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[ Follow Ups ] [ Post Followup ] [ The Forum Board ] [ FAQ ] Re: Dingbat Retirement Plan Posted by Ron on November 05, 2001 at 5:38 PM In Reply to: Dingbat Retirement Plan posted by Jeeti Puri on November 05, 2001 at 4:41 PM Jeeti, 1) Don't forget about the depreciation benefit. 2) Also, over the course of time your tenant will be paying for the condo. Eventually your condo will be free and clear and most of the rent will go straight toward your bottom line. 3) And, your rental income will rise through the years so you'll have a positive cash flow eventually as well. I'm sure Ward will be able to better answer your question seeing (as I figure it) he probably owns half of San Diego from his real estate endeavors. : Prof. Ward : : Thx much for your wisdom, time, patience and education. It is appreciated. You are clearly a very learned person in this speciality. : I am based in West Palm Beach, FL.. 'Was thinking of buying 2 bedroom fixer-upper condos, attached homes, or SFRs for renting out after fixing. Unfortunately the economics looks like this : : Purchase Price = $ 60,000 : Fix-Up Cost = $ 20,000 : Cost of financing $ 80,000 @ 7.5 % = $ 500 / Month : Property Tax @ 2.xx % = $ 135 / Month : Insurance including Hurricanes = $ 50 / Month : Repairs - approximated = $ 50 / Month : TOTAL Monthly Cost = $ 735 / Month : Rent assuming 15 days Vacancy / Yr = $ 735 / Month : Without even considering all the many risks associated with renting, ownership, etc. inherent in this business, the investment will yield ZERO return. Future rent increase expectations are minimal - maybe 0-2 % / year at best, given the demand and supply of such condos / SFRs expected in the future. : Therefore the only reason to invest will be to gamble on future price increases. Such condos/homes have essentially gone nowhere in price in the past 20 years. Matter-of-fact many have gone down in price, despite the past 2 years where there was some upward momentum in prices !! : ONE bedroom fixer-upper condos can be gotten for $ 20-40,000 in cheaper less-desirable neighborhoods. But their economics works out the same as above - lesser cost and lesser rents, with ZERO return. : Please could you kindly advise if this business plan can somehow be worked out to yield meaningfully positive returns comparable to the underlying risks in this business. : Thanks much for your advice and time. It is sincerely appreciated. : Follow Ups: Post a Followup: Name : E-Mail : Subject : Comments: : Jeeti, : 1) Don't forget about the depreciation benefit. : 2) Also, over the course of time your tenant will be paying for the condo. Eventually your condo will be free and clear and most of the rent will go straight toward your bottom line. : 3) And, your rental income will rise through the years so you'll have a positive cash flow eventually as well. : I'm sure Ward will be able to better answer your question seeing (as I figure it) he probably owns half of San Diego from his real estate endeavors. : : Prof. Ward : : : Thx much for your wisdom, time, patience and education. It is appreciated. You are clearly a very learned person in this speciality. : : I am based in West Palm Beach, FL.. 'Was thinking of buying 2 bedroom fixer-upper condos, attached homes, or SFRs for renting out after fixing. Unfortunately the economics looks like this : : : Purchase Price = $ 60,000 : : Fix-Up Cost = $ 20,000 : : Cost of financing $ 80,000 @ 7.5 % = $ 500 / Month : : Property Tax @ 2.xx % = $ 135 / Month : : Insurance including Hurricanes = $ 50 / Month : : Repairs - approximated = $ 50 / Month : : TOTAL Monthly Cost = $ 735 / Month : : Rent assuming 15 days Vacancy / Yr = $ 735 / Month : : Without even considering all the many risks associated with renting, ownership, etc. inherent in this business, the investment will yield ZERO return. Future rent increase expectations are minimal - maybe 0-2 % / year at best, given the demand and supply of such condos / SFRs expected in the future. : : Therefore the only reason to invest will be to gamble on future price increases. Such condos/homes have essentially gone nowhere in price in the past 20 years. Matter-of-fact many have gone down in price, despite the past 2 years where there was some upward momentum in prices !! : : ONE bedroom fixer-upper condos can be gotten for $ 20-40,000 in cheaper less-desirable neighborhoods. But their economics works out the same as above - lesser cost and lesser rents, with ZERO return. : : Please could you kindly advise if this business plan can somehow be worked out to yield meaningfully positive returns comparable to the underlying risks in this business. : : Thanks much for your advice and time. It is sincerely appreciated. : : Optional Link URL: Link Title: Optional Image URL: [ Follow Ups ] [ Post Followup ] [ The Forum Board ] [ FAQ ] WWWAdmin 2.0a © 1997 Matt Wright and DBasics Software Company, All Rights Reserved

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