sure is significant. In the Seattle area for that time span it’s a ~90% increase for the median home. Even half of that isn’t too bad, where else are you getting that kind of investment with 25% down?
In past tense for sure you can make money
I doubt I am the only one that burns at feeling like I am being taken advantage of
I understand where you’re coming from.
I was just pointing out that even considering the recent developments with rent moratoriums and your own invested labor you’re still coming out with a healthy profit. The current climate is not good for those landlords who depend on rent as monthly income, but the rapid real estate appreciation combined with inflation that helps the borrower is also a good climate - is it not?
I have skin in the game, but thankfully not residential. The cell phone tower pays its bills, almost a perfect tenant. My potential future FIL however really got it, commercial properties where the tenants made no money for a long time as they couldn’t be open. He got some funds earlier from a private organization that gave some tenants a grant for BIPOC owned businesses. Just recently some state money rolled in that the Feds funneled in.
He still made money based on appreciation. Although the cash flow wasn’t there. People tend to make the mistake of thinking of property like they do a vending machine.
It really does suck to know that there are plenty of unethical tenants taking advantage of the situation. That’s human nature. There are unscrupulous landlords as well, although in my experience it’s mostly the tenants who wrong their LL. It just sucks more when you’re on the the receiving end.
My original reply had some anecdotes from my land-lording experiences. From the time I could drive my dad had me go collect past due rent, fix things or call the appropriate people to do so, etc. My most memorable was authorizing thousands in repairs to the plumbing because the single mother who lived there had one of her too many children flush happy meal toys down the toilet like a future sociopath. She denied it was them, although the toys were promotional for movies that had recently been released, and the previous tenant was an old man who also died several years prior, making him an unlikely suspect.
For the future, there’s going to be money in it. Pandemic lost income affidavits aren’t going to exist forever and people need shelter. The mom and pops need to be smart, over extend yourself and you could wind up in trouble. That’s true for any business, any investment.
It appears you most certainly did make money as a landlord. Correct me if I’m wrong:
With the numbers you provided it appears you’re almost $100k into the mortgage, a ROI of 5.75% - that’s assuming you made no profit from rent, just breaking even. A $100/month profit takes that to 6% ROI.
That’s not including the appreciation, which I’m sure is significant. In the Seattle area for that time span it’s a ~90% increase for the median home. Even half of that isn’t too bad, where else are you getting that kind of investment with 25% down?
$100/mo "profit" doesn't even cover maintenance. Also, property taxes continue to increase, etc. The biggest factor is how long ago did you buy the property. Otherwise, a lot of landlords are making money on appreciation when selling (btw we now have a capital gains tax which probably gets expanded in the future).
At one point Biden’s campaign website had a piece about doing away with 1031 exchanges. Is that what you’re referencing with the capital gains tax?
No, WA State legislature enacted a 7% cap gains tax. 1031-exchange is a way to defer taxes in to a new property. But yeah, Biden wants to do away with that.
It appears you most certainly did make money as a landlord. Correct me if I’m wrong:
With the numbers you provided it appears you’re almost $100k into the mortgage, a ROI of 5.75% - that’s assuming you made no profit from rent, just breaking even. A $100/month profit takes that to 6% ROI.
That’s not including the appreciation, which I’m sure is significant. In the Seattle area for that time span it’s a ~90% increase for the median home. Even half of that isn’t too bad, where else are you getting that kind of investment with 25% down?
$100/mo "profit" doesn't even cover maintenance. Also, property taxes continue to increase, etc. The biggest factor is how long ago did you buy the property. Otherwise, a lot of landlords are making money on appreciation when selling (btw we now have a capital gains tax which probably gets expanded in the future).
Do you know what the word profit means?
Nobody smart is being a landlord to make $100 a month. The amount of risk involved...come on dude. I know the industry inside and out and worked in it for many years.
one of her too many children flush happy meal toys down the toilet like a future sociopath.
Now you have me second guessing my choice to sell. I actually enjoy most parts of it. I liked that those 8 weirdos are all under my roof. I used to go over and collect the rent and empty out the coins from the washer and dryer. Once they invited me over for Monday night football and I brought my brother who was going to collect while I was out of town. At halftime they had a "show" that was a guy squishing oil and watercolors on one of those overhead projectors from my 8th grade classroom while DJing strange music. My brother is cracking up the whole time because he was out on the back porch smoking dope with these guys most of the first half.
It appears you most certainly did make money as a landlord. Correct me if I’m wrong:
With the numbers you provided it appears you’re almost $100k into the mortgage, a ROI of 5.75% - that’s assuming you made no profit from rent, just breaking even. A $100/month profit takes that to 6% ROI.
That’s not including the appreciation, which I’m sure is significant. In the Seattle area for that time span it’s a ~90% increase for the median home. Even half of that isn’t too bad, where else are you getting that kind of investment with 25% down?
$100/mo "profit" doesn't even cover maintenance. Also, property taxes continue to increase, etc. The biggest factor is how long ago did you buy the property. Otherwise, a lot of landlords are making money on appreciation when selling (btw we now have a capital gains tax which probably gets expanded in the future).
At one point Biden’s campaign website had a piece about doing away with 1031 exchanges. Is that what you’re referencing with the capital gains tax?
No, WA State legislature enacted a 7% cap gains tax. 1031-exchange is a way to defer taxes in to a new property. But yeah, Biden wants to do away with that.
It appears you most certainly did make money as a landlord. Correct me if I’m wrong:
With the numbers you provided it appears you’re almost $100k into the mortgage, a ROI of 5.75% - that’s assuming you made no profit from rent, just breaking even. A $100/month profit takes that to 6% ROI.
That’s not including the appreciation, which I’m sure is significant. In the Seattle area for that time span it’s a ~90% increase for the median home. Even half of that isn’t too bad, where else are you getting that kind of investment with 25% down?
$100/mo "profit" doesn't even cover maintenance. Also, property taxes continue to increase, etc. The biggest factor is how long ago did you buy the property. Otherwise, a lot of landlords are making money on appreciation when selling (btw we now have a capital gains tax which probably gets expanded in the future).
Do you know what the word profit means?
Nobody smart is being a landlord to make $100 a month. The amount of risk involved...come on dude. I know the industry inside and out and worked in it for many years.
I’m curious which part of what industry you know inside and out. Because I think you’re missing the boat/train/short bus here.
Why the fuck did I write this out? Because I’m an idiot, that’s why. TLDR: OP made a lot of money.
I’ll let you in on a secret: the $100 month profit was a placeholder for my very rough example estimate. It was just the number necessary to bump it up to a 6% annualized ROI when combined with how much of the principal has been paid off.
The $100 a month “profit“ (let’s call it X) is not the only source of gain. Equity (principal + appreciation) is the other. If you owned the house outright, let’s say you inherited it, then $100 a month wouldn’t be very smart. But that’s not the case now, is it?
The mortgage + maintenance expenses + insurance + property tax is being paid by rent. However much of the principal is paid off + appreciation is your equity. The $X/month is what is left over for your cash profit.
We can calculate some better info with the provided numbers. We’ll go extremely conservative so I can’t be accused of being sugary.
Initial expenses: $168,000 down payment, no closing, $30,000 repairs, $27,000 six months of mortgage and expenses prior to renting. Total: $225,000
Income: 86 months of $5400/month rent (91 months total rented) Total income: $464,400 realized (491,400 If paid in full) Note: we’ve been provided $5400 rent starting in October 2013, we’ll assume OP is the patron saint of renters and that number has remained static, although he said he raised it. OP said they’ve been dragging ass for 5 months, not sure what percentage of rent paid dragging ass qualifies under so I just took out 5,400x5.
As you can see I plugged in conservative numbers. I went with the homes assessment as $700,000 for property tax with a 1% tax rate for $7k/year, depending on where it is and assessed value I’d bet that’s close to the current rate and not the starting one in 2013. Homeowners insurance at $3000/year. No HOA was mentioned. I’m assuming no PMI with 25% down, assessed value, and OPs undoubtedly good credit.
That gives us $3,152 as the monthly payment. I’ll add in maintenance at 25% of monthly rent for $4,500 of total expense/month.
At $5,400 revenue/month with $4500 expenses, a profit of $900 month. That’s a bit more than $100 month. $81,900 to date if realized for 91 months.
Five months of unpaid rent is a loss of $22,385 for $59,515 made from rental profit.
Let’s calculate the principal of the loan paid and appreciation profit next.
The amortization table shows us there is $417,375 remaining on the loan. $88,675 of the $506,000 principal has been paid off. That’s your profit before appreciation.
Appreciation: as I looked up earlier, the sale price of the median home in King Co went up ~90% over that time span. Let’s go ultra conservative and cut it in half, 45%. A quick look at homes for sale and their historical sales price says that 45% is incredibly low but I’m using it to prove a point. That would be $303,750 if $675,000 was the sale price in April 2013. (If using 90% the appreciation is $607,500)
Rental profit: $59,515 Principal paid off: $88,675 Appreciation: $303,750 Fed cap gains: -? Total: $451,890
An initial investment of $225,000 created $451,890 of profit over 91 months under a very conservative scenario. That’s about $5,000 for every month of ownership. The increase in home value is responsible for 2/3 of that, but even with that removed it would be ~$1,650 per month.
Note: I don’t have enough info to figure out OPs capital gains tax, and what I read real estate is exempt from Washington’s tax, if it is upheld as constitutional it goes into effect in 2022 and OP is selling now. I didn’t bother with inflation.
It appears you most certainly did make money as a landlord. Correct me if I’m wrong:
With the numbers you provided it appears you’re almost $100k into the mortgage, a ROI of 5.75% - that’s assuming you made no profit from rent, just breaking even. A $100/month profit takes that to 6% ROI.
That’s not including the appreciation, which I’m sure is significant. In the Seattle area for that time span it’s a ~90% increase for the median home. Even half of that isn’t too bad, where else are you getting that kind of investment with 25% down?
$100/mo "profit" doesn't even cover maintenance. Also, property taxes continue to increase, etc. The biggest factor is how long ago did you buy the property. Otherwise, a lot of landlords are making money on appreciation when selling (btw we now have a capital gains tax which probably gets expanded in the future).
At one point Biden’s campaign website had a piece about doing away with 1031 exchanges. Is that what you’re referencing with the capital gains tax?
No, WA State legislature enacted a 7% cap gains tax. 1031-exchange is a way to defer taxes in to a new property. But yeah, Biden wants to do away with that.
It appears you most certainly did make money as a landlord. Correct me if I’m wrong:
With the numbers you provided it appears you’re almost $100k into the mortgage, a ROI of 5.75% - that’s assuming you made no profit from rent, just breaking even. A $100/month profit takes that to 6% ROI.
That’s not including the appreciation, which I’m sure is significant. In the Seattle area for that time span it’s a ~90% increase for the median home. Even half of that isn’t too bad, where else are you getting that kind of investment with 25% down?
$100/mo "profit" doesn't even cover maintenance. Also, property taxes continue to increase, etc. The biggest factor is how long ago did you buy the property. Otherwise, a lot of landlords are making money on appreciation when selling (btw we now have a capital gains tax which probably gets expanded in the future).
Do you know what the word profit means?
Nobody smart is being a landlord to make $100 a month. The amount of risk involved...come on dude. I know the industry inside and out and worked in it for many years.
I’m curious which part of what industry you know inside and out. Because I think you’re missing the boat/train/short bus here.
Why the fuck did I write this out? Because I’m an idiot, that’s why. TLDR: OP made a lot of money.
I’ll let you in on a secret: the $100 month profit was a placeholder for my very rough example estimate. It was just the number necessary to bump it up to a 6% annualized ROI when combined with how much of the principal has been paid off.
The $100 a month “profit“ (let’s call it X) is not the only source of gain. Equity (principal + appreciation) is the other. If you owned the house outright, let’s say you inherited it, then $100 a month wouldn’t be very smart. But that’s not the case now, is it?
The mortgage + maintenance expenses + insurance + property tax is being paid by rent. However much of the principal is paid off + appreciation is your equity. The $X/month is what is left over for your cash profit.
We can calculate some better info with the provided numbers. We’ll go extremely conservative so I can’t be accused of being sugary.
Initial expenses: $168,000 down payment, no closing, $30,000 repairs, $27,000 six months of mortgage and expenses prior to renting. Total: $225,000
Income: 86 months of $5400/month rent (91 months total rented) Total income: $464,400 realized (491,400 If paid in full) Note: we’ve been provided $5400 rent starting in October 2013, we’ll assume OP is the patron saint of renters and that number has remained static, although he said he raised it. OP said they’ve been dragging ass for 5 months, not sure what percentage of rent paid dragging ass qualifies under so I just took out 5,400x5.
As you can see I plugged in conservative numbers. I went with the homes assessment as $700,000 for property tax with a 1% tax rate for $7k/year, depending on where it is and assessed value I’d bet that’s close to the current rate and not the starting one in 2013. Homeowners insurance at $3000/year. No HOA was mentioned. I’m assuming no PMI with 25% down, assessed value, and OPs undoubtedly good credit.
That gives us $3,152 as the monthly payment. I’ll add in maintenance at 25% of monthly rent for $4,500 of total expense/month.
At $5,400 revenue/month with $4500 expenses, a profit of $900 month. That’s a bit more than $100 month. $81,900 to date if realized for 91 months.
Five months of unpaid rent is a loss of $22,385 for $59,515 made from rental profit.
Let’s calculate the principal of the loan paid and appreciation profit next.
The amortization table shows us there is $417,375 remaining on the loan. $88,675 of the $506,000 principal has been paid off. That’s your profit before appreciation.
Appreciation: as I looked up earlier, the sale price of the median home in King Co went up ~90% over that time span. Let’s go ultra conservative and cut it in half, 45%. A quick look at homes for sale and their historical sales price says that 45% is incredibly low but I’m using it to prove a point. That would be $303,750 if $675,000 was the sale price in April 2013. (If using 90% the appreciation is $607,500)
Rental profit: $59,515 Principal paid off: $88,675 Appreciation: $303,750 Fed cap gains: -? Total: $451,890
An initial investment of $225,000 created $451,890 of profit over 91 months under a very conservative scenario. That’s about $5,000 for every month of ownership. The increase in home value is responsible for 2/3 of that, but even with that removed it would be ~$1,650 per month.
Note: I don’t have enough info to figure out OPs capital gains tax, and what I read real estate is exempt from Washington’s tax, if it is upheld as constitutional it goes into effect in 2022 and OP is selling now. I didn’t bother with inflation.
It appears you most certainly did make money as a landlord. Correct me if I’m wrong:
With the numbers you provided it appears you’re almost $100k into the mortgage, a ROI of 5.75% - that’s assuming you made no profit from rent, just breaking even. A $100/month profit takes that to 6% ROI.
That’s not including the appreciation, which I’m sure is significant. In the Seattle area for that time span it’s a ~90% increase for the median home. Even half of that isn’t too bad, where else are you getting that kind of investment with 25% down?
$100/mo "profit" doesn't even cover maintenance. Also, property taxes continue to increase, etc. The biggest factor is how long ago did you buy the property. Otherwise, a lot of landlords are making money on appreciation when selling (btw we now have a capital gains tax which probably gets expanded in the future).
At one point Biden’s campaign website had a piece about doing away with 1031 exchanges. Is that what you’re referencing with the capital gains tax?
No, WA State legislature enacted a 7% cap gains tax. 1031-exchange is a way to defer taxes in to a new property. But yeah, Biden wants to do away with that.
It appears you most certainly did make money as a landlord. Correct me if I’m wrong:
With the numbers you provided it appears you’re almost $100k into the mortgage, a ROI of 5.75% - that’s assuming you made no profit from rent, just breaking even. A $100/month profit takes that to 6% ROI.
That’s not including the appreciation, which I’m sure is significant. In the Seattle area for that time span it’s a ~90% increase for the median home. Even half of that isn’t too bad, where else are you getting that kind of investment with 25% down?
$100/mo "profit" doesn't even cover maintenance. Also, property taxes continue to increase, etc. The biggest factor is how long ago did you buy the property. Otherwise, a lot of landlords are making money on appreciation when selling (btw we now have a capital gains tax which probably gets expanded in the future).
Do you know what the word profit means?
Nobody smart is being a landlord to make $100 a month. The amount of risk involved...come on dude. I know the industry inside and out and worked in it for many years.
I’m curious which part of what industry you know inside and out. Because I think you’re missing the boat/train/short bus here.
Why the fuck did I write this out? Because I’m an idiot, that’s why. TLDR: OP made a lot of money.
I’ll let you in on a secret: the $100 month profit was a placeholder for my very rough example estimate. It was just the number necessary to bump it up to a 6% annualized ROI when combined with how much of the principal has been paid off.
The $100 a month “profit“ (let’s call it X) is not the only source of gain. Equity (principal + appreciation) is the other. If you owned the house outright, let’s say you inherited it, then $100 a month wouldn’t be very smart. But that’s not the case now, is it?
The mortgage + maintenance expenses + insurance + property tax is being paid by rent. However much of the principal is paid off + appreciation is your equity. The $X/month is what is left over for your cash profit.
We can calculate some better info with the provided numbers. We’ll go extremely conservative so I can’t be accused of being sugary.
Initial expenses: $168,000 down payment, no closing, $30,000 repairs, $27,000 six months of mortgage and expenses prior to renting. Total: $225,000
Income: 86 months of $5400/month rent (91 months total rented) Total income: $464,400 realized (491,400 If paid in full) Note: we’ve been provided $5400 rent starting in October 2013, we’ll assume OP is the patron saint of renters and that number has remained static, although he said he raised it. OP said they’ve been dragging ass for 5 months, not sure what percentage of rent paid dragging ass qualifies under so I just took out 5,400x5.
As you can see I plugged in conservative numbers. I went with the homes assessment as $700,000 for property tax with a 1% tax rate for $7k/year, depending on where it is and assessed value I’d bet that’s close to the current rate and not the starting one in 2013. Homeowners insurance at $3000/year. No HOA was mentioned. I’m assuming no PMI with 25% down, assessed value, and OPs undoubtedly good credit.
That gives us $3,152 as the monthly payment. I’ll add in maintenance at 25% of monthly rent for $4,500 of total expense/month.
At $5,400 revenue/month with $4500 expenses, a profit of $900 month. That’s a bit more than $100 month. $81,900 to date if realized for 91 months.
Five months of unpaid rent is a loss of $22,385 for $59,515 made from rental profit.
Let’s calculate the principal of the loan paid and appreciation profit next.
The amortization table shows us there is $417,375 remaining on the loan. $88,675 of the $506,000 principal has been paid off. That’s your profit before appreciation.
Appreciation: as I looked up earlier, the sale price of the median home in King Co went up ~90% over that time span. Let’s go ultra conservative and cut it in half, 45%. A quick look at homes for sale and their historical sales price says that 45% is incredibly low but I’m using it to prove a point. That would be $303,750 if $675,000 was the sale price in April 2013. (If using 90% the appreciation is $607,500)
Rental profit: $59,515 Principal paid off: $88,675 Appreciation: $303,750 Fed cap gains: -? Total: $451,890
An initial investment of $225,000 created $451,890 of profit over 91 months under a very conservative scenario. That’s about $5,000 for every month of ownership. The increase in home value is responsible for 2/3 of that, but even with that removed it would be ~$1,650 per month.
Note: I don’t have enough info to figure out OPs capital gains tax, and what I read real estate is exempt from Washington’s tax, if it is upheld as constitutional it goes into effect in 2022 and OP is selling now. I didn’t bother with inflation.
It appears you most certainly did make money as a landlord. Correct me if I’m wrong:
With the numbers you provided it appears you’re almost $100k into the mortgage, a ROI of 5.75% - that’s assuming you made no profit from rent, just breaking even. A $100/month profit takes that to 6% ROI.
That’s not including the appreciation, which I’m sure is significant. In the Seattle area for that time span it’s a ~90% increase for the median home. Even half of that isn’t too bad, where else are you getting that kind of investment with 25% down?
$100/mo "profit" doesn't even cover maintenance. Also, property taxes continue to increase, etc. The biggest factor is how long ago did you buy the property. Otherwise, a lot of landlords are making money on appreciation when selling (btw we now have a capital gains tax which probably gets expanded in the future).
At one point Biden’s campaign website had a piece about doing away with 1031 exchanges. Is that what you’re referencing with the capital gains tax?
No, WA State legislature enacted a 7% cap gains tax. 1031-exchange is a way to defer taxes in to a new property. But yeah, Biden wants to do away with that.
It appears you most certainly did make money as a landlord. Correct me if I’m wrong:
With the numbers you provided it appears you’re almost $100k into the mortgage, a ROI of 5.75% - that’s assuming you made no profit from rent, just breaking even. A $100/month profit takes that to 6% ROI.
That’s not including the appreciation, which I’m sure is significant. In the Seattle area for that time span it’s a ~90% increase for the median home. Even half of that isn’t too bad, where else are you getting that kind of investment with 25% down?
$100/mo "profit" doesn't even cover maintenance. Also, property taxes continue to increase, etc. The biggest factor is how long ago did you buy the property. Otherwise, a lot of landlords are making money on appreciation when selling (btw we now have a capital gains tax which probably gets expanded in the future).
Do you know what the word profit means?
Nobody smart is being a landlord to make $100 a month. The amount of risk involved...come on dude. I know the industry inside and out and worked in it for many years.
I’m curious which part of what industry you know inside and out. Because I think you’re missing the boat/train/short bus here.
Why the fuck did I write this out? Because I’m an idiot, that’s why. TLDR: OP made a lot of money.
I’ll let you in on a secret: the $100 month profit was a placeholder for my very rough example estimate. It was just the number necessary to bump it up to a 6% annualized ROI when combined with how much of the principal has been paid off.
The $100 a month “profit“ (let’s call it X) is not the only source of gain. Equity (principal + appreciation) is the other. If you owned the house outright, let’s say you inherited it, then $100 a month wouldn’t be very smart. But that’s not the case now, is it?
The mortgage + maintenance expenses + insurance + property tax is being paid by rent. However much of the principal is paid off + appreciation is your equity. The $X/month is what is left over for your cash profit.
We can calculate some better info with the provided numbers. We’ll go extremely conservative so I can’t be accused of being sugary.
Initial expenses: $168,000 down payment, no closing, $30,000 repairs, $27,000 six months of mortgage and expenses prior to renting. Total: $225,000
Income: 86 months of $5400/month rent (91 months total rented) Total income: $464,400 realized (491,400 If paid in full) Note: we’ve been provided $5400 rent starting in October 2013, we’ll assume OP is the patron saint of renters and that number has remained static, although he said he raised it. OP said they’ve been dragging ass for 5 months, not sure what percentage of rent paid dragging ass qualifies under so I just took out 5,400x5.
As you can see I plugged in conservative numbers. I went with the homes assessment as $700,000 for property tax with a 1% tax rate for $7k/year, depending on where it is and assessed value I’d bet that’s close to the current rate and not the starting one in 2013. Homeowners insurance at $3000/year. No HOA was mentioned. I’m assuming no PMI with 25% down, assessed value, and OPs undoubtedly good credit.
That gives us $3,152 as the monthly payment. I’ll add in maintenance at 25% of monthly rent for $4,500 of total expense/month.
At $5,400 revenue/month with $4500 expenses, a profit of $900 month. That’s a bit more than $100 month. $81,900 to date if realized for 91 months.
Five months of unpaid rent is a loss of $22,385 for $59,515 made from rental profit.
Let’s calculate the principal of the loan paid and appreciation profit next.
The amortization table shows us there is $417,375 remaining on the loan. $88,675 of the $506,000 principal has been paid off. That’s your profit before appreciation.
Appreciation: as I looked up earlier, the sale price of the median home in King Co went up ~90% over that time span. Let’s go ultra conservative and cut it in half, 45%. A quick look at homes for sale and their historical sales price says that 45% is incredibly low but I’m using it to prove a point. That would be $303,750 if $675,000 was the sale price in April 2013. (If using 90% the appreciation is $607,500)
Rental profit: $59,515 Principal paid off: $88,675 Appreciation: $303,750 Fed cap gains: -? Total: $451,890
An initial investment of $225,000 created $451,890 of profit over 91 months under a very conservative scenario. That’s about $5,000 for every month of ownership. The increase in home value is responsible for 2/3 of that, but even with that removed it would be ~$1,650 per month.
Note: I don’t have enough info to figure out OPs capital gains tax, and what I read real estate is exempt from Washington’s tax, if it is upheld as constitutional it goes into effect in 2022 and OP is selling now. I didn’t bother with inflation.
It appears you most certainly did make money as a landlord. Correct me if I’m wrong:
With the numbers you provided it appears you’re almost $100k into the mortgage, a ROI of 5.75% - that’s assuming you made no profit from rent, just breaking even. A $100/month profit takes that to 6% ROI.
That’s not including the appreciation, which I’m sure is significant. In the Seattle area for that time span it’s a ~90% increase for the median home. Even half of that isn’t too bad, where else are you getting that kind of investment with 25% down?
$100/mo "profit" doesn't even cover maintenance. Also, property taxes continue to increase, etc. The biggest factor is how long ago did you buy the property. Otherwise, a lot of landlords are making money on appreciation when selling (btw we now have a capital gains tax which probably gets expanded in the future).
At one point Biden’s campaign website had a piece about doing away with 1031 exchanges. Is that what you’re referencing with the capital gains tax?
No, WA State legislature enacted a 7% cap gains tax. 1031-exchange is a way to defer taxes in to a new property. But yeah, Biden wants to do away with that.
It appears you most certainly did make money as a landlord. Correct me if I’m wrong:
With the numbers you provided it appears you’re almost $100k into the mortgage, a ROI of 5.75% - that’s assuming you made no profit from rent, just breaking even. A $100/month profit takes that to 6% ROI.
That’s not including the appreciation, which I’m sure is significant. In the Seattle area for that time span it’s a ~90% increase for the median home. Even half of that isn’t too bad, where else are you getting that kind of investment with 25% down?
$100/mo "profit" doesn't even cover maintenance. Also, property taxes continue to increase, etc. The biggest factor is how long ago did you buy the property. Otherwise, a lot of landlords are making money on appreciation when selling (btw we now have a capital gains tax which probably gets expanded in the future).
Do you know what the word profit means?
Nobody smart is being a landlord to make $100 a month. The amount of risk involved...come on dude. I know the industry inside and out and worked in it for many years.
I’m curious which part of what industry you know inside and out. Because I think you’re missing the boat/train/short bus here.
Why the fuck did I write this out? Because I’m an idiot, that’s why. TLDR: OP made a lot of money.
I’ll let you in on a secret: the $100 month profit was a placeholder for my very rough example estimate. It was just the number necessary to bump it up to a 6% annualized ROI when combined with how much of the principal has been paid off.
The $100 a month “profit“ (let’s call it X) is not the only source of gain. Equity (principal + appreciation) is the other. If you owned the house outright, let’s say you inherited it, then $100 a month wouldn’t be very smart. But that’s not the case now, is it?
The mortgage + maintenance expenses + insurance + property tax is being paid by rent. However much of the principal is paid off + appreciation is your equity. The $X/month is what is left over for your cash profit.
We can calculate some better info with the provided numbers. We’ll go extremely conservative so I can’t be accused of being sugary.
Initial expenses: $168,000 down payment, no closing, $30,000 repairs, $27,000 six months of mortgage and expenses prior to renting. Total: $225,000
Income: 86 months of $5400/month rent (91 months total rented) Total income: $464,400 realized (491,400 If paid in full) Note: we’ve been provided $5400 rent starting in October 2013, we’ll assume OP is the patron saint of renters and that number has remained static, although he said he raised it. OP said they’ve been dragging ass for 5 months, not sure what percentage of rent paid dragging ass qualifies under so I just took out 5,400x5.
As you can see I plugged in conservative numbers. I went with the homes assessment as $700,000 for property tax with a 1% tax rate for $7k/year, depending on where it is and assessed value I’d bet that’s close to the current rate and not the starting one in 2013. Homeowners insurance at $3000/year. No HOA was mentioned. I’m assuming no PMI with 25% down, assessed value, and OPs undoubtedly good credit.
That gives us $3,152 as the monthly payment. I’ll add in maintenance at 25% of monthly rent for $4,500 of total expense/month.
At $5,400 revenue/month with $4500 expenses, a profit of $900 month. That’s a bit more than $100 month. $81,900 to date if realized for 91 months.
Five months of unpaid rent is a loss of $22,385 for $59,515 made from rental profit.
Let’s calculate the principal of the loan paid and appreciation profit next.
The amortization table shows us there is $417,375 remaining on the loan. $88,675 of the $506,000 principal has been paid off. That’s your profit before appreciation.
Appreciation: as I looked up earlier, the sale price of the median home in King Co went up ~90% over that time span. Let’s go ultra conservative and cut it in half, 45%. A quick look at homes for sale and their historical sales price says that 45% is incredibly low but I’m using it to prove a point. That would be $303,750 if $675,000 was the sale price in April 2013. (If using 90% the appreciation is $607,500)
Rental profit: $59,515 Principal paid off: $88,675 Appreciation: $303,750 Fed cap gains: -? Total: $451,890
An initial investment of $225,000 created $451,890 of profit over 91 months under a very conservative scenario. That’s about $5,000 for every month of ownership. The increase in home value is responsible for 2/3 of that, but even with that removed it would be ~$1,650 per month.
Note: I don’t have enough info to figure out OPs capital gains tax, and what I read real estate is exempt from Washington’s tax, if it is upheld as constitutional it goes into effect in 2022 and OP is selling now. I didn’t bother with inflation.
This is the only @TheChart that I’m aware of, and it’s the only one that matters. He needs to do real estate markets next, make sure the 2022 recruits get it.
It appears you most certainly did make money as a landlord. Correct me if I’m wrong:
With the numbers you provided it appears you’re almost $100k into the mortgage, a ROI of 5.75% - that’s assuming you made no profit from rent, just breaking even. A $100/month profit takes that to 6% ROI.
That’s not including the appreciation, which I’m sure is significant. In the Seattle area for that time span it’s a ~90% increase for the median home. Even half of that isn’t too bad, where else are you getting that kind of investment with 25% down?
$100/mo "profit" doesn't even cover maintenance. Also, property taxes continue to increase, etc. The biggest factor is how long ago did you buy the property. Otherwise, a lot of landlords are making money on appreciation when selling (btw we now have a capital gains tax which probably gets expanded in the future).
At one point Biden’s campaign website had a piece about doing away with 1031 exchanges. Is that what you’re referencing with the capital gains tax?
No, WA State legislature enacted a 7% cap gains tax. 1031-exchange is a way to defer taxes in to a new property. But yeah, Biden wants to do away with that.
It appears you most certainly did make money as a landlord. Correct me if I’m wrong:
With the numbers you provided it appears you’re almost $100k into the mortgage, a ROI of 5.75% - that’s assuming you made no profit from rent, just breaking even. A $100/month profit takes that to 6% ROI.
That’s not including the appreciation, which I’m sure is significant. In the Seattle area for that time span it’s a ~90% increase for the median home. Even half of that isn’t too bad, where else are you getting that kind of investment with 25% down?
$100/mo "profit" doesn't even cover maintenance. Also, property taxes continue to increase, etc. The biggest factor is how long ago did you buy the property. Otherwise, a lot of landlords are making money on appreciation when selling (btw we now have a capital gains tax which probably gets expanded in the future).
Do you know what the word profit means?
Nobody smart is being a landlord to make $100 a month. The amount of risk involved...come on dude. I know the industry inside and out and worked in it for many years.
I’m curious which part of what industry you know inside and out. Because I think you’re missing the boat/train/short bus here.
Why the fuck did I write this out? Because I’m an idiot, that’s why. TLDR: OP made a lot of money.
I’ll let you in on a secret: the $100 month profit was a placeholder for my very rough example estimate. It was just the number necessary to bump it up to a 6% annualized ROI when combined with how much of the principal has been paid off.
The $100 a month “profit“ (let’s call it X) is not the only source of gain. Equity (principal + appreciation) is the other. If you owned the house outright, let’s say you inherited it, then $100 a month wouldn’t be very smart. But that’s not the case now, is it?
The mortgage + maintenance expenses + insurance + property tax is being paid by rent. However much of the principal is paid off + appreciation is your equity. The $X/month is what is left over for your cash profit.
We can calculate some better info with the provided numbers. We’ll go extremely conservative so I can’t be accused of being sugary.
Initial expenses: $168,000 down payment, no closing, $30,000 repairs, $27,000 six months of mortgage and expenses prior to renting. Total: $225,000
Income: 86 months of $5400/month rent (91 months total rented) Total income: $464,400 realized (491,400 If paid in full) Note: we’ve been provided $5400 rent starting in October 2013, we’ll assume OP is the patron saint of renters and that number has remained static, although he said he raised it. OP said they’ve been dragging ass for 5 months, not sure what percentage of rent paid dragging ass qualifies under so I just took out 5,400x5.
As you can see I plugged in conservative numbers. I went with the homes assessment as $700,000 for property tax with a 1% tax rate for $7k/year, depending on where it is and assessed value I’d bet that’s close to the current rate and not the starting one in 2013. Homeowners insurance at $3000/year. No HOA was mentioned. I’m assuming no PMI with 25% down, assessed value, and OPs undoubtedly good credit.
That gives us $3,152 as the monthly payment. I’ll add in maintenance at 25% of monthly rent for $4,500 of total expense/month.
At $5,400 revenue/month with $4500 expenses, a profit of $900 month. That’s a bit more than $100 month. $81,900 to date if realized for 91 months.
Five months of unpaid rent is a loss of $22,385 for $59,515 made from rental profit.
Let’s calculate the principal of the loan paid and appreciation profit next.
The amortization table shows us there is $417,375 remaining on the loan. $88,675 of the $506,000 principal has been paid off. That’s your profit before appreciation.
Appreciation: as I looked up earlier, the sale price of the median home in King Co went up ~90% over that time span. Let’s go ultra conservative and cut it in half, 45%. A quick look at homes for sale and their historical sales price says that 45% is incredibly low but I’m using it to prove a point. That would be $303,750 if $675,000 was the sale price in April 2013. (If using 90% the appreciation is $607,500)
Rental profit: $59,515 Principal paid off: $88,675 Appreciation: $303,750 Fed cap gains: -? Total: $451,890
An initial investment of $225,000 created $451,890 of profit over 91 months under a very conservative scenario. That’s about $5,000 for every month of ownership. The increase in home value is responsible for 2/3 of that, but even with that removed it would be ~$1,650 per month.
Note: I don’t have enough info to figure out OPs capital gains tax, and what I read real estate is exempt from Washington’s tax, if it is upheld as constitutional it goes into effect in 2022 and OP is selling now. I didn’t bother with inflation.
This is the only @TheChart that I’m aware of, and it’s the only one that matters. He needs to do real estate markets next, make sure the 2022 recruits get it.
Huh. Kind of shocked that the median income in Los Angeles County would be lower than King County. I looked it up, though, and it is.
It appears you most certainly did make money as a landlord. Correct me if I’m wrong:
With the numbers you provided it appears you’re almost $100k into the mortgage, a ROI of 5.75% - that’s assuming you made no profit from rent, just breaking even. A $100/month profit takes that to 6% ROI.
That’s not including the appreciation, which I’m sure is significant. In the Seattle area for that time span it’s a ~90% increase for the median home. Even half of that isn’t too bad, where else are you getting that kind of investment with 25% down?
$100/mo "profit" doesn't even cover maintenance. Also, property taxes continue to increase, etc. The biggest factor is how long ago did you buy the property. Otherwise, a lot of landlords are making money on appreciation when selling (btw we now have a capital gains tax which probably gets expanded in the future).
At one point Biden’s campaign website had a piece about doing away with 1031 exchanges. Is that what you’re referencing with the capital gains tax?
No, WA State legislature enacted a 7% cap gains tax. 1031-exchange is a way to defer taxes in to a new property. But yeah, Biden wants to do away with that.
It appears you most certainly did make money as a landlord. Correct me if I’m wrong:
With the numbers you provided it appears you’re almost $100k into the mortgage, a ROI of 5.75% - that’s assuming you made no profit from rent, just breaking even. A $100/month profit takes that to 6% ROI.
That’s not including the appreciation, which I’m sure is significant. In the Seattle area for that time span it’s a ~90% increase for the median home. Even half of that isn’t too bad, where else are you getting that kind of investment with 25% down?
$100/mo "profit" doesn't even cover maintenance. Also, property taxes continue to increase, etc. The biggest factor is how long ago did you buy the property. Otherwise, a lot of landlords are making money on appreciation when selling (btw we now have a capital gains tax which probably gets expanded in the future).
Do you know what the word profit means?
Nobody smart is being a landlord to make $100 a month. The amount of risk involved...come on dude. I know the industry inside and out and worked in it for many years.
I’m curious which part of what industry you know inside and out. Because I think you’re missing the boat/train/short bus here.
Why the fuck did I write this out? Because I’m an idiot, that’s why. TLDR: OP made a lot of money.
I’ll let you in on a secret: the $100 month profit was a placeholder for my very rough example estimate. It was just the number necessary to bump it up to a 6% annualized ROI when combined with how much of the principal has been paid off.
The $100 a month “profit“ (let’s call it X) is not the only source of gain. Equity (principal + appreciation) is the other. If you owned the house outright, let’s say you inherited it, then $100 a month wouldn’t be very smart. But that’s not the case now, is it?
The mortgage + maintenance expenses + insurance + property tax is being paid by rent. However much of the principal is paid off + appreciation is your equity. The $X/month is what is left over for your cash profit.
We can calculate some better info with the provided numbers. We’ll go extremely conservative so I can’t be accused of being sugary.
Initial expenses: $168,000 down payment, no closing, $30,000 repairs, $27,000 six months of mortgage and expenses prior to renting. Total: $225,000
Income: 86 months of $5400/month rent (91 months total rented) Total income: $464,400 realized (491,400 If paid in full) Note: we’ve been provided $5400 rent starting in October 2013, we’ll assume OP is the patron saint of renters and that number has remained static, although he said he raised it. OP said they’ve been dragging ass for 5 months, not sure what percentage of rent paid dragging ass qualifies under so I just took out 5,400x5.
As you can see I plugged in conservative numbers. I went with the homes assessment as $700,000 for property tax with a 1% tax rate for $7k/year, depending on where it is and assessed value I’d bet that’s close to the current rate and not the starting one in 2013. Homeowners insurance at $3000/year. No HOA was mentioned. I’m assuming no PMI with 25% down, assessed value, and OPs undoubtedly good credit.
That gives us $3,152 as the monthly payment. I’ll add in maintenance at 25% of monthly rent for $4,500 of total expense/month.
At $5,400 revenue/month with $4500 expenses, a profit of $900 month. That’s a bit more than $100 month. $81,900 to date if realized for 91 months.
Five months of unpaid rent is a loss of $22,385 for $59,515 made from rental profit.
Let’s calculate the principal of the loan paid and appreciation profit next.
The amortization table shows us there is $417,375 remaining on the loan. $88,675 of the $506,000 principal has been paid off. That’s your profit before appreciation.
Appreciation: as I looked up earlier, the sale price of the median home in King Co went up ~90% over that time span. Let’s go ultra conservative and cut it in half, 45%. A quick look at homes for sale and their historical sales price says that 45% is incredibly low but I’m using it to prove a point. That would be $303,750 if $675,000 was the sale price in April 2013. (If using 90% the appreciation is $607,500)
Rental profit: $59,515 Principal paid off: $88,675 Appreciation: $303,750 Fed cap gains: -? Total: $451,890
An initial investment of $225,000 created $451,890 of profit over 91 months under a very conservative scenario. That’s about $5,000 for every month of ownership. The increase in home value is responsible for 2/3 of that, but even with that removed it would be ~$1,650 per month.
Note: I don’t have enough info to figure out OPs capital gains tax, and what I read real estate is exempt from Washington’s tax, if it is upheld as constitutional it goes into effect in 2022 and OP is selling now. I didn’t bother with inflation.
This is the only @TheChart that I’m aware of, and it’s the only one that matters. He needs to do real estate markets next, make sure the 2022 recruits get it.
Huh. Kind of shocked that the median income in Los Angeles County would be lower than King County. I looked it up, though, and it is.
LA County has more homeless fucks than King County.
It appears you most certainly did make money as a landlord. Correct me if I’m wrong:
With the numbers you provided it appears you’re almost $100k into the mortgage, a ROI of 5.75% - that’s assuming you made no profit from rent, just breaking even. A $100/month profit takes that to 6% ROI.
That’s not including the appreciation, which I’m sure is significant. In the Seattle area for that time span it’s a ~90% increase for the median home. Even half of that isn’t too bad, where else are you getting that kind of investment with 25% down?
$100/mo "profit" doesn't even cover maintenance. Also, property taxes continue to increase, etc. The biggest factor is how long ago did you buy the property. Otherwise, a lot of landlords are making money on appreciation when selling (btw we now have a capital gains tax which probably gets expanded in the future).
At one point Biden’s campaign website had a piece about doing away with 1031 exchanges. Is that what you’re referencing with the capital gains tax?
No, WA State legislature enacted a 7% cap gains tax. 1031-exchange is a way to defer taxes in to a new property. But yeah, Biden wants to do away with that.
It appears you most certainly did make money as a landlord. Correct me if I’m wrong:
With the numbers you provided it appears you’re almost $100k into the mortgage, a ROI of 5.75% - that’s assuming you made no profit from rent, just breaking even. A $100/month profit takes that to 6% ROI.
That’s not including the appreciation, which I’m sure is significant. In the Seattle area for that time span it’s a ~90% increase for the median home. Even half of that isn’t too bad, where else are you getting that kind of investment with 25% down?
$100/mo "profit" doesn't even cover maintenance. Also, property taxes continue to increase, etc. The biggest factor is how long ago did you buy the property. Otherwise, a lot of landlords are making money on appreciation when selling (btw we now have a capital gains tax which probably gets expanded in the future).
Do you know what the word profit means?
Nobody smart is being a landlord to make $100 a month. The amount of risk involved...come on dude. I know the industry inside and out and worked in it for many years.
I’m curious which part of what industry you know inside and out. Because I think you’re missing the boat/train/short bus here.
Why the fuck did I write this out? Because I’m an idiot, that’s why. TLDR: OP made a lot of money.
I’ll let you in on a secret: the $100 month profit was a placeholder for my very rough example estimate. It was just the number necessary to bump it up to a 6% annualized ROI when combined with how much of the principal has been paid off.
The $100 a month “profit“ (let’s call it X) is not the only source of gain. Equity (principal + appreciation) is the other. If you owned the house outright, let’s say you inherited it, then $100 a month wouldn’t be very smart. But that’s not the case now, is it?
The mortgage + maintenance expenses + insurance + property tax is being paid by rent. However much of the principal is paid off + appreciation is your equity. The $X/month is what is left over for your cash profit.
We can calculate some better info with the provided numbers. We’ll go extremely conservative so I can’t be accused of being sugary.
Initial expenses: $168,000 down payment, no closing, $30,000 repairs, $27,000 six months of mortgage and expenses prior to renting. Total: $225,000
Income: 86 months of $5400/month rent (91 months total rented) Total income: $464,400 realized (491,400 If paid in full) Note: we’ve been provided $5400 rent starting in October 2013, we’ll assume OP is the patron saint of renters and that number has remained static, although he said he raised it. OP said they’ve been dragging ass for 5 months, not sure what percentage of rent paid dragging ass qualifies under so I just took out 5,400x5.
As you can see I plugged in conservative numbers. I went with the homes assessment as $700,000 for property tax with a 1% tax rate for $7k/year, depending on where it is and assessed value I’d bet that’s close to the current rate and not the starting one in 2013. Homeowners insurance at $3000/year. No HOA was mentioned. I’m assuming no PMI with 25% down, assessed value, and OPs undoubtedly good credit.
That gives us $3,152 as the monthly payment. I’ll add in maintenance at 25% of monthly rent for $4,500 of total expense/month.
At $5,400 revenue/month with $4500 expenses, a profit of $900 month. That’s a bit more than $100 month. $81,900 to date if realized for 91 months.
Five months of unpaid rent is a loss of $22,385 for $59,515 made from rental profit.
Let’s calculate the principal of the loan paid and appreciation profit next.
The amortization table shows us there is $417,375 remaining on the loan. $88,675 of the $506,000 principal has been paid off. That’s your profit before appreciation.
Appreciation: as I looked up earlier, the sale price of the median home in King Co went up ~90% over that time span. Let’s go ultra conservative and cut it in half, 45%. A quick look at homes for sale and their historical sales price says that 45% is incredibly low but I’m using it to prove a point. That would be $303,750 if $675,000 was the sale price in April 2013. (If using 90% the appreciation is $607,500)
Rental profit: $59,515 Principal paid off: $88,675 Appreciation: $303,750 Fed cap gains: -? Total: $451,890
An initial investment of $225,000 created $451,890 of profit over 91 months under a very conservative scenario. That’s about $5,000 for every month of ownership. The increase in home value is responsible for 2/3 of that, but even with that removed it would be ~$1,650 per month.
Note: I don’t have enough info to figure out OPs capital gains tax, and what I read real estate is exempt from Washington’s tax, if it is upheld as constitutional it goes into effect in 2022 and OP is selling now. I didn’t bother with inflation.
This is the only @TheChart that I’m aware of, and it’s the only one that matters. He needs to do real estate markets next, make sure the 2022 recruits get it.
Huh. Kind of shocked that the median income in Los Angeles County would be lower than King County. I looked it up, though, and it is.
LA County has more homeless fucks than King County.
It appears you most certainly did make money as a landlord. Correct me if I’m wrong:
With the numbers you provided it appears you’re almost $100k into the mortgage, a ROI of 5.75% - that’s assuming you made no profit from rent, just breaking even. A $100/month profit takes that to 6% ROI.
That’s not including the appreciation, which I’m sure is significant. In the Seattle area for that time span it’s a ~90% increase for the median home. Even half of that isn’t too bad, where else are you getting that kind of investment with 25% down?
$100/mo "profit" doesn't even cover maintenance. Also, property taxes continue to increase, etc. The biggest factor is how long ago did you buy the property. Otherwise, a lot of landlords are making money on appreciation when selling (btw we now have a capital gains tax which probably gets expanded in the future).
At one point Biden’s campaign website had a piece about doing away with 1031 exchanges. Is that what you’re referencing with the capital gains tax?
No, WA State legislature enacted a 7% cap gains tax. 1031-exchange is a way to defer taxes in to a new property. But yeah, Biden wants to do away with that.
It appears you most certainly did make money as a landlord. Correct me if I’m wrong:
With the numbers you provided it appears you’re almost $100k into the mortgage, a ROI of 5.75% - that’s assuming you made no profit from rent, just breaking even. A $100/month profit takes that to 6% ROI.
That’s not including the appreciation, which I’m sure is significant. In the Seattle area for that time span it’s a ~90% increase for the median home. Even half of that isn’t too bad, where else are you getting that kind of investment with 25% down?
$100/mo "profit" doesn't even cover maintenance. Also, property taxes continue to increase, etc. The biggest factor is how long ago did you buy the property. Otherwise, a lot of landlords are making money on appreciation when selling (btw we now have a capital gains tax which probably gets expanded in the future).
Do you know what the word profit means?
Nobody smart is being a landlord to make $100 a month. The amount of risk involved...come on dude. I know the industry inside and out and worked in it for many years.
I’m curious which part of what industry you know inside and out. Because I think you’re missing the boat/train/short bus here.
Why the fuck did I write this out? Because I’m an idiot, that’s why. TLDR: OP made a lot of money.
I’ll let you in on a secret: the $100 month profit was a placeholder for my very rough example estimate. It was just the number necessary to bump it up to a 6% annualized ROI when combined with how much of the principal has been paid off.
The $100 a month “profit“ (let’s call it X) is not the only source of gain. Equity (principal + appreciation) is the other. If you owned the house outright, let’s say you inherited it, then $100 a month wouldn’t be very smart. But that’s not the case now, is it?
The mortgage + maintenance expenses + insurance + property tax is being paid by rent. However much of the principal is paid off + appreciation is your equity. The $X/month is what is left over for your cash profit.
We can calculate some better info with the provided numbers. We’ll go extremely conservative so I can’t be accused of being sugary.
Initial expenses: $168,000 down payment, no closing, $30,000 repairs, $27,000 six months of mortgage and expenses prior to renting. Total: $225,000
Income: 86 months of $5400/month rent (91 months total rented) Total income: $464,400 realized (491,400 If paid in full) Note: we’ve been provided $5400 rent starting in October 2013, we’ll assume OP is the patron saint of renters and that number has remained static, although he said he raised it. OP said they’ve been dragging ass for 5 months, not sure what percentage of rent paid dragging ass qualifies under so I just took out 5,400x5.
As you can see I plugged in conservative numbers. I went with the homes assessment as $700,000 for property tax with a 1% tax rate for $7k/year, depending on where it is and assessed value I’d bet that’s close to the current rate and not the starting one in 2013. Homeowners insurance at $3000/year. No HOA was mentioned. I’m assuming no PMI with 25% down, assessed value, and OPs undoubtedly good credit.
That gives us $3,152 as the monthly payment. I’ll add in maintenance at 25% of monthly rent for $4,500 of total expense/month.
At $5,400 revenue/month with $4500 expenses, a profit of $900 month. That’s a bit more than $100 month. $81,900 to date if realized for 91 months.
Five months of unpaid rent is a loss of $22,385 for $59,515 made from rental profit.
Let’s calculate the principal of the loan paid and appreciation profit next.
The amortization table shows us there is $417,375 remaining on the loan. $88,675 of the $506,000 principal has been paid off. That’s your profit before appreciation.
Appreciation: as I looked up earlier, the sale price of the median home in King Co went up ~90% over that time span. Let’s go ultra conservative and cut it in half, 45%. A quick look at homes for sale and their historical sales price says that 45% is incredibly low but I’m using it to prove a point. That would be $303,750 if $675,000 was the sale price in April 2013. (If using 90% the appreciation is $607,500)
Rental profit: $59,515 Principal paid off: $88,675 Appreciation: $303,750 Fed cap gains: -? Total: $451,890
An initial investment of $225,000 created $451,890 of profit over 91 months under a very conservative scenario. That’s about $5,000 for every month of ownership. The increase in home value is responsible for 2/3 of that, but even with that removed it would be ~$1,650 per month.
Note: I don’t have enough info to figure out OPs capital gains tax, and what I read real estate is exempt from Washington’s tax, if it is upheld as constitutional it goes into effect in 2022 and OP is selling now. I didn’t bother with inflation.
This is the only @TheChart that I’m aware of, and it’s the only one that matters. He needs to do real estate markets next, make sure the 2022 recruits get it.
Huh. Kind of shocked that the median income in Los Angeles County would be lower than King County. I looked it up, though, and it is.
TLDR: bottom 50% of LA is pour *pour* while King County’s bottom 50% are just one pour.
A lot of LA County is poverty. Most of King County is not. Orange County is more along the lines of what people think about LA and income, as Orange County is wealthier by any measure, while having a million more people.
I’ll touch on it later, but income statistics are shit. The only thing dumber than them is making that chart and tagging recruits in it. Counties, cities, zip codes, federal statistical areas, those will all yield different numbers.
It still looks like a bigger disparity than it should be. I’ll give two factors other than pour/not pour that contribute: demographics, and skewed distribution.
1. Demographics, courtesy of census dot gov
Percent of civilians 16+ in work force: LA County: 64% King County: 70% 2+ million people not in the workforce. That’ll throw the ol’ median off. Orange County is at 66% and has a higher median income than King County.
Hispanic or Latino LA County: 49% King County: 10%
Data from Wikipedia, median income: Hispanic or Latino: $51.4k White: $65.7k
From Pew-Pew:
Other notes:
* DataDoog forgot to adjust the income chart for the recruits race and education level. He just sent them a graph basically saying King County has a higher rate of white people who are HS graduates and/or college educated, come entertain me with football.
* Asians in LA County, which are statistically higher income than any other ethnicity in the rest of CA, earn 2/5 less than Asians in the rest of California. I’m not going to delve into the difference between SE Asian and East Asian population differences in LA vs Seattle vs the Bay but I’m assuming the reader will know the difference.
* Somewhat relevant: 20% of income in the US goes to 1% of the population.
* There’s no reliable measure of income by city or region. It’s nearly impossible. One statistic will have San Jose/Sunnyvale number one, another will have it 35th if adjusted. In some Seattle and Portland are top-10, in others they’re behind Detroit and Orlando despite having $20k more per capita income.
* Average home sale prices are higher in LA County. Home ownership rate in LA is 40% and King County is 60%. That’s indicative of factor #2 -
2. Skewed distribution
A nice way of saying US income inequality. LA County demonstrates that to the extreme, while income is always skewed to the right it will make the median less reflective of total wealth when the numbers are more skewed.
The mean of the top-20% is almost identical. But at the 4th quintile the gap gets bigger. When you get to the people who are in the bottom 25-50% of income the gap between King and LA is close to double. At 4x the population that will destroy your median.
It appears you most certainly did make money as a landlord. Correct me if I’m wrong:
With the numbers you provided it appears you’re almost $100k into the mortgage, a ROI of 5.75% - that’s assuming you made no profit from rent, just breaking even. A $100/month profit takes that to 6% ROI.
That’s not including the appreciation, which I’m sure is significant. In the Seattle area for that time span it’s a ~90% increase for the median home. Even half of that isn’t too bad, where else are you getting that kind of investment with 25% down?
$100/mo "profit" doesn't even cover maintenance. Also, property taxes continue to increase, etc. The biggest factor is how long ago did you buy the property. Otherwise, a lot of landlords are making money on appreciation when selling (btw we now have a capital gains tax which probably gets expanded in the future).
At one point Biden’s campaign website had a piece about doing away with 1031 exchanges. Is that what you’re referencing with the capital gains tax?
No, WA State legislature enacted a 7% cap gains tax. 1031-exchange is a way to defer taxes in to a new property. But yeah, Biden wants to do away with that.
It appears you most certainly did make money as a landlord. Correct me if I’m wrong:
With the numbers you provided it appears you’re almost $100k into the mortgage, a ROI of 5.75% - that’s assuming you made no profit from rent, just breaking even. A $100/month profit takes that to 6% ROI.
That’s not including the appreciation, which I’m sure is significant. In the Seattle area for that time span it’s a ~90% increase for the median home. Even half of that isn’t too bad, where else are you getting that kind of investment with 25% down?
$100/mo "profit" doesn't even cover maintenance. Also, property taxes continue to increase, etc. The biggest factor is how long ago did you buy the property. Otherwise, a lot of landlords are making money on appreciation when selling (btw we now have a capital gains tax which probably gets expanded in the future).
Do you know what the word profit means?
Nobody smart is being a landlord to make $100 a month. The amount of risk involved...come on dude. I know the industry inside and out and worked in it for many years.
I’m curious which part of what industry you know inside and out. Because I think you’re missing the boat/train/short bus here.
Why the fuck did I write this out? Because I’m an idiot, that’s why. TLDR: OP made a lot of money.
I’ll let you in on a secret: the $100 month profit was a placeholder for my very rough example estimate. It was just the number necessary to bump it up to a 6% annualized ROI when combined with how much of the principal has been paid off.
The $100 a month “profit“ (let’s call it X) is not the only source of gain. Equity (principal + appreciation) is the other. If you owned the house outright, let’s say you inherited it, then $100 a month wouldn’t be very smart. But that’s not the case now, is it?
The mortgage + maintenance expenses + insurance + property tax is being paid by rent. However much of the principal is paid off + appreciation is your equity. The $X/month is what is left over for your cash profit.
We can calculate some better info with the provided numbers. We’ll go extremely conservative so I can’t be accused of being sugary.
Initial expenses: $168,000 down payment, no closing, $30,000 repairs, $27,000 six months of mortgage and expenses prior to renting. Total: $225,000
Income: 86 months of $5400/month rent (91 months total rented) Total income: $464,400 realized (491,400 If paid in full) Note: we’ve been provided $5400 rent starting in October 2013, we’ll assume OP is the patron saint of renters and that number has remained static, although he said he raised it. OP said they’ve been dragging ass for 5 months, not sure what percentage of rent paid dragging ass qualifies under so I just took out 5,400x5.
As you can see I plugged in conservative numbers. I went with the homes assessment as $700,000 for property tax with a 1% tax rate for $7k/year, depending on where it is and assessed value I’d bet that’s close to the current rate and not the starting one in 2013. Homeowners insurance at $3000/year. No HOA was mentioned. I’m assuming no PMI with 25% down, assessed value, and OPs undoubtedly good credit.
That gives us $3,152 as the monthly payment. I’ll add in maintenance at 25% of monthly rent for $4,500 of total expense/month.
At $5,400 revenue/month with $4500 expenses, a profit of $900 month. That’s a bit more than $100 month. $81,900 to date if realized for 91 months.
Five months of unpaid rent is a loss of $22,385 for $59,515 made from rental profit.
Let’s calculate the principal of the loan paid and appreciation profit next.
The amortization table shows us there is $417,375 remaining on the loan. $88,675 of the $506,000 principal has been paid off. That’s your profit before appreciation.
Appreciation: as I looked up earlier, the sale price of the median home in King Co went up ~90% over that time span. Let’s go ultra conservative and cut it in half, 45%. A quick look at homes for sale and their historical sales price says that 45% is incredibly low but I’m using it to prove a point. That would be $303,750 if $675,000 was the sale price in April 2013. (If using 90% the appreciation is $607,500)
Rental profit: $59,515 Principal paid off: $88,675 Appreciation: $303,750 Fed cap gains: -? Total: $451,890
An initial investment of $225,000 created $451,890 of profit over 91 months under a very conservative scenario. That’s about $5,000 for every month of ownership. The increase in home value is responsible for 2/3 of that, but even with that removed it would be ~$1,650 per month.
Note: I don’t have enough info to figure out OPs capital gains tax, and what I read real estate is exempt from Washington’s tax, if it is upheld as constitutional it goes into effect in 2022 and OP is selling now. I didn’t bother with inflation.
This is the only @TheChart that I’m aware of, and it’s the only one that matters. He needs to do real estate markets next, make sure the 2022 recruits get it.
Comments
Upfront cash invested
$168,000 Down
$30,000 repairs and upgrades - Took about 6 months (numbers taken would have done it in a weekend)
Signed my first lease in October of 2013 for $5400
all the down payment was from a 2nd on my primary that is now down to $65,000 - This is where it gets convoluted because I haven't been paying down that second all the time. Some of the time I was dumping the money into fixing up other properties so it is tough nail down a true rate of return but it was good.
That is the cautionary part> Where I screwed up is I got greedy. I told the tenants: Hey look, you decide who you live with and it worked for me in the sense that this will be the first month that I won't get rent. I would sign a new lease every six months with some new people but most of the same people. Eventually everyone had cycled out and I have a group of people that I havent vetted at all. In hindsight a very bone headed move by me.
Looking at selling is what is making me wonder if you can still make money landlording. At the prices today I am almost exclusively shaking my head no. There is also an emotional element to it. I doubt I am the only one that burns at feeling like I am being taken advantage of. I will take a listen to the self storage pod. Thank you for the link.
I was just pointing out that even considering the recent developments with rent moratoriums and your own invested labor you’re still coming out with a healthy profit. The current climate is not good for those landlords who depend on rent as monthly income, but the rapid real estate appreciation combined with inflation that helps the borrower is also a good climate - is it not?
I have skin in the game, but thankfully not residential. The cell phone tower pays its bills, almost a perfect tenant. My potential future FIL however really got it, commercial properties where the tenants made no money for a long time as they couldn’t be open. He got some funds earlier from a private organization that gave some tenants a grant for BIPOC owned businesses. Just recently some state money rolled in that the Feds funneled in.
He still made money based on appreciation. Although the cash flow wasn’t there. People tend to make the mistake of thinking of property like they do a vending machine.
It really does suck to know that there are plenty of unethical tenants taking advantage of the situation. That’s human nature. There are unscrupulous landlords as well, although in my experience it’s mostly the tenants who wrong their LL. It just sucks more when you’re on the the receiving end.
My original reply had some anecdotes from my land-lording experiences. From the time I could drive my dad had me go collect past due rent, fix things or call the appropriate people to do so, etc. My most memorable was authorizing thousands in repairs to the plumbing because the single mother who lived there had one of her too many children flush happy meal toys down the toilet like a future sociopath. She denied it was them, although the toys were promotional for movies that had recently been released, and the previous tenant was an old man who also died several years prior, making him an unlikely suspect.
For the future, there’s going to be money in it. Pandemic lost income affidavits aren’t going to exist forever and people need shelter. The mom and pops need to be smart, over extend yourself and you could wind up in trouble. That’s true for any business, any investment.
Why the fuck did I write this out? Because I’m an idiot, that’s why. TLDR: OP made a lot of money.
I’ll let you in on a secret: the $100 month profit was a placeholder for my very rough example estimate. It was just the number necessary to bump it up to a 6% annualized ROI when combined with how much of the principal has been paid off.
The $100 a month “profit“ (let’s call it X) is not the only source of gain. Equity (principal + appreciation) is the other. If you owned the house outright, let’s say you inherited it, then $100 a month wouldn’t be very smart. But that’s not the case now, is it?
The mortgage + maintenance expenses + insurance + property tax is being paid by rent. However much of the principal is paid off + appreciation is your equity. The $X/month is what is left over for your cash profit.
We can calculate some better info with the provided numbers. We’ll go extremely conservative so I can’t be accused of being sugary.
Initial expenses: $168,000 down payment, no closing, $30,000 repairs, $27,000 six months of mortgage and expenses prior to renting.
Total: $225,000
Income: 86 months of $5400/month rent (91 months total rented)
Total income: $464,400 realized (491,400 If paid in full)
Note: we’ve been provided $5400 rent starting in October 2013, we’ll assume OP is the patron saint of renters and that number has remained static, although he said he raised it. OP said they’ve been dragging ass for 5 months, not sure what percentage of rent paid dragging ass qualifies under so I just took out 5,400x5.
As you can see I plugged in conservative numbers. I went with the homes assessment as $700,000 for property tax with a 1% tax rate for $7k/year, depending on where it is and assessed value I’d bet that’s close to the current rate and not the starting one in 2013. Homeowners insurance at $3000/year. No HOA was mentioned. I’m assuming no PMI with 25% down, assessed value, and OPs undoubtedly good credit.
That gives us $3,152 as the monthly payment. I’ll add in maintenance at 25% of monthly rent for $4,500 of total expense/month.
At $5,400 revenue/month with $4500 expenses, a profit of $900 month. That’s a bit more than $100 month. $81,900 to date if realized for 91 months.
Five months of unpaid rent is a loss of $22,385 for $59,515 made from rental profit.
Let’s calculate the principal of the loan paid and appreciation profit next.
The amortization table shows us there is $417,375 remaining on the loan. $88,675 of the $506,000 principal has been paid off. That’s your profit before appreciation.
Appreciation: as I looked up earlier, the sale price of the median home in King Co went up ~90% over that time span. Let’s go ultra conservative and cut it in half, 45%. A quick look at homes for sale and their historical sales price says that 45% is incredibly low but I’m using it to prove a point. That would be $303,750 if $675,000 was the sale price in April 2013.
(If using 90% the appreciation is $607,500)
Rental profit: $59,515
Principal paid off: $88,675
Appreciation: $303,750
Fed cap gains: -?
Total: $451,890
An initial investment of $225,000 created $451,890 of profit over 91 months under a very conservative scenario. That’s about $5,000 for every month of ownership. The increase in home value is responsible for 2/3 of that, but even with that removed it would be ~$1,650 per month.
Note: I don’t have enough info to figure out OPs capital gains tax, and what I read real estate is exempt from Washington’s tax, if it is upheld as constitutional it goes into effect in 2022 and OP is selling now. I didn’t bother with inflation.
@CFetters_Nacho_Lover
@GrundleStiltzkin
@creepycoug
This is the only @TheChart that I’m aware of, and it’s the only one that matters. He needs to do real estate markets next, make sure the 2022 recruits get it.
A lot of LA County is poverty. Most of King County is not. Orange County is more along the lines of what people think about LA and income, as Orange County is wealthier by any measure, while having a million more people.
I’ll touch on it later, but income statistics are shit. The only thing dumber than them is making that chart and tagging recruits in it. Counties, cities, zip codes, federal statistical areas, those will all yield different numbers.
It still looks like a bigger disparity than it should be. I’ll give two factors other than pour/not pour that contribute: demographics, and skewed distribution.
1. Demographics, courtesy of census dot gov
Percent of civilians 16+ in work force:
LA County: 64%
King County: 70%
2+ million people not in the workforce. That’ll throw the ol’ median off. Orange County is at 66% and has a higher median income than King County.
Hispanic or Latino
LA County: 49%
King County: 10%
Data from Wikipedia, median income:
Hispanic or Latino: $51.4k
White: $65.7k
From Pew-Pew:
Other notes:
* DataDoog forgot to adjust the income chart for the recruits race and education level. He just sent them a graph basically saying King County has a higher rate of white people who are HS graduates and/or college educated, come entertain me with football.
* Asians in LA County, which are statistically higher income than any other ethnicity in the rest of CA, earn 2/5 less than Asians in the rest of California. I’m not going to delve into the difference between SE Asian and East Asian population differences in LA vs Seattle vs the Bay but I’m assuming the reader will know the difference.
* Somewhat relevant: 20% of income in the US goes to 1% of the population.
* There’s no reliable measure of income by city or region. It’s nearly impossible. One statistic will have San Jose/Sunnyvale number one, another will have it 35th if adjusted. In some Seattle and Portland are top-10, in others they’re behind Detroit and Orlando despite having $20k more per capita income.
* Average home sale prices are higher in LA County. Home ownership rate in LA is 40% and King County is 60%. That’s indicative of factor #2 -
2. Skewed distribution
A nice way of saying US income inequality. LA County demonstrates that to the extreme, while income is always skewed to the right it will make the median less reflective of total wealth when the numbers are more skewed.
The mean of the top-20% is almost identical. But at the 4th quintile the gap gets bigger. When you get to the people who are in the bottom 25-50% of income the gap between King and LA is close to double. At 4x the population that will destroy your median.
@DJDuck