Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Residential Lease Rates ... Increase?
Old 02-26-2005, 06:03 PM   #1
Full time employment: Posting here.
 
Join Date: Dec 2004
Posts: 714
Residential Lease Rates ... Increase?

We hold part of our investments in 3 rental properties, and the lease rates have been stagnant for the last couple of years.

I expect that to remain the case, until either the rise in real estate values abates, and / or higher interest rates steal the punch bowl from the party.

Years ago, I heard an old saw that rental rates should be 1% of the real estate value per month ... an amount now far in excess of what our properties command.

So, for those of you who hold rental real estate, what are your expectations, and have you too been looking foward to a tighter, less homeowner-friendly market in which you can finally increase rents a bit? *

Also, we'd like to buy another rental or two, but the appreciation rates have been so high the last couple years that we think we're best off to keep our powder dry a little longer. *Are you waiting, or investing more in RE right now?

Thanks.
__________________

__________________
Craig is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Re: Residential Lease Rates ... Increase?
Old 02-26-2005, 06:28 PM   #2
Thinks s/he gets paid by the post
 
Join Date: Aug 2004
Location: Houston
Posts: 1,435
Re: Residential Lease Rates ... Increase?

A bit of a tangent but...everyone is talking about how REITs are overvalued right now given their run up in the last two years. Yet if interest rates continue to rise, mortgage payments will increase making rental units more attractive and possibly leading to rent increases. On the other hand, I'm guessing that REITs use debt to finance their property, and higher rates means that they'll face increased interest expense, which means less cash to pay those fat dividends.
__________________

__________________
soupcxan is online now   Reply With Quote
Re: Residential Lease Rates ... Increase?
Old 02-28-2005, 06:15 AM   #3
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
brewer12345's Avatar
 
Join Date: Mar 2003
Posts: 16,391
Re: Residential Lease Rates ... Increase?

Quote:
A bit of a tangent but...everyone is talking about how REITs are overvalued right now given their run up in the last two years. Yet if interest rates continue to rise, mortgage payments will increase making rental units more attractive and possibly leading to rent increases. On the other hand, I'm guessing that REITs use debt to finance their property, and higher rates means that they'll face increased interest expense, which means less cash to pay those fat dividends.
Actually, most REITs have fixed rate debt, so increases in rates won't necessarily increase interest expense on existing debt. What rising rates will do to REITs is increase the discount rate investors use to value REITs.
__________________
"There are three kinds of men. The one that learns by reading. The few who learn by observation. The rest have to pee on the electric fence for themselves."



- Will Rogers
brewer12345 is offline   Reply With Quote
Re: Residential Lease Rates ... Increase?
Old 02-28-2005, 02:16 PM   #4
Thinks s/he gets paid by the post
 
Join Date: Aug 2004
Location: Houston
Posts: 1,435
Re: Residential Lease Rates ... Increase?

Thanks brewer...once again I bow before the master.

Now, back to studying cost accounting and FIFO revaluations...fun!
__________________
soupcxan is online now   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Thoughts on buy or lease new car, Technology changing fast rjk514 Life after FIRE 62 01-25-2007 08:50 PM
Increase in Property tax and Home Insurance Rates ferco FIRE and Money 33 01-24-2007 01:57 PM
Low Interest Rates Here To Stay? Donner FIRE and Money 23 02-13-2005 03:02 PM
CD Rates, a plan? Telly FIRE and Money 11 11-03-2003 09:33 PM

 

 
All times are GMT -6. The time now is 08:00 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.