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First Time Home Buyers – Where To Start?
So you want to buy a home? Statistics show that more and more young single people are buying homes. With mortgage rates at an all time low, more programs to assist first time homebuyers, and lots of homes on the market to choose from; it doesn’t make ...
Is Wholesaling Better Than Rehabbing Real Estate
I look at real estate like a triangle. On one side of the triangle we have rehabs, on the next side we have rentals and on the last side we have wholesaling. I think wholesaling is the bottom side of the triangle, the foundation. That foundation is what ...
Mobile Home Parks - The Bubble Proof Real Estate Investment
This country has experienced unprecedented gains in housing prices over the past five years. With some regional markets expanding at a phenomenal 25% annual average, the investors who got in early have created tremendous wealth. However, in my opinion, ...
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Don't get me wrong. I'm not talking about those who live in rent-controlled apartments because they cannot afford to move; I'm referring to the thousands of well-heeled ones. The affluent --with greater job stability—move less frequently than the needy, thus retain the treasured units. Those who can least afford it must re-rent at higher rates.
I stumbled upon this "housing disorder" as a Los Angeles Realtor, when encountering dozens of well-to-do Westsiders tucked away in dilapidated rent-controlled apartments, determined to stay for the appealing price tags. Landlords have no incentive to make improvements when they collect rents below market-rate.
It didn't matter that these tenants had higher incomes than their landlords, qualified three times over for a loan, or possessed the down payment to purchase rentals of their own. It didn't even matter that they were losing thousands of dollars in tax write-offs and hundreds of thousands in equity. They were proud bingo winners, and under no circumstances would they sacrifice that for a bigger pot.
Three years ago, I almost convinced Anne to buy. She was living in a $509 per month rental in West L.A., having assumed a new identity in order to dupe the building's owner. He still thought Gwendolyn--who lived there prior to James, Henry, Erica and now Anne —was the tenant. Most L.A. landlords cannot raise the rent more than three percent a year until the unit becomes
vacant; and some tenants succeed in pretending they are someone else just to keep the price low.
Anne refused to buy the $280,000 townhouse in Burbank we had selected for her purchase. First, it was in the Valley, and many Westsiders have convulsions about investing "over the hill." Secondly, she planned to put tenants in her new place, but worried that they couldn't be trusted.
"Now why would you think that, Gwendolyn? Sorry, I mean Anne."
That townhouse is now worth $550,000, a loss of $270,000 in equity, and her apartment—where she remains a psychological prisoner--has saved her a grand total of $18,000.
To date, Lindy is the only "rent control client" who has closed an escrow with me. In 1993, she agreed to abandon her unit in Santa Monica in order to buy a six bedroom, tennis court estate for $600,000. To afford the mortgage, she rented rooms, transforming the property into a virtual dormitory. The income sustained her unemployed status until 2004 when she sold the property for $1.8 million.
Property values have risen an average of 425% in California since 1980 and 115% in Los Angeles since 2000. If you have the means, escape the "perpetual tenant syndrome" and enter the rent control rehab program before it's too late.
Got property?
About The Author
Charlotte Laws is a member of the Greater Valley Glen Council, a Realtor and an author. Her websites are www.CharlotteLaws.org and www.YourTopBroker.com. Her Blog is http://charlottelaws.typepad.com.
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SF's diverse real estate frenzy expected to lastSan Francisco ChronicleHow much hotter is the San Francisco real estate market getting? Let us count the ways. -- Office buildings: The 33-story tower at 555 Mission St. is in escrow. Reported price: $450 million. That's about $800 per square foot - the highest figure since ...and more » |
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Commercial real estate services expanding in USReutersBy Ilaina Jonas | NEW YORK (Reuters) - New commercial real estate brokerages are launching in the United States, in what may be a sign that the market's recovery is durable. Australia's UGL Ltd (UGL.AX), a huge property manager, plans to expand in the ...and more » |
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