BiggerPockets

http://realestate.msn.com/slideshow.aspx?cp-documentid=23517536&GT1=35000#1

Rents are dropping to ridiculous levels and hard to make sense of overall investments from a rental standpoint. Don't count on rents INCREASING in these areas to substantiate a high purcahse price. They may continue dropping. I was surprised by # 1 but not Vegas and Phoenix. Rich

Jim,
I understand rebates and I consider them as an extra or bonus, not considered in analysis. I bought 154 units in Dallas 6 months ago. It had to stand on its' own as an investment. THEN, i applied for the WAP (weatherization assistance program ) of $6500 per unit based on tenants income. It looks like I'll get that for about 120 units. This will be a tremendous BONUS, but the property is 98% occupied and throwing off nice cash each month.
I still worry about average rents in the 700 range. If that goes lower, it won't work, imo. Rich

Mike,
I'm not bullish on any area to buy in currently. It is interesting that not one SINGLE BP member has joined this thread and disagreed in the bad rental areas in Vegas, AZ etc. That confirms the Realty Trac info, imo.
BTW, I haven't had to drop any rents in TX, if that means anything. And, I'm 98% full in apts and 100% full in SFRS. Rich

It is interesting that not one SINGLE BP member has joined this thread and disagreed in the bad rental areas in Vegas, AZ etc. That confirms the Realty Trac info, imo.

I bought a $42k 3/2 SFR in Vegas ... found a tenant last month after a two month search. Vegas seems to remain a hotbed for investors as the sub $50k 3/2 SFR appears non-existent .... I can see rents softening as investors continue to buy up all the REO's. I'm probably like most Vegas investors who like both the cashflow and potential appreciation because of the city's desirability with no state income taxes, weather, world-class amenities, etc. But I agree with you Rich, finding good tenants paying nice rents is a valid concern.

Ted- 2 month search to find a tenant! Yuk! What did it finally rent for? The Realty Trac info showed a very low average for Vegas. Was this North Vegas?

Eddie- You confirmed my research. TEXAS is GOOD!! I'm increasing my rents on all SFRS in TX. You also confirm the point in the article with your LA info. Rich

I probably have you all beat. I have a house in Visalia, California, been vacant since Summer, 2008. I am currently on my third property management company. This third one is working very hard, but it is in a gang infested area. Was a nice family neighborhood when I bought 15 years ago, it just went down hill with the economy.

On the upside, my Texas properties are rented and rent in less than 30 days when vacant. On the downside, it takes 3 months rent just to pay the property taxes.

I have a duplex unit in Southwest Colorado, one unit has been vacant since December, but when the snow is piled higher than the windows, it is just a bad time to rent. Also, being on a golf course with no fence, we cannot allow pets or it would have rented in a week.

I have two properties for sale in Southern California, and when they sell, I will be looking for new investments. This time, I want to get the "Two Percent" rule fulfilled, so I am starting my research. I will be buying with 50% down and getting a 50% mortgage. So I will be looking for homes and financing. With a credit score of 815, financing shouldn't be a problem.

On the upside, my Texas properties are rented and rent in less than 30 days when vacant. On the downside, it takes 3 months rent just to pay the property taxes.

wow, property taxes are crazy high in tx ... mine is more than covered with first month's rent.

Rich
What would that $140K home rent for? I bought one in Arlington last year for $142K and it rents for $1,275 a month. Property tax for 2009 was $3,876.00. You are right about the insurance, it was only $713.00 for 2009. Repairs are also quite low, I had a French Drain installed last year from the back yard to the front, and total cost was $800.00. Locally, I had an estimate of $3,000.00 for the same thing on my home here in Colorado.

I just wish there was a place in Texas that I could get 2% rental income. I would even be happy with 1.5%.

Rich
I love your term 'non ghetto' because that is the way I like to lean as well. While there is money to be made with the 'low income' housing, it really is not my preference. Some of my rentals have turned that way, which does not make me happy, but what can you do?

I am wondering if anyone thinks that the Vegas or Phoenix market will turn around anytime soon (1-3 years)? I think those markets will be worth keeping an eye on from 2013 to 2015.

Ted- you are bullish on Vegas-and I'm not. Check realtor.com. Currently 145 3br under 40K. If you check up to 45K, there are 252, and if you go up to 50K, there are still over 400!!
That is not what worries me. This is:

http://www.msnbc.msn.com/id/35832152/ns/business-washington_post/page/2/

I've always compared Phonix and Vegas are comparable. The last part of this article may be worth reading.... This article makes me still concerned and leaves me worried that the second blast from this 2 barrelled shotgun COULD be as bad as the first, due to lack of loans available and these are NOT subprime loans that are in trouble. Rich