Smokies: The juice still isn't worth the squeeze
Collin HaysBusiness Member
Property Manager · Gatlinburg, TN · Member since 2020 · 3k+ posts · 4k+ votesSmokies: The juice still isn't worth the squeeze
Most Popular Reply
Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votesQuote from @Collin Hays:
We are seeing asking prices at approximately 10-12X the trailing twelve months rents (only rents). That's too high. This is why there is so much inventory, and so few takers.
My measuring stick is "Would this be a good investment for a cash investor seeking income?" The answer is, not particularly. If I have $500,000 to invest and am looking for income, I can draw around 4 percent from a high yield money market brokerage account through Schwab or Fidelity. That's $20,000 a year without lifting a finger.
If I take my $500,000 and invest in a Smokies cabin earning $50,000 a year, I am buying a part time job and probably only netting $27,000 to $29,000 per year after the following expenses:
Insurance - $3500 per year
Taxes - $2000 per year
Utilities - $6000 per year
Repairs & Maintenace - $7500 per year
HOA fees - $2000-3000 per year.
Total expenses: $21,000-$23,000 per year
If I can earn $20,000 per year on my $500,000 with virtually no risk and no effort, versus another $6-8K for much more risk and headache, the juice isn't worth the squeeze.
wow Property tax's only 2k a year on a 500k asset thats really really low..
52 Replies
- 1yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @Collin Hays:
We are seeing asking prices at approximately 10-12X the trailing twelve months rents (only rents). That's too high. This is why there is so much inventory, and so few takers.
My measuring stick is "Would this be a good investment for a cash investor seeking income?" The answer is, not particularly. If I have $500,000 to invest and am looking for income, I can draw around 4 percent from a high yield money market brokerage account through Schwab or Fidelity. That's $20,000 a year without lifting a finger.
If I take my $500,000 and invest in a Smokies cabin earning $50,000 a year, I am buying a part time job and probably only netting $27,000 to $29,000 per year after the following expenses:
Insurance - $3500 per year
Taxes - $2000 per year
Utilities - $6000 per year
Repairs & Maintenace - $7500 per year
HOA fees - $2000-3000 per year.
Total expenses: $21,000-$23,000 per year
If I can earn $20,000 per year on my $500,000 with virtually no risk and no effort, versus another $6-8K for much more risk and headache, the juice isn't worth the squeeze.
wow Property tax's only 2k a year on a 500k asset thats really really low..- Rental Property Investor · New Braunfels, TX · Member since 2021 · 289 posts · 256 votes1yYeah, I would kill for that property tax rate. We are paying $13K per year for two lots on Lake Placid in McQueeney Texas that are worth about $1Mil combined and the dam is broke so we haven't had a lake for over 3 years....
Quote from @Jay Hinrichs:
- 1yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @Mike Kirby:
Yeah, I would kill for that property tax rate. We are paying $13K per year for two lots on Lake Placid in McQueeney Texas that are worth about $1Mil combined and the dam is broke so we haven't had a lake for over 3 years....Quote from @Jay Hinrichs:
I did a little lending in the DFW market and prop taxs were eye watering.. and I think one reason keeps the values somewhat in check compared to other quality markets. - Member since 2022 · 1k+ posts · 1k+ votes1y
Quote from @Jay Hinrichs:
Quote from @Collin Hays:
We are seeing asking prices at approximately 10-12X the trailing twelve months rents (only rents). That's too high. This is why there is so much inventory, and so few takers.
My measuring stick is "Would this be a good investment for a cash investor seeking income?" The answer is, not particularly. If I have $500,000 to invest and am looking for income, I can draw around 4 percent from a high yield money market brokerage account through Schwab or Fidelity. That's $20,000 a year without lifting a finger.
If I take my $500,000 and invest in a Smokies cabin earning $50,000 a year, I am buying a part time job and probably only netting $27,000 to $29,000 per year after the following expenses:
Insurance - $3500 per year
Taxes - $2000 per year
Utilities - $6000 per year
Repairs & Maintenace - $7500 per year
HOA fees - $2000-3000 per year.
Total expenses: $21,000-$23,000 per year
If I can earn $20,000 per year on my $500,000 with virtually no risk and no effort, versus another $6-8K for much more risk and headache, the juice isn't worth the squeeze.
wow Property tax's only 2k a year on a 500k asset thats really really low..6k prop taxes in Seattle.
- 1yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @Henry T.:
Quote from @Jay Hinrichs:
Quote from @Collin Hays:
We are seeing asking prices at approximately 10-12X the trailing twelve months rents (only rents). That's too high. This is why there is so much inventory, and so few takers.
My measuring stick is "Would this be a good investment for a cash investor seeking income?" The answer is, not particularly. If I have $500,000 to invest and am looking for income, I can draw around 4 percent from a high yield money market brokerage account through Schwab or Fidelity. That's $20,000 a year without lifting a finger.
If I take my $500,000 and invest in a Smokies cabin earning $50,000 a year, I am buying a part time job and probably only netting $27,000 to $29,000 per year after the following expenses:
Insurance - $3500 per year
Taxes - $2000 per year
Utilities - $6000 per year
Repairs & Maintenace - $7500 per year
HOA fees - $2000-3000 per year.
Total expenses: $21,000-$23,000 per year
If I can earn $20,000 per year on my $500,000 with virtually no risk and no effort, versus another $6-8K for much more risk and headache, the juice isn't worth the squeeze.
wow Property tax's only 2k a year on a 500k asset thats really really low..6k prop taxes in Seattle.
OK where do you find 500k props in Seattle proper ??? :) I get it for Tacoma or Olympia. - Member since 2022 · 1k+ posts · 1k+ votes1y
Quote from @Jay Hinrichs:
Quote from @Henry T.:
Quote from @Jay Hinrichs:
Quote from @Collin Hays:
We are seeing asking prices at approximately 10-12X the trailing twelve months rents (only rents). That's too high. This is why there is so much inventory, and so few takers.
My measuring stick is "Would this be a good investment for a cash investor seeking income?" The answer is, not particularly. If I have $500,000 to invest and am looking for income, I can draw around 4 percent from a high yield money market brokerage account through Schwab or Fidelity. That's $20,000 a year without lifting a finger.
If I take my $500,000 and invest in a Smokies cabin earning $50,000 a year, I am buying a part time job and probably only netting $27,000 to $29,000 per year after the following expenses:
Insurance - $3500 per year
Taxes - $2000 per year
Utilities - $6000 per year
Repairs & Maintenace - $7500 per year
HOA fees - $2000-3000 per year.
Total expenses: $21,000-$23,000 per year
If I can earn $20,000 per year on my $500,000 with virtually no risk and no effort, versus another $6-8K for much more risk and headache, the juice isn't worth the squeeze.
wow Property tax's only 2k a year on a 500k asset thats really really low..6k prop taxes in Seattle.
OK where do you find 500k props in Seattle proper ??? :) I get it for Tacoma or Olympia.True, you might find a 750sf war box for $600k White center??. Recently though there is a slow downward creep. We may be seeing a couple 500k pretty soon, but I'll guarantee those prop taxes aint coming down. The county adjusts accordingly.
- 1yJay HurstBusiness MemberLender · Dallas, TX · Member since 2017 · 1k+ posts · 1k+ votes
Quote from @Jay Hinrichs:
Quote from @Mike Kirby:
Yeah, I would kill for that property tax rate. We are paying $13K per year for two lots on Lake Placid in McQueeney Texas that are worth about $1Mil combined and the dam is broke so we haven't had a lake for over 3 years....Quote from @Jay Hinrichs:
I did a little lending in the DFW market and prop taxs were eye watering.. and I think one reason keeps the values somewhat in check compared to other quality markets.But, hey, no income tax so Texas can call itself a low tax state! Have had buyers tell me they moving to Texas to get out of high tax states. Have to break it to them gently.
Hurst Real Estate, INC4.991 Reviews - 1yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votesI have always said texas rentals are for Texas residents :) cant think of anything worse than being a CA resident and a TExas investor:)
Quote from @Jay Hurst:
Quote from @Jay Hinrichs:
Quote from @Mike Kirby:
Yeah, I would kill for that property tax rate. We are paying $13K per year for two lots on Lake Placid in McQueeney Texas that are worth about $1Mil combined and the dam is broke so we haven't had a lake for over 3 years....Quote from @Jay Hinrichs
I did a little lending in the DFW market and prop taxs were eye watering.. and I think one reason keeps the values somewhat in check compared to other quality markets.But, hey, no income tax so Texas can call itself a low tax state! Have had buyers tell me they moving to Texas to get out of high tax states. Have to break it to them gently.
- Investor · Malakoff, TX · Member since 2017 · 2k+ posts · 2k+ votes1y
Quote from @Jay Hurst:
Quote from @Jay Hinrichs:
Quote from @Mike Kirby:
Yeah, I would kill for that property tax rate. We are paying $13K per year for two lots on Lake Placid in McQueeney Texas that are worth about $1Mil combined and the dam is broke so we haven't had a lake for over 3 years....Quote from @Jay Hinrichs:
I did a little lending in the DFW market and prop taxs were eye watering.. and I think one reason keeps the values somewhat in check compared to other quality markets.But, hey, no income tax so Texas can call itself a low tax state! Have had buyers tell me they moving to Texas to get out of high tax states. Have to break it to them gently.
They need to buy outside big cities, where prices are 1/2. Also $100k homestead exemption for your residence.
- Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes1y
Quote from @Jay Hinrichs:
I have always said texas rentals are for Texas residents :) cant think of anything worse than being a CA resident and a TExas investor:)Quote from @Jay Hurst:
Quote from @Jay Hinrichs:
Quote from @Mike Kirby:
Yeah, I would kill for that property tax rate. We are paying $13K per year for two lots on Lake Placid in McQueeney Texas that are worth about $1Mil combined and the dam is broke so we haven't had a lake for over 3 years....Quote from @Jay Hinrichs
I did a little lending in the DFW market and prop taxs were eye watering.. and I think one reason keeps the values somewhat in check compared to other quality markets.But, hey, no income tax so Texas can call itself a low tax state! Have had buyers tell me they moving to Texas to get out of high tax states. Have to break it to them gently.
You should check out Minnesota Twin Cities, namely Brooklyn Park in Hennepin county.....
A person doesn't have to choose because they are getting nailed by BOTH high income and property tax's.....
Imagine paying an aggregate ~40% income tax rate AND near 2% property tax...... Well, don't have to imagine anymore, just move on over to Brooklyn Park MN....
- Member since 2020 · 351 posts · 329 votes1y
Quote from @Jay Hurst:
Quote from @Jay Hinrichs:
Quote from @Mike Kirby:
Yeah, I would kill for that property tax rate. We are paying $13K per year for two lots on Lake Placid in McQueeney Texas that are worth about $1Mil combined and the dam is broke so we haven't had a lake for over 3 years....Quote from @Jay Hinrichs:
I did a little lending in the DFW market and prop taxs were eye watering.. and I think one reason keeps the values somewhat in check compared to other quality markets.But, hey, no income tax so Texas can call itself a low tax state! Have had buyers tell me they moving to Texas to get out of high tax states. Have to break it to them gently.
They could always do like Georgia and just give everyone coming through your town a speeding ticket. Even if you successfully fight the $100 ticket, you can't get the $250 in court fees back.
- 1yMichael HaasBusiness MemberReal Estate Agent · Redmond, 🌧️ Seattle Investor-Agent | 🤑 Helped 400+ Clients Invest in Real Estate | 🏘️ Owns 23 WA Rentals & Airbnbs | 🏗️ Built 5 DADU's | 📈 You Can Do It Too · Member since 2016 · 724 posts · 3k+ votes
HouseHack Seattle | Michael Haas & Team572 Reviews
- Member since 2018 · 88 posts · 55 votes1y
Quote from @Collin Hays:
We are seeing asking prices at approximately 10-12X the trailing twelve months rents (only rents). That's too high. This is why there is so much inventory, and so few takers.
My measuring stick is "Would this be a good investment for a cash investor seeking income?" The answer is, not particularly. If I have $500,000 to invest and am looking for income, I can draw around 4 percent from a high yield money market brokerage account through Schwab or Fidelity. That's $20,000 a year without lifting a finger.
If I take my $500,000 and invest in a Smokies cabin earning $50,000 a year, I am buying a part time job and probably only netting $27,000 to $29,000 per year after the following expenses:
Insurance - $3500 per year
Taxes - $2000 per year
Utilities - $6000 per year
Repairs & Maintenace - $7500 per year
HOA fees - $2000-3000 per year.
Total expenses: $21,000-$23,000 per year
If I can earn $20,000 per year on my $500,000 with virtually no risk and no effort, versus another $6-8K for much more risk and headache, the juice isn't worth the squeeze.500k in the smokies should get you more than 50k annually. I think 70-80k annually is more like it from what I am seeing. BUT you are forgetting cleaning, no? A 3br cabin will probably run about 200/ turn and at 6 turns monthly is 1200$ x 12 months is $14,400.
Maintenance I assume includes capex bc I generally average much less than 7500. More like 3k. Utilities depends on if you have a well but if you do its more like 4-4.5k
- Property Manager · Gatlinburg, TN · Member since 2020 · 3k+ posts · 4k+ votes1yI'm all ears on that.
- Member since 2018 · 88 posts · 55 votes1y
Quote from @Collin Hays:
We are seeing asking prices at approximately 10-12X the trailing twelve months rents (only rents). That's too high. This is why there is so much inventory, and so few takers.
My measuring stick is "Would this be a good investment for a cash investor seeking income?" The answer is, not particularly. If I have $500,000 to invest and am looking for income, I can draw around 4 percent from a high yield money market brokerage account through Schwab or Fidelity. That's $20,000 a year without lifting a finger.
If I take my $500,000 and invest in a Smokies cabin earning $50,000 a year, I am buying a part time job and probably only netting $27,000 to $29,000 per year after the following expenses:
Insurance - $3500 per year
Taxes - $2000 per year
Utilities - $6000 per year
Repairs & Maintenace - $7500 per year
HOA fees - $2000-3000 per year.
Total expenses: $21,000-$23,000 per year
If I can earn $20,000 per year on my $500,000 with virtually no risk and no effort, versus another $6-8K for much more risk and headache, the juice isn't worth the squeeze.This is also why generally in RE the game is played with OPM bc most real estate returns are pretty mediocre when all cash is used.
But another factor that is not included in your math is the fact that your property will probably be worth triple in 30 years while your money market account will not
- MD/DC · Member since 2024 · 1k+ posts · 1k+ votes1yTotally agree about OPM and would not park 500,000 in HYSA but looking at what past 30 years would have returned in S&P index fund is impressive.
Quote from @Yitzchok Carmen:
Quote from @Collin Hays:
We are seeing asking prices at approximately 10-12X the trailing twelve months rents (only rents). That's too high. This is why there is so much inventory, and so few takers.
My measuring stick is "Would this be a good investment for a cash investor seeking income?" The answer is, not particularly. If I have $500,000 to invest and am looking for income, I can draw around 4 percent from a high yield money market brokerage account through Schwab or Fidelity. That's $20,000 a year without lifting a finger.
If I take my $500,000 and invest in a Smokies cabin earning $50,000 a year, I am buying a part time job and probably only netting $27,000 to $29,000 per year after the following expenses:
Insurance - $3500 per year
Taxes - $2000 per year
Utilities - $6000 per year
Repairs & Maintenace - $7500 per year
HOA fees - $2000-3000 per year.
Total expenses: $21,000-$23,000 per year
If I can earn $20,000 per year on my $500,000 with virtually no risk and no effort, versus another $6-8K for much more risk and headache, the juice isn't worth the squeeze.This is also why generally in RE the game is played with OPM bc most real estate returns are pretty mediocre when all cash is used.
But another factor that is not included in your math is the fact that your property will probably be worth triple in 30 years while your money market account will not
- Member since 2018 · 88 posts · 55 votes1y
Quote from @Jules Aton:
Totally agree about OPM and would not park 500,000 in HYSA but looking at what past 30 years would have returned in S&P index fund is impressive.Quote from @Yitzchok Carmen:
Quote from @Collin Hays:
We are seeing asking prices at approximately 10-12X the trailing twelve months rents (only rents). That's too high. This is why there is so much inventory, and so few takers.
My measuring stick is "Would this be a good investment for a cash investor seeking income?" The answer is, not particularly. If I have $500,000 to invest and am looking for income, I can draw around 4 percent from a high yield money market brokerage account through Schwab or Fidelity. That's $20,000 a year without lifting a finger.
If I take my $500,000 and invest in a Smokies cabin earning $50,000 a year, I am buying a part time job and probably only netting $27,000 to $29,000 per year after the following expenses:
Insurance - $3500 per year
Taxes - $2000 per year
Utilities - $6000 per year
Repairs & Maintenace - $7500 per year
HOA fees - $2000-3000 per year.
Total expenses: $21,000-$23,000 per year
If I can earn $20,000 per year on my $500,000 with virtually no risk and no effort, versus another $6-8K for much more risk and headache, the juice isn't worth the squeeze.This is also why generally in RE the game is played with OPM bc most real estate returns are pretty mediocre when all cash is used.
But another factor that is not included in your math is the fact that your property will probably be worth triple in 30 years while your money market account will not
Completely agree! But not really strictly from a cash flow perspective
- Property Manager · Gatlinburg, TN · Member since 2020 · 3k+ posts · 4k+ votes1y
Quote from @Jules Aton:
Totally agree about OPM and would not park 500,000 in HYSA but looking at what past 30 years would have returned in S&P index fund is impressive.Quote from @Yitzchok Carmen:
Quote from @Collin Hays:
We are seeing asking prices at approximately 10-12X the trailing twelve months rents (only rents). That's too high. This is why there is so much inventory, and so few takers.
My measuring stick is "Would this be a good investment for a cash investor seeking income?" The answer is, not particularly. If I have $500,000 to invest and am looking for income, I can draw around 4 percent from a high yield money market brokerage account through Schwab or Fidelity. That's $20,000 a year without lifting a finger.
If I take my $500,000 and invest in a Smokies cabin earning $50,000 a year, I am buying a part time job and probably only netting $27,000 to $29,000 per year after the following expenses:
Insurance - $3500 per year
Taxes - $2000 per year
Utilities - $6000 per year
Repairs & Maintenace - $7500 per year
HOA fees - $2000-3000 per year.
Total expenses: $21,000-$23,000 per year
If I can earn $20,000 per year on my $500,000 with virtually no risk and no effort, versus another $6-8K for much more risk and headache, the juice isn't worth the squeeze.This is also why generally in RE the game is played with OPM bc most real estate returns are pretty mediocre when all cash is used.
But another factor that is not included in your math is the fact that your property will probably be worth triple in 30 years while your money market account will not
Correct; I am referring to immediate income, not growth. Different topic.
- Investor · Bargersville, IN · Member since 2017 · 95 posts · 52 votes1y
Quote from @Yitzchok Carmen:
Quote from @Collin Hays:
We are seeing asking prices at approximately 10-12X the trailing twelve months rents (only rents). That's too high. This is why there is so much inventory, and so few takers.
My measuring stick is "Would this be a good investment for a cash investor seeking income?" The answer is, not particularly. If I have $500,000 to invest and am looking for income, I can draw around 4 percent from a high yield money market brokerage account through Schwab or Fidelity. That's $20,000 a year without lifting a finger.
If I take my $500,000 and invest in a Smokies cabin earning $50,000 a year, I am buying a part time job and probably only netting $27,000 to $29,000 per year after the following expenses:
Insurance - $3500 per year
Taxes - $2000 per year
Utilities - $6000 per year
Repairs & Maintenace - $7500 per year
HOA fees - $2000-3000 per year.
Total expenses: $21,000-$23,000 per year
If I can earn $20,000 per year on my $500,000 with virtually no risk and no effort, versus another $6-8K for much more risk and headache, the juice isn't worth the squeeze.This is also why generally in RE the game is played with OPM bc most real estate returns are pretty mediocre when all cash is used.
But another factor that is not included in your math is the fact that your property will probably be worth triple in 30 years while your money market account will not
I would argue those numbers.... triple value on the house is only 1.5 mil, whereas compounded interest on $500k for 30 years is nearly 4.9 mil. +/- a few hundred thousand.
- Member since 2018 · 88 posts · 55 votes1y
Quote from @Zachary Clevenger:
Quote from @Yitzchok Carmen:
Quote from @Collin Hays:
We are seeing asking prices at approximately 10-12X the trailing twelve months rents (only rents). That's too high. This is why there is so much inventory, and so few takers.
My measuring stick is "Would this be a good investment for a cash investor seeking income?" The answer is, not particularly. If I have $500,000 to invest and am looking for income, I can draw around 4 percent from a high yield money market brokerage account through Schwab or Fidelity. That's $20,000 a year without lifting a finger.
If I take my $500,000 and invest in a Smokies cabin earning $50,000 a year, I am buying a part time job and probably only netting $27,000 to $29,000 per year after the following expenses:
Insurance - $3500 per year
Taxes - $2000 per year
Utilities - $6000 per year
Repairs & Maintenace - $7500 per year
HOA fees - $2000-3000 per year.
Total expenses: $21,000-$23,000 per year
If I can earn $20,000 per year on my $500,000 with virtually no risk and no effort, versus another $6-8K for much more risk and headache, the juice isn't worth the squeeze.This is also why generally in RE the game is played with OPM bc most real estate returns are pretty mediocre when all cash is used.
But another factor that is not included in your math is the fact that your property will probably be worth triple in 30 years while your money market account will not
I would argue those numbers.... triple value on the house is only 1.5 mil, whereas compounded interest on $500k for 30 years is nearly 4.9 mil. +/- a few hundred thousand.
But you gotta look at both capital appreciation AND dividends. When you factor the SP500 at 8% annually (which is where you are getting +-5mil) that's including everything. The 500k house is worth triple and that is besides for the net rents of 30k annually. If you take that 30k rent and put it into the market for 30 years at 8% thats another 3.7 mil.
It is very similar though long run. I guess the difference just being that with the house that is immediate income now rather then long term growth should you choose to keep it hear and there and not invest it. Also RE has some marginal tax benefits
Im not disagreeing with you though, if someone has 500k cash today and they wont use debt they are most likely better off long term in the market vs owning an STR - MD/DC · Member since 2024 · 1k+ posts · 1k+ votes1y
Quote from @Yitzchok Carmen:
Quote from @Zachary Clevenger:
Quote from @Yitzchok Carmen:
Quote from @Collin Hays:
We are seeing asking prices at approximately 10-12X the trailing twelve months rents (only rents). That's too high. This is why there is so much inventory, and so few takers.
My measuring stick is "Would this be a good investment for a cash investor seeking income?" The answer is, not particularly. If I have $500,000 to invest and am looking for income, I can draw around 4 percent from a high yield money market brokerage account through Schwab or Fidelity. That's $20,000 a year without lifting a finger.
If I take my $500,000 and invest in a Smokies cabin earning $50,000 a year, I am buying a part time job and probably only netting $27,000 to $29,000 per year after the following expenses:
Insurance - $3500 per year
Taxes - $2000 per year
Utilities - $6000 per year
Repairs & Maintenace - $7500 per year
HOA fees - $2000-3000 per year.
Total expenses: $21,000-$23,000 per year
If I can earn $20,000 per year on my $500,000 with virtually no risk and no effort, versus another $6-8K for much more risk and headache, the juice isn't worth the squeeze.This is also why generally in RE the game is played with OPM bc most real estate returns are pretty mediocre when all cash is used.
But another factor that is not included in your math is the fact that your property will probably be worth triple in 30 years while your money market account will not
I would argue those numbers.... triple value on the house is only 1.5 mil, whereas compounded interest on $500k for 30 years is nearly 4.9 mil. +/- a few hundred thousand.
But you gotta look at both capital appreciation AND dividends. When you factor the SP500 at 8% annually (which is where you are getting +-5mil) that's including everything. The 500k house is worth triple and that is besides for the net rents of 30k annually. If you take that 30k rent and put it into the market for 30 years at 8% thats another 3.7 mil.
It is very similar though long run. I guess the difference just being that with the house that is immediate income now rather then long term growth should you choose to keep it hear and there and not invest it. Also RE has some marginal tax benefits
Im not disagreeing with you though, if someone has 500k cash today and they wont use debt they are most likely better off long term in the market vs owning an STRI've struggled with this because while it isn't apples to apples there is a beauty to VTSAX set it and forget it as opposed to having to hand deliver laundry detergent to STR because the previous guest took all the laundry pods and current guest can't make it a mile up the street to purchase their own detergent lol. I'm a bit heavier in TSM index funds than RE but tend to like both to cover all my bases.
- Property Manager · Gatlinburg, TN · Member since 2020 · 3k+ posts · 4k+ votes1y
Quote from @Jules Aton:
Quote from @Yitzchok Carmen:
Quote from @Zachary Clevenger:
Quote from @Yitzchok Carmen:
Quote from @Collin Hays:
We are seeing asking prices at approximately 10-12X the trailing twelve months rents (only rents). That's too high. This is why there is so much inventory, and so few takers.
My measuring stick is "Would this be a good investment for a cash investor seeking income?" The answer is, not particularly. If I have $500,000 to invest and am looking for income, I can draw around 4 percent from a high yield money market brokerage account through Schwab or Fidelity. That's $20,000 a year without lifting a finger.
If I take my $500,000 and invest in a Smokies cabin earning $50,000 a year, I am buying a part time job and probably only netting $27,000 to $29,000 per year after the following expenses:
Insurance - $3500 per year
Taxes - $2000 per year
Utilities - $6000 per year
Repairs & Maintenace - $7500 per year
HOA fees - $2000-3000 per year.
Total expenses: $21,000-$23,000 per year
If I can earn $20,000 per year on my $500,000 with virtually no risk and no effort, versus another $6-8K for much more risk and headache, the juice isn't worth the squeeze.This is also why generally in RE the game is played with OPM bc most real estate returns are pretty mediocre when all cash is used.
But another factor that is not included in your math is the fact that your property will probably be worth triple in 30 years while your money market account will not
I would argue those numbers.... triple value on the house is only 1.5 mil, whereas compounded interest on $500k for 30 years is nearly 4.9 mil. +/- a few hundred thousand.
But you gotta look at both capital appreciation AND dividends. When you factor the SP500 at 8% annually (which is where you are getting +-5mil) that's including everything. The 500k house is worth triple and that is besides for the net rents of 30k annually. If you take that 30k rent and put it into the market for 30 years at 8% thats another 3.7 mil.
It is very similar though long run. I guess the difference just being that with the house that is immediate income now rather then long term growth should you choose to keep it hear and there and not invest it. Also RE has some marginal tax benefits
Im not disagreeing with you though, if someone has 500k cash today and they wont use debt they are most likely better off long term in the market vs owning an STRI've struggled with this because while it isn't apples to apples there is a beauty to VTSAX set it and forget it as opposed to having to hand deliver laundry detergent to STR because the previous guest took all the laundry pods and current guest can't make it a mile up the street to purchase their own detergent lol. I'm a bit heavier in TSM index funds than RE but tend to like both to cover all my bases.
RE is a part time job. But if you find a good deal, it's very much worth the extra effort, and will beat the pants off of market indices over the long term.
- MD/DC · Member since 2024 · 1k+ posts · 1k+ votes1y
Quote from @Collin Hays:
Quote from @Jules Aton:
Quote from @Yitzchok Carmen:
Quote from @Zachary Clevenger:
Quote from @Yitzchok Carmen:
Quote from @Collin Hays:
We are seeing asking prices at approximately 10-12X the trailing twelve months rents (only rents). That's too high. This is why there is so much inventory, and so few takers.
My measuring stick is "Would this be a good investment for a cash investor seeking income?" The answer is, not particularly. If I have $500,000 to invest and am looking for income, I can draw around 4 percent from a high yield money market brokerage account through Schwab or Fidelity. That's $20,000 a year without lifting a finger.
If I take my $500,000 and invest in a Smokies cabin earning $50,000 a year, I am buying a part time job and probably only netting $27,000 to $29,000 per year after the following expenses:
Insurance - $3500 per year
Taxes - $2000 per year
Utilities - $6000 per year
Repairs & Maintenace - $7500 per year
HOA fees - $2000-3000 per year.
Total expenses: $21,000-$23,000 per year
If I can earn $20,000 per year on my $500,000 with virtually no risk and no effort, versus another $6-8K for much more risk and headache, the juice isn't worth the squeeze.This is also why generally in RE the game is played with OPM bc most real estate returns are pretty mediocre when all cash is used.
But another factor that is not included in your math is the fact that your property will probably be worth triple in 30 years while your money market account will not
I would argue those numbers.... triple value on the house is only 1.5 mil, whereas compounded interest on $500k for 30 years is nearly 4.9 mil. +/- a few hundred thousand.
But you gotta look at both capital appreciation AND dividends. When you factor the SP500 at 8% annually (which is where you are getting +-5mil) that's including everything. The 500k house is worth triple and that is besides for the net rents of 30k annually. If you take that 30k rent and put it into the market for 30 years at 8% thats another 3.7 mil.
It is very similar though long run. I guess the difference just being that with the house that is immediate income now rather then long term growth should you choose to keep it hear and there and not invest it. Also RE has some marginal tax benefits
Im not disagreeing with you though, if someone has 500k cash today and they wont use debt they are most likely better off long term in the market vs owning an STRI've struggled with this because while it isn't apples to apples there is a beauty to VTSAX set it and forget it as opposed to having to hand deliver laundry detergent to STR because the previous guest took all the laundry pods and current guest can't make it a mile up the street to purchase their own detergent lol. I'm a bit heavier in TSM index funds than RE but tend to like both to cover all my bases.
RE is a part time job. But if you find a good deal, it's very much worth the extra effort, and will beat the pants off of market indices over the long term.
Very true and it was the small time flips early on that provided the profits to invest in index funds so there is that.
- Member since 2018 · 88 posts · 55 votes1y
Quote from @Collin Hays:
Quote from @Jules Aton:
Quote from @Yitzchok Carmen:
Quote from @Zachary Clevenger:
Quote from @Yitzchok Carmen:
Quote from @Collin Hays:
We are seeing asking prices at approximately 10-12X the trailing twelve months rents (only rents). That's too high. This is why there is so much inventory, and so few takers.
My measuring stick is "Would this be a good investment for a cash investor seeking income?" The answer is, not particularly. If I have $500,000 to invest and am looking for income, I can draw around 4 percent from a high yield money market brokerage account through Schwab or Fidelity. That's $20,000 a year without lifting a finger.
If I take my $500,000 and invest in a Smokies cabin earning $50,000 a year, I am buying a part time job and probably only netting $27,000 to $29,000 per year after the following expenses:
Insurance - $3500 per year
Taxes - $2000 per year
Utilities - $6000 per year
Repairs & Maintenace - $7500 per year
HOA fees - $2000-3000 per year.
Total expenses: $21,000-$23,000 per year
If I can earn $20,000 per year on my $500,000 with virtually no risk and no effort, versus another $6-8K for much more risk and headache, the juice isn't worth the squeeze.This is also why generally in RE the game is played with OPM bc most real estate returns are pretty mediocre when all cash is used.
But another factor that is not included in your math is the fact that your property will probably be worth triple in 30 years while your money market account will not
I would argue those numbers.... triple value on the house is only 1.5 mil, whereas compounded interest on $500k for 30 years is nearly 4.9 mil. +/- a few hundred thousand.
But you gotta look at both capital appreciation AND dividends. When you factor the SP500 at 8% annually (which is where you are getting +-5mil) that's including everything. The 500k house is worth triple and that is besides for the net rents of 30k annually. If you take that 30k rent and put it into the market for 30 years at 8% thats another 3.7 mil.
It is very similar though long run. I guess the difference just being that with the house that is immediate income now rather then long term growth should you choose to keep it hear and there and not invest it. Also RE has some marginal tax benefits
Im not disagreeing with you though, if someone has 500k cash today and they wont use debt they are most likely better off long term in the market vs owning an STRI've struggled with this because while it isn't apples to apples there is a beauty to VTSAX set it and forget it as opposed to having to hand deliver laundry detergent to STR because the previous guest took all the laundry pods and current guest can't make it a mile up the street to purchase their own detergent lol. I'm a bit heavier in TSM index funds than RE but tend to like both to cover all my bases.
RE is a part time job. But if you find a good deal, it's very much worth the extra effort, and will beat the pants off of market indices over the long term.
Right bc when you find a good deal your 500k is earning more than 50k gross/ 30k net:)
- Member since 2020 · 4 posts · 4 votes1y
This!!! 1000x this!! You should never compare the cash on cash return of a real estate investment to another interest-bearing investment account. It is comparing an apple to an elephant.
appreciation, principle pay down and tax advantages all must be taken into account as part of the return for your “headache”
Quote from @Yitzchok Carmen:
Quote from @Collin Hays:
We are seeing asking prices at approximately 10-12X the trailing twelve months rents (only rents). That's too high. This is why there is so much inventory, and so few takers.
My measuring stick is "Would this be a good investment for a cash investor seeking income?" The answer is, not particularly. If I have $500,000 to invest and am looking for income, I can draw around 4 percent from a high yield money market brokerage account through Schwab or Fidelity. That's $20,000 a year without lifting a finger.
If I take my $500,000 and invest in a Smokies cabin earning $50,000 a year, I am buying a part time job and probably only netting $27,000 to $29,000 per year after the following expenses:
Insurance - $3500 per year
Taxes - $2000 per year
Utilities - $6000 per year
Repairs & Maintenace - $7500 per year
HOA fees - $2000-3000 per year.
Total expenses: $21,000-$23,000 per year
If I can earn $20,000 per year on my $500,000 with virtually no risk and no effort, versus another $6-8K for much more risk and headache, the juice isn't worth the squeeze.This is also why generally in RE the game is played with OPM bc most real estate returns are pretty mediocre when all cash is used.
But another factor that is not included in your math is the fact that your property will probably be worth triple in 30 years while your money market account will not
- Rental Property Investor · Clayton, GA · Member since 2020 · 185 posts · 152 votes1y
Money market? Probably not, but there is no risk and no work there. In 30 years i've invested a lot of work into an airbnb and capital expenses on repairs... In 30 years you probably have 2 HVAC replacements, and a roof.
Also 100k investment over 30 years even at 4% is 324k or 224k profit doing nothing. Thats at 4%. Normally you run it at 9% which is the average of the index. At a 9% return you end up with 1.3 million over 30 years. So that same money could be invested better than even your "tripling" of value.
Im up over 35% in my investments this year to date... So 9% is certainly achievable. All i've done for the 35% is buy the fund and check it weekly while I light up my cigar and sip whiskey on my deck. So i've certainly factored it in, but i'm doing better without the property right now.
- Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes1y
Quote from @Collin Hays:
We are seeing asking prices at approximately 10-12X the trailing twelve months rents (only rents). That's too high. This is why there is so much inventory, and so few takers.
My measuring stick is "Would this be a good investment for a cash investor seeking income?" The answer is, not particularly. If I have $500,000 to invest and am looking for income, I can draw around 4 percent from a high yield money market brokerage account through Schwab or Fidelity. That's $20,000 a year without lifting a finger.
If I take my $500,000 and invest in a Smokies cabin earning $50,000 a year, I am buying a part time job and probably only netting $27,000 to $29,000 per year after the following expenses:
Insurance - $3500 per year
Taxes - $2000 per year
Utilities - $6000 per year
Repairs & Maintenace - $7500 per year
HOA fees - $2000-3000 per year.
Total expenses: $21,000-$23,000 per year
If I can earn $20,000 per year on my $500,000 with virtually no risk and no effort, versus another $6-8K for much more risk and headache, the juice isn't worth the squeeze.Collin,
How viable is picking up inventory <7yrs of age at 7-8X revenues, where gross --> net converts at 60% or greater?
- Property Manager · Gatlinburg, TN · Member since 2020 · 3k+ posts · 4k+ votes1y
Quote from @James Hamling:
Collin,
How viable is picking up inventory <7yrs of age at 7-8X revenues, where gross --> net converts at 60% or greater?
It starts making more sense at 8X, certainly at 7X.
- Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes1y
Quote from @Collin Hays:
Quote from @James Hamling:
Collin,
How viable is picking up inventory <7yrs of age at 7-8X revenues, where gross --> net converts at 60% or greater?
It starts making more sense at 8X, certainly at 7X.
What I meant by viable is do you believe any sellers are ready to accept offers within those parameters as of yet?
10-12x is just insanity, 10x of net is itself expensive and would need a heck of a lot of justification behind it for revenue growth probabilities not just potential.
I believe 7-8x is a fair high water price for quality, newer inventory. But as said it has to convert gross too net at 60% or better, proving a healthy operation that just needs more fule on the fire not revamp or rescue of operations. or worse yet, a non viable or descending market.
I have known people to look at things converting gross too net at 30-40% and they asked me if I thought it was ok, lol. Ah, no, heck no, not even close. Capex is accelerated on hospitality big-time, a 30-40% net = loosing $.
My ideal is more in the 4-5X, but for the specific market a premium is fair, and for <7yr of age, that's what brings me to 7-8X.
10X+, no thanks, juice isn't worth the squeeze.
- 1yV.G JasonPro MemberInvestor · Member since 2022 · 3k+ posts · 3k+ votes
Quote from @James Hamling:
Quote from @Collin Hays:
Quote from @James Hamling:
Collin,
How viable is picking up inventory <7yrs of age at 7-8X revenues, where gross --> net converts at 60% or greater?
It starts making more sense at 8X, certainly at 7X.
What I meant by viable is do you believe any sellers are ready to accept offers within those parameters as of yet?
10-12x is just insanity, 10x of net is itself expensive and would need a heck of a lot of justification behind it for revenue growth probabilities not just potential.
I believe 7-8x is a fair high water price for quality, newer inventory. But as said it has to convert gross too net at 60% or better, proving a healthy operation that just needs more fule on the fire not revamp or rescue of operations. or worse yet, a non viable or descending market.
I have known people to look at things converting gross too net at 30-40% and they asked me if I thought it was ok, lol. Ah, no, heck no, not even close. Capex is accelerated on hospitality big-time, a 30-40% net = loosing $.
My ideal is more in the 4-5X, but for the specific market a premium is fair, and for <7yr of age, that's what brings me to 7-8X.
10X+, no thanks, juice isn't worth the squeeze.
No, not really. The 3-5 year trailing is still too potent for them to discount there, I am aiming for more 5-6x, would get to higher if it's really an impeccable piece of land.
Most of the market has just been told to embrace and hold for the rate cuts and won't price like that. You haven't seen it correct below double digits still from a sale price(on average) because people are still using those trailing.
- 1yDoug SmithPro MemberLender · Tampa, FL · Member since 2013 · 2k+ posts · 2k+ votes
That's areally interesting take from a local. Thanks for sharing. We have a lot of loan customers that build ground-up in a similar market in NE GA. I'll definitely keep your post in mind and ask more questions. I appreciate it.
- 1yAndrew SteffensBusiness MemberTampa, FL · Member since 2022 · 3k+ posts · 3k+ votes
Let me know when yields are at 15%+ :)
Vacation Rentals of Florida53 Reviews - 1yHenry ClarkPro MemberDeveloper · Member since 2020 · 4k+ posts · 4k+ votes
OP the 100% Cash investor test will never work for RE.
RE you need to do a leverage test. 4 houses at 25% down. That is a true test of RE versus 4 % in a debt instrument.
Plus bring inflation into the picture. The debt deposit investment loses hands down versus RE.- Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes1y
Quote from @Henry Clark:
OP the 100% Cash investor test will never work for RE.
RE you need to do a leverage test. 4 houses at 25% down. That is a true test of RE versus 4 % in a debt instrument.
Plus bring inflation into the picture. The debt deposit investment loses hands down versus RE.You know Henry, I am starting to wonder if self-storage is the BETTER inflation adjusting vs standard rental real estate, for this specific phase of economy were into and continue forward in.
I warned of this a few years back (yup, persons can fact-check my BP posts on this) of Stagflation. And here we are, it's now being acknowledged we ARE in stagflation.
That means a python like squeeze on affordability.
That's a setup where the costs to acquire standard rentals, and operational costs, are inflation hit and inflation adjusting, but the monetization ie rents, are squeeeeezed, with deflation pressures due to peoples affordability.
Where self storage, well, it just seems a lot more affordable if prices go from say $150mnth too $172.50mnth, a 15% increase.
$2,100 too $2,415, a 15% increase, yeah that is a big hit for many and not so viable a thing to achieve.
The data in consumer debt, and consumer actions is really freaking me out. As well i am seeing it on the ground, for standard rentals. Yes inventory is tight, a rent can be fully justified, but if people don't have it, they don't have it. I am seeing budget tightness that is eyeball popping.
And wages are simply not growing at any rate to create relief.
What are you seeing Henry, any issues with vacancy or any of that in self storage?
I fear I was right in my prognosticating, we are into a "Python Economy". Any move we make to create room on draws it tighter. Inject liquidity, increase wages, inflation goes up, costs gobble every bit and then some making it worse. Demand out stripping supply removes any tangible deflationary actions for inputs. Affordability get's constricted more, and more, and more.
And isn't it true self-storage flourishes in the extremes? Recession = people holding onto more "stuff", and a boom = people getting more "stuff"......
- 1yHenry ClarkPro MemberDeveloper · Member since 2020 · 4k+ posts · 4k+ votesStorage is actually bad now, but great. Storage does best when the housing market is trending up or down. When it is stagnant it’s bad, but good since occupancy will stay flat. If you’re at 95% flat is ok.
Quote from @James Hamling:
Quote from @Henry Clark:
OP the 100% Cash investor test will never work for RE.
RE you need to do a leverage test. 4 houses at 25% down. That is a true test of RE versus 4 % in a debt instrument.
Plus bring inflation into the picture. The debt deposit investment loses hands down versus RE.You know Henry, I am starting to wonder if self-storage is the BETTER inflation adjusting vs standard rental real estate, for this specific phase of economy were into and continue forward in.
I warned of this a few years back (yup, persons can fact-check my BP posts on this) of Stagflation. And here we are, it's now being acknowledged we ARE in stagflation.
That means a python like squeeze on affordability.
That's a setup where the costs to acquire standard rentals, and operational costs, are inflation hit and inflation adjusting, but the monetization ie rents, are squeeeeezed, with deflation pressures due to peoples affordability.
Where self storage, well, it just seems a lot more affordable if prices go from say $150mnth too $172.50mnth, a 15% increase.
$2,100 too $2,415, a 15% increase, yeah that is a big hit for many and not so viable a thing to achieve.
The data in consumer debt, and consumer actions is really freaking me out. As well i am seeing it on the ground, for standard rentals. Yes inventory is tight, a rent can be fully justified, but if people don't have it, they don't have it. I am seeing budget tightness that is eyeball popping.
And wages are simply not growing at any rate to create relief.
What are you seeing Henry, any issues with vacancy or any of that in self storage?
I fear I was right in my prognosticating, we are into a "Python Economy". Any move we make to create room on draws it tighter. Inject liquidity, increase wages, inflation goes up, costs gobble every bit and then some making it worse. Demand out stripping supply removes any tangible deflationary actions for inputs. Affordability get's constricted more, and more, and more.
And isn't it true self-storage flourishes in the extremes? Recession = people holding onto more "stuff", and a boom = people getting more "stuff"......
The 15% increase is easy money for storage. Since relatively $20 versus $300 for a house is more digestible. So bad economy a storage rent increase is easier.
The great thing about posting in BP I have looked at all the markets in the U.S. There is tons of storage to still be developed in the U.S. Forget the large REITS. You don’t have to fight everyone for the great 3/2 deal in housing. So it’s still a “Buyers Market” from a developers standpoint.
Our worst investment right now is our latest 75 acre subdivision. We have 1 sale since we opened 3 months ago. Which is actually great since we have 18 lots. We just sale lots.
We need to wait till breakeven at 9 of 18 lots sold. Then have the next acreage I want to make an offer on. Even better subdivision location.Actually our worst investment is our cash equivalents, but we sleep well at night.
I try to stay in our lane, but can’t help looking at housing posts. Being more of a developer I see plenty of deals in housing but not traditional. When I look at the commercial section I see churches flat roofed, old elementary schools, child care, and senior housing for sale. Perfect locations, zoning allows housing, you have to be good at reno. But you’re not fighting the standard 3/2 or 4plex crowd paying a premium.
My son is moving to San Diego so I took a look at housing. Couldn’t make it work. Found a $200,000 solution and he can rent the other room out for $2,500 per month. Great life style in a used 40 foot yacht. 5 miles from base. But he wants to share a residence with 4 guys paying $2,500 each. My point is there a lot of creative assets out there.
Trailer lots- in Texas generally no zoning. $800 for a lot with utility hookups. The renter pays the utilities and owns the rv or trailer. Sticky customers. With the Python squeezing lower housing cost will be the answer for more people. How many house rental unit rentals make $800 with no upkeep? In our trailer park growing up my brother and I dug the sewer and water line with shovels in Louisiana “hot”. Mini excavator $800 for 2 days. Lay the pipes and push the dirt in. Dig for the electrician and leave the exposed underground. Once he is done push the dirt over. Later form and pour some
Car pads and porch pads. You have a park.
You took $10,000 acre land and made it into $300,000 acre land three days later. Then start renting.
Buy a house with 5 to 20 acres and subdivide the land off.
Buy Texas offlist property for $8,000 and sell it for $200,000 2 years later just mowing grass. Or $10,000 then sell a year later for $50,000.Belize Teak is too long of a capital and knowledge intensive deal so that’s off the table as a suggestion.
I think there are tons of investments out there.
- 1yHenry ClarkPro MemberDeveloper · Member since 2020 · 4k+ posts · 4k+ votes
Quote from @James Hamling:
Quote from @Henry Clark:
OP the 100% Cash investor test will never work for RE.
RE you need to do a leverage test. 4 houses at 25% down. That is a true test of RE versus 4 % in a debt instrument.
Plus bring inflation into the picture. The debt deposit investment loses hands down versus RE.You know Henry, I am starting to wonder if self-storage is the BETTER inflation adjusting vs standard rental real estate, for this specific phase of economy were into and continue forward in.
I warned of this a few years back (yup, persons can fact-check my BP posts on this) of Stagflation. And here we are, it's now being acknowledged we ARE in stagflation.
That means a python like squeeze on affordability.
That's a setup where the costs to acquire standard rentals, and operational costs, are inflation hit and inflation adjusting, but the monetization ie rents, are squeeeeezed, with deflation pressures due to peoples affordability.
Where self storage, well, it just seems a lot more affordable if prices go from say $150mnth too $172.50mnth, a 15% increase.
$2,100 too $2,415, a 15% increase, yeah that is a big hit for many and not so viable a thing to achieve.
The data in consumer debt, and consumer actions is really freaking me out. As well i am seeing it on the ground, for standard rentals. Yes inventory is tight, a rent can be fully justified, but if people don't have it, they don't have it. I am seeing budget tightness that is eyeball popping.
And wages are simply not growing at any rate to create relief.
What are you seeing Henry, any issues with vacancy or any of that in self storage?
I fear I was right in my prognosticating, we are into a "Python Economy". Any move we make to create room on draws it tighter. Inject liquidity, increase wages, inflation goes up, costs gobble every bit and then some making it worse. Demand out stripping supply removes any tangible deflationary actions for inputs. Affordability get's constricted more, and more, and more.
And isn't it true self-storage flourishes in the extremes? Recession = people holding onto more "stuff", and a boom = people getting more "stuff"......
Another benefit of Selfstorage. I always use a Market ratio of 1 unit for every 6 people. Whereas housing generally always a 1/1 relationship forgetting homeless which is an average percentage.
Thus self storage has a larger non customer Base percentage which keeps the rate higher.
As mentioned in the prior post, any rate increase even if the same percentage, is a less relative dollar amount.
So self storage is better than housing in Stagflation based on numbers.
- Investor · Malakoff, TX · Member since 2017 · 2k+ posts · 2k+ votes1y
Quote from @Henry Clark:
Storage is actually bad now, but great. Storage does best when the housing market is trending up or down. When it is stagnant it’s bad, but good since occupancy will stay flat. If you’re at 95% flat is ok.Quote from @James Hamling:
Quote from @Henry Clark:
OP the 100% Cash investor test will never work for RE.
RE you need to do a leverage test. 4 houses at 25% down. That is a true test of RE versus 4 % in a debt instrument.
Plus bring inflation into the picture. The debt deposit investment loses hands down versus RE.You know Henry, I am starting to wonder if self-storage is the BETTER inflation adjusting vs standard rental real estate, for this specific phase of economy were into and continue forward in.
I warned of this a few years back (yup, persons can fact-check my BP posts on this) of Stagflation. And here we are, it's now being acknowledged we ARE in stagflation.
That means a python like squeeze on affordability.
That's a setup where the costs to acquire standard rentals, and operational costs, are inflation hit and inflation adjusting, but the monetization ie rents, are squeeeeezed, with deflation pressures due to peoples affordability.
Where self storage, well, it just seems a lot more affordable if prices go from say $150mnth too $172.50mnth, a 15% increase.
$2,100 too $2,415, a 15% increase, yeah that is a big hit for many and not so viable a thing to achieve.
The data in consumer debt, and consumer actions is really freaking me out. As well i am seeing it on the ground, for standard rentals. Yes inventory is tight, a rent can be fully justified, but if people don't have it, they don't have it. I am seeing budget tightness that is eyeball popping.
And wages are simply not growing at any rate to create relief.
What are you seeing Henry, any issues with vacancy or any of that in self storage?
I fear I was right in my prognosticating, we are into a "Python Economy". Any move we make to create room on draws it tighter. Inject liquidity, increase wages, inflation goes up, costs gobble every bit and then some making it worse. Demand out stripping supply removes any tangible deflationary actions for inputs. Affordability get's constricted more, and more, and more.
And isn't it true self-storage flourishes in the extremes? Recession = people holding onto more "stuff", and a boom = people getting more "stuff"......
The 15% increase is easy money for storage. Since relatively $20 versus $300 for a house is more digestible. So bad economy a storage rent increase is easier.
The great thing about posting in BP I have looked at all the markets in the U.S. There is tons of storage to still be developed in the U.S. Forget the large REITS. You don’t have to fight everyone for the great 3/2 deal in housing. So it’s still a “Buyers Market” from a developers standpoint.
Our worst investment right now is our latest 75 acre subdivision. We have 1 sale since we opened 3 months ago. Which is actually great since we have 18 lots. We just sale lots.
We need to wait till breakeven at 9 of 18 lots sold. Then have the next acreage I want to make an offer on. Even better subdivision location.Actually our worst investment is our cash equivalents, but we sleep well at night.
I try to stay in our lane, but can’t help looking at housing posts. Being more of a developer I see plenty of deals in housing but not traditional. When I look at the commercial section I see churches flat roofed, old elementary schools, child care, and senior housing for sale. Perfect locations, zoning allows housing, you have to be good at reno. But you’re not fighting the standard 3/2 or 4plex crowd paying a premium.
My son is moving to San Diego so I took a look at housing. Couldn’t make it work. Found a $200,000 solution and he can rent the other room out for $2,500 per month. Great life style in a used 40 foot yacht. 5 miles from base. But he wants to share a residence with 4 guys paying $2,500 each. My point is there a lot of creative assets out there.
Trailer lots- in Texas generally no zoning. $800 for a lot with utility hookups. The renter pays the utilities and owns the rv or trailer. Sticky customers. With the Python squeezing lower housing cost will be the answer for more people. How many house rental unit rentals make $800 with no upkeep? In our trailer park growing up my brother and I dug the sewer and water line with shovels in Louisiana “hot”. Mini excavator $800 for 2 days. Lay the pipes and push the dirt in. Dig for the electrician and leave the exposed underground. Once he is done push the dirt over. Later form and pour some
Car pads and porch pads. You have a park.
You took $10,000 acre land and made it into $300,000 acre land three days later. Then start renting.
Buy a house with 5 to 20 acres and subdivide the land off.
Buy Texas offlist property for $8,000 and sell it for $200,000 2 years later just mowing grass. Or $10,000 then sell a year later for $50,000.Belize Teak is too long of a capital and knowledge intensive deal so that’s off the table as a suggestion.
I think there are tons of investments out there.
A few years ago I checked into developing manufactured home communities in TX. All the counties around me have adopted a pretty stringent development process for these even outside city limits. And of course, all septic systems in TX need to be permitted.
- 1yHenry ClarkPro MemberDeveloper · Member since 2020 · 4k+ posts · 4k+ votes
Quote from @Eric James:
Quote from @Henry Clark:
Storage is actually bad now, but great. Storage does best when the housing market is trending up or down. When it is stagnant it’s bad, but good since occupancy will stay flat. If you’re at 95% flat is ok.Quote from @James Hamling:
Quote from @Henry Clark:
OP the 100% Cash investor test will never work for RE.
RE you need to do a leverage test. 4 houses at 25% down. That is a true test of RE versus 4 % in a debt instrument.
Plus bring inflation into the picture. The debt deposit investment loses hands down versus RE.You know Henry, I am starting to wonder if self-storage is the BETTER inflation adjusting vs standard rental real estate, for this specific phase of economy were into and continue forward in.
I warned of this a few years back (yup, persons can fact-check my BP posts on this) of Stagflation. And here we are, it's now being acknowledged we ARE in stagflation.
That means a python like squeeze on affordability.
That's a setup where the costs to acquire standard rentals, and operational costs, are inflation hit and inflation adjusting, but the monetization ie rents, are squeeeeezed, with deflation pressures due to peoples affordability.
Where self storage, well, it just seems a lot more affordable if prices go from say $150mnth too $172.50mnth, a 15% increase.
$2,100 too $2,415, a 15% increase, yeah that is a big hit for many and not so viable a thing to achieve.
The data in consumer debt, and consumer actions is really freaking me out. As well i am seeing it on the ground, for standard rentals. Yes inventory is tight, a rent can be fully justified, but if people don't have it, they don't have it. I am seeing budget tightness that is eyeball popping.
And wages are simply not growing at any rate to create relief.
What are you seeing Henry, any issues with vacancy or any of that in self storage?
I fear I was right in my prognosticating, we are into a "Python Economy". Any move we make to create room on draws it tighter. Inject liquidity, increase wages, inflation goes up, costs gobble every bit and then some making it worse. Demand out stripping supply removes any tangible deflationary actions for inputs. Affordability get's constricted more, and more, and more.
And isn't it true self-storage flourishes in the extremes? Recession = people holding onto more "stuff", and a boom = people getting more "stuff"......
The 15% increase is easy money for storage. Since relatively $20 versus $300 for a house is more digestible. So bad economy a storage rent increase is easier.
The great thing about posting in BP I have looked at all the markets in the U.S. There is tons of storage to still be developed in the U.S. Forget the large REITS. You don’t have to fight everyone for the great 3/2 deal in housing. So it’s still a “Buyers Market” from a developers standpoint.
Our worst investment right now is our latest 75 acre subdivision. We have 1 sale since we opened 3 months ago. Which is actually great since we have 18 lots. We just sale lots.
We need to wait till breakeven at 9 of 18 lots sold. Then have the next acreage I want to make an offer on. Even better subdivision location.Actually our worst investment is our cash equivalents, but we sleep well at night.
I try to stay in our lane, but can’t help looking at housing posts. Being more of a developer I see plenty of deals in housing but not traditional. When I look at the commercial section I see churches flat roofed, old elementary schools, child care, and senior housing for sale. Perfect locations, zoning allows housing, you have to be good at reno. But you’re not fighting the standard 3/2 or 4plex crowd paying a premium.
My son is moving to San Diego so I took a look at housing. Couldn’t make it work. Found a $200,000 solution and he can rent the other room out for $2,500 per month. Great life style in a used 40 foot yacht. 5 miles from base. But he wants to share a residence with 4 guys paying $2,500 each. My point is there a lot of creative assets out there.
Trailer lots- in Texas generally no zoning. $800 for a lot with utility hookups. The renter pays the utilities and owns the rv or trailer. Sticky customers. With the Python squeezing lower housing cost will be the answer for more people. How many house rental unit rentals make $800 with no upkeep? In our trailer park growing up my brother and I dug the sewer and water line with shovels in Louisiana “hot”. Mini excavator $800 for 2 days. Lay the pipes and push the dirt in. Dig for the electrician and leave the exposed underground. Once he is done push the dirt over. Later form and pour some
Car pads and porch pads. You have a park.
You took $10,000 acre land and made it into $300,000 acre land three days later. Then start renting.
Buy a house with 5 to 20 acres and subdivide the land off.
Buy Texas offlist property for $8,000 and sell it for $200,000 2 years later just mowing grass. Or $10,000 then sell a year later for $50,000.Belize Teak is too long of a capital and knowledge intensive deal so that’s off the table as a suggestion.
I think there are tons of investments out there.
A few years ago I checked into developing manufactured home communities in TX. All the counties around me have adopted a pretty stringent development process for these even outside city limits. And of course, all septic systems in TX need to be permitted.
The harder to permit the more valuable the asset. Our self storage can be challenging zoning. But means less competition. More valuable asset.
I just think right now if people are squeezing lemons, they should try oranges. Back to the OPs post. I think there are a lot of investments right now even at say 8% interest.
- Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes1y
Quote from @Henry Clark:
Quote from @James Hamling:
Quote from @Henry Clark:
OP the 100% Cash investor test will never work for RE.
RE you need to do a leverage test. 4 houses at 25% down. That is a true test of RE versus 4 % in a debt instrument.
Plus bring inflation into the picture. The debt deposit investment loses hands down versus RE.You know Henry, I am starting to wonder if self-storage is the BETTER inflation adjusting vs standard rental real estate, for this specific phase of economy were into and continue forward in.
I warned of this a few years back (yup, persons can fact-check my BP posts on this) of Stagflation. And here we are, it's now being acknowledged we ARE in stagflation.
That means a python like squeeze on affordability.
That's a setup where the costs to acquire standard rentals, and operational costs, are inflation hit and inflation adjusting, but the monetization ie rents, are squeeeeezed, with deflation pressures due to peoples affordability.
Where self storage, well, it just seems a lot more affordable if prices go from say $150mnth too $172.50mnth, a 15% increase.
$2,100 too $2,415, a 15% increase, yeah that is a big hit for many and not so viable a thing to achieve.
The data in consumer debt, and consumer actions is really freaking me out. As well i am seeing it on the ground, for standard rentals. Yes inventory is tight, a rent can be fully justified, but if people don't have it, they don't have it. I am seeing budget tightness that is eyeball popping.
And wages are simply not growing at any rate to create relief.
What are you seeing Henry, any issues with vacancy or any of that in self storage?
I fear I was right in my prognosticating, we are into a "Python Economy". Any move we make to create room on draws it tighter. Inject liquidity, increase wages, inflation goes up, costs gobble every bit and then some making it worse. Demand out stripping supply removes any tangible deflationary actions for inputs. Affordability get's constricted more, and more, and more.
And isn't it true self-storage flourishes in the extremes? Recession = people holding onto more "stuff", and a boom = people getting more "stuff"......
Another benefit of Selfstorage. I always use a Market ratio of 1 unit for every 6 people. Whereas housing generally always a 1/1 relationship forgetting homeless which is an average percentage.
Thus self storage has a larger non customer Base percentage which keeps the rate higher.
As mentioned in the prior post, any rate increase even if the same percentage, is a less relative dollar amount.
So self storage is better than housing in Stagflation based on numbers.
If your willing to make the post Henry, I'd really love to read what metrics you like for a viability for self-storage market/placement selection.
That is currently my #1 hurdle with SS. I feel squeezed between big-city operators who seemingly gobble up market share, and a rural operator who's in mass-expansion mode for last several years.
- 1yHenry ClarkPro MemberDeveloper · Member since 2020 · 4k+ posts · 4k+ votes
Quote from @James Hamling:
Quote from @Henry Clark:
Quote from @James Hamling:
Quote from @Henry Clark:
OP the 100% Cash investor test will never work for RE.
RE you need to do a leverage test. 4 houses at 25% down. That is a true test of RE versus 4 % in a debt instrument.
Plus bring inflation into the picture. The debt deposit investment loses hands down versus RE.You know Henry, I am starting to wonder if self-storage is the BETTER inflation adjusting vs standard rental real estate, for this specific phase of economy were into and continue forward in.
I warned of this a few years back (yup, persons can fact-check my BP posts on this) of Stagflation. And here we are, it's now being acknowledged we ARE in stagflation.
That means a python like squeeze on affordability.
That's a setup where the costs to acquire standard rentals, and operational costs, are inflation hit and inflation adjusting, but the monetization ie rents, are squeeeeezed, with deflation pressures due to peoples affordability.
Where self storage, well, it just seems a lot more affordable if prices go from say $150mnth too $172.50mnth, a 15% increase.
$2,100 too $2,415, a 15% increase, yeah that is a big hit for many and not so viable a thing to achieve.
The data in consumer debt, and consumer actions is really freaking me out. As well i am seeing it on the ground, for standard rentals. Yes inventory is tight, a rent can be fully justified, but if people don't have it, they don't have it. I am seeing budget tightness that is eyeball popping.
And wages are simply not growing at any rate to create relief.
What are you seeing Henry, any issues with vacancy or any of that in self storage?
I fear I was right in my prognosticating, we are into a "Python Economy". Any move we make to create room on draws it tighter. Inject liquidity, increase wages, inflation goes up, costs gobble every bit and then some making it worse. Demand out stripping supply removes any tangible deflationary actions for inputs. Affordability get's constricted more, and more, and more.
And isn't it true self-storage flourishes in the extremes? Recession = people holding onto more "stuff", and a boom = people getting more "stuff"......
Another benefit of Selfstorage. I always use a Market ratio of 1 unit for every 6 people. Whereas housing generally always a 1/1 relationship forgetting homeless which is an average percentage.
Thus self storage has a larger non customer Base percentage which keeps the rate higher.
As mentioned in the prior post, any rate increase even if the same percentage, is a less relative dollar amount.
So self storage is better than housing in Stagflation based on numbers.
If your willing to make the post Henry, I'd really love to read what metrics you like for a viability for self-storage market/placement selection.
That is currently my #1 hurdle with SS. I feel squeezed between big-city operators who seemingly gobble up market share, and a rural operator who's in mass-expansion mode for last several years.
I’ll update my post “Will they come?”. Over in the commercial section. Traveling back from Pensacola today though.
Couple things to remember about Selfstorage.
There are only two product types, climate controlled and not climate controlled. Versus in the housing market there are a million combinations.
You can easily dominate a market versus in housing, thus you can control pricing.
Selfstorage is pure numbers assessing markets and locations.
Self storage is all about “War” and strategy.
You apply Risk management to your location and size, using numbers.
You can develop or buy. Right now it is better to develop. On a 200 unit location in a market where a 10x20 rents for $130, day one you will have $1mm value add equity above your downpayment. Versus if you buy, you will pay the other person that much. This value add is even greater in the East coast where rents can be $250 up to $500 for a 10x20.
The benefit is even greater if you live there and use your normal house cost to make money. So great for a single or younger couple. Or a retired couple who doesn’t want to take care of a house and yard.
Cargo containers if your near a port and can find zoning is a great choice.
I’ll take a look at the MN area. There is a great need there for recreational vehicle parking.
Our son and 3 of his Navy guys were trolling. They had to out reel their catch in or the porpoises would eat the fish behind the boat.
- Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes1y
Quote from @Henry Clark:
Quote from @James Hamling:
Quote from @Henry Clark:
Quote from @James Hamling:
Quote from @Henry Clark:
OP the 100% Cash investor test will never work for RE.
RE you need to do a leverage test. 4 houses at 25% down. That is a true test of RE versus 4 % in a debt instrument.
Plus bring inflation into the picture. The debt deposit investment loses hands down versus RE.You know Henry, I am starting to wonder if self-storage is the BETTER inflation adjusting vs standard rental real estate, for this specific phase of economy were into and continue forward in.
I warned of this a few years back (yup, persons can fact-check my BP posts on this) of Stagflation. And here we are, it's now being acknowledged we ARE in stagflation.
That means a python like squeeze on affordability.
That's a setup where the costs to acquire standard rentals, and operational costs, are inflation hit and inflation adjusting, but the monetization ie rents, are squeeeeezed, with deflation pressures due to peoples affordability.
Where self storage, well, it just seems a lot more affordable if prices go from say $150mnth too $172.50mnth, a 15% increase.
$2,100 too $2,415, a 15% increase, yeah that is a big hit for many and not so viable a thing to achieve.
The data in consumer debt, and consumer actions is really freaking me out. As well i am seeing it on the ground, for standard rentals. Yes inventory is tight, a rent can be fully justified, but if people don't have it, they don't have it. I am seeing budget tightness that is eyeball popping.
And wages are simply not growing at any rate to create relief.
What are you seeing Henry, any issues with vacancy or any of that in self storage?
I fear I was right in my prognosticating, we are into a "Python Economy". Any move we make to create room on draws it tighter. Inject liquidity, increase wages, inflation goes up, costs gobble every bit and then some making it worse. Demand out stripping supply removes any tangible deflationary actions for inputs. Affordability get's constricted more, and more, and more.
And isn't it true self-storage flourishes in the extremes? Recession = people holding onto more "stuff", and a boom = people getting more "stuff"......
Another benefit of Selfstorage. I always use a Market ratio of 1 unit for every 6 people. Whereas housing generally always a 1/1 relationship forgetting homeless which is an average percentage.
Thus self storage has a larger non customer Base percentage which keeps the rate higher.
As mentioned in the prior post, any rate increase even if the same percentage, is a less relative dollar amount.
So self storage is better than housing in Stagflation based on numbers.
If your willing to make the post Henry, I'd really love to read what metrics you like for a viability for self-storage market/placement selection.
That is currently my #1 hurdle with SS. I feel squeezed between big-city operators who seemingly gobble up market share, and a rural operator who's in mass-expansion mode for last several years.
I’ll update my post “Will they come?”. Over in the commercial section. Traveling back from Pensacola today though.
Couple things to remember about Selfstorage.
There are only two product types, climate controlled and not climate controlled. Versus in the housing market there are a million combinations.
You can easily dominate a market versus in housing, thus you can control pricing.
Selfstorage is pure numbers assessing markets and locations.
Self storage is all about “War” and strategy.
You apply Risk management to your location and size, using numbers.
You can develop or buy. Right now it is better to develop. On a 200 unit location in a market where a 10x20 rents for $130, day one you will have $1mm value add equity above your downpayment. Versus if you buy, you will pay the other person that much. This value add is even greater in the East coast where rents can be $250 up to $500 for a 10x20.
The benefit is even greater if you live there and use your normal house cost to make money. So great for a single or younger couple. Or a retired couple who doesn’t want to take care of a house and yard.
Cargo containers if your near a port and can find zoning is a great choice.
I’ll take a look at the MN area. There is a great need there for recreational vehicle parking.
Our son and 3 of his Navy guys were trolling. They had to out reel their catch in or the porpoises would eat the fish behind the boat.
In my areas a NON climate controlled:
5x10 ~ $90mnth
10x15 ~ $140mnth
10x20 ~ $170mnth
Obviously a HUGE range in that ppsf. Compilation varies on location and I suspect operator savvy.At this time an intelligent design would have a median of ~ $1.40sf.
- 1yRyan MoyerBusiness MemberProperty Manager · Orlando Kissimmee Davenport Salt Lake City, Park City · Member since 2019 · 991 posts · 1k+ votes
Quote from @Henry Clark:
OP the 100% Cash investor test will never work for RE.
RE you need to do a leverage test. 4 houses at 25% down. That is a true test of RE versus 4 % in a debt instrument.
Plus bring inflation into the picture. The debt deposit investment loses hands down versus RE.The problem there is once you add a mortgage at 75% LTV with a 6%+ interest rate to the equation, the cash flow disappears entirely if you're only doing $50k gross on a $500k purchase. In fact, you're most likely paying out of pocket each month and not even covering your costs.
Of course the answer there is to buy in a market where you're not paying 10x gross revenue, or do a value-add where you're not paying 10x gross revenue.
But yes, I agree with Colin's premise that buying STR at 10x gross revenue is a terrible deal. Thankfully there are better deals available.
I would add Destin to the list as well. That's another market like the Smokies where people have just kind of accepted that a property is going to be listed for 10x gross revenue. Lifestyle asset, future appreciation, maybe. But the numbers are really bad on 10x properties at current interest rates.
Cosmic Vacations4.9174 Reviews
- 1yHenry ClarkPro MemberDeveloper · Member since 2020 · 4k+ posts · 4k+ votes
If you can't get enough juice squeezing lemons switch to oranges. REI has so many options.
- Property Manager · Chattanooga, TN · Member since 2018 · 175 posts · 134 votes1y
Surely buyers for those types of deals are people who want to own a home in the mountains, and STR is a way to cover the costs of buying a second (or third) home they were going to buy anyway. In other words, I don't think they see it as an investment.
- Property Manager · Gatlinburg, TN · Member since 2020 · 3k+ posts · 4k+ votes1y
Quote from @Tyler Divin:
Surely buyers for those types of deals are people who want to own a home in the mountains, and STR is a way to cover the costs of buying a second (or third) home they were going to buy anyway. In other words, I don't think they see it as an investment.
That's a pretty good description of the typical buyer profile, and not a bad mindset at all.
- Property Manager · Erie & Millscreek PA | Maggie Valley & Haywood County NC · Member since 2024 · 264 posts · 118 votes1y
@Collin Hays
Collin, really solid breakdown, you’ve nailed what a lot of investors overlook when they just see the gross numbers. Once you factor in utilities, maintenance, and the inevitable headaches, the net return doesn’t look so appealing compared to a simple money market yield. Your point about essentially “buying a part-time job” is spot on, especially for out-of-state buyers who aren’t prepared for the operational side. Until prices realign closer to 7–8x rents, I think a lot of smart investors will stay on the sidelines. - Real Estate Agent · Chicago, IL · Member since 2017 · 2k+ posts · 2k+ votes1y
You have HOA for cabins? How does that work?
Forget a money market, those won't grow your principal even with inflation. Can just invest 80/20 stocks bonds and pull out an inflation adjusted annual 4-5% a year. I would never do a real estate investment that netted me less then that.
- MD/DC · Member since 2024 · 1k+ posts · 1k+ votes1y
Quote from @Henry Lazerow:
You have HOA for cabins? How does that work?
Forget a money market, those won't grow your principal even with inflation. Can just invest 80/20 stocks bonds and pull out an inflation adjusted annual 4-5% a year. I would never do a real estate investment that netted me less then that.
Agree although depending on your age and other financial nuances 80/20 might be too conservative. ;)
- Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes1y
What do you see @Collin Hays, any chance a seller of the decent, well located STR inventory selling for 7X current annual revenues?
Or are we still miles away from that pricing?
- Property Manager · Gatlinburg, TN · Member since 2020 · 3k+ posts · 4k+ votes1y
Quote from @James Hamling:
What do you see @Collin Hays, any chance a seller of the decent, well located STR inventory selling for 7X current annual revenues?
Or are we still miles away from that pricing?
We are a long way from that pricing and honestly we may never get quite there again. That period of time was due to fallout from the 2008-11 financial crisis. It lasted about 11 years - until COVID.
I bought my first cabin in the Smokies in 2005 for $240K. I think it did $18K the first year. Not a very good multiple at all, but I kept it and it's worked out very well. Annual is now more like $50K.
- Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes1y
Quote from @Collin Hays:
Quote from @James Hamling:
What do you see @Collin Hays, any chance a seller of the decent, well located STR inventory selling for 7X current annual revenues?
Or are we still miles away from that pricing?
We are a long way from that pricing and honestly we may never get quite there again. That period of time was due to fallout from the 2008-11 financial crisis. It lasted about 11 years - until COVID.
I bought my first cabin in the Smokies in 2005 for $240K. I think it did $18K the first year. Not a very good multiple at all, but I kept it and it's worked out very well. Annual is now more like $50K.
Everything I like that's what I am seeing, $50k area.
But there is so dang much inventory, I just can't bring myself to the $600k/$700k+ they seem to all want. As you noted, north of a 10-12X multiple on gross revenues.
I just can't ignore the sheer volume of inventory, and what that all could mean.
There is a very real risk to how low will revenues get pushed in a race to the bottom, and the unknown of how long could that protract for.
As Warren Buffet says, a person can pay too much for quality.
I like the assets, I like the market, I like the operation, I hate the price for the unknowns and risk exposure it holds today.
- 1yMichael HaasBusiness MemberReal Estate Agent · Redmond, 🌧️ Seattle Investor-Agent | 🤑 Helped 400+ Clients Invest in Real Estate | 🏘️ Owns 23 WA Rentals & Airbnbs | 🏗️ Built 5 DADU's | 📈 You Can Do It Too · Member since 2016 · 724 posts · 3k+ votes
@Collin Hays your calculation doesn't take into account leverage - without leverage real estate underperforms most other asset classes, with (good) leverage it over-performs or matches (with less volatility, and more tax benefits).
That said I do agree - true real estate opportunities in this market are few and far between. We would need rates to fall, prices to fall, or rents to rise to see more of the "deals" investors have become accustomed to over the last 10 years.HouseHack Seattle | Michael Haas & Team572 Reviews
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