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I have lived beneath my means since I've worked at the age of 15, gone to grad school in my spare time as an adult, twice, all to try and be comfortable later in life. I've always driven old cars, eaten beans-rice-pasta I make to save money, and watched where my money went even as my income finally increased.
I’m months away from being able to rent out my current condo or the new house, but I’m seeing things that may screw me all over.
I’ve found Zillow makes it easy to track rental listings (redfin lacks this) so I am now finding in my current development a 2 br rented for 1575 while another is listed at 1950 which looks a nudge better than mine (but is not top floor). In my new hood a not-as-good basement down the street from me is renting for 1725 while luxury units, including basements, go for 2.6 to 3.2 k. I’m worried that my condo won’t rent for enough to cover the condo fee and mortgage - though in running those computations I also have to take into account tax deductions and the fact I’m getting an asset by collecting rent over time. Only 23 years until ownership?
In my new place, I’m freaking if I’m only getting 1.5k for something I paid 6 figures for. Let’s say after taxes I only get 15k a year from the rental - then the work won’t be paid for 6-7 years, and that without paying for the actual mortgage.
Worse yet, it’s not clear the city will even grant me a license to rent - it seems like 98% of people renting are not cleared by inspection via DCRA. I’m making up a figure, but every basement rental I look up has ceiling height at exactly the door frame - or 6’, while dc code requires a 7’ ceiling height. Current code requires wheel chair ramps - which I cannot do (I guess I could pay for a lift?), and sprinkler systems (which cost around 3500-16000 says internet searching).
I’m losing an average of over $1200 monthly right now paying for both places with no rental income. However, if in a worst-case-scenario I’m only making $3,000 in rent, then my measly profit overall is $1800 or so a month or $15-20k annually.
Being more objective, I might yet net 4,000 rent at 2k each, or 3500 total. Even my worst case scenario isn’t horrible - if I make 20k annually, the expense is paid for in 5 years and generates income indefinitely after that. Also, the huge cost I sunk into the place of a quarter mil includes my renovation in my own space, which more than doubles my living space and super-upgrades my entire standard of living. I’m also ignoring the girlfriend moving in when I run my numbers.
I just don’t see the advantage over stocks - though a recent more objective review of my stocks leaves me with the conclusion I’m doing no better in stock picking, in fact worse, than motley fool’s fund.
With the sexual assault of a man where my girlfriend is looking to take the bus, and the murder between me and the public housing projects, and the activist politician trying to put projects next to my block, and some friends moving from beside the murderous projects because the drug dealers are starting to become more directly menacing with comments and “arguments,” I feel comfortable there - but guests? The girlfriend? What is actually going to happen with my market - will it be more like the pinball palace and meridian pint, or the check cashing and yum bullet-proof glass market?
If this works out, some day when I try to describe the risks I took and the pain this has caused, I know I’ll have a lot of unsympathetic people who don’t relate to having the experience of spending decades investing for the future and risking it all over a period of time. People will dismiss the issue as “some rich guy” or accuse me of always knowing it would work. I, of course, will smile politely before crushing their tiny little skulls.
I’m months away from being able to rent out my current condo or the new house, but I’m seeing things that may screw me all over.
I’ve found Zillow makes it easy to track rental listings (redfin lacks this) so I am now finding in my current development a 2 br rented for 1575 while another is listed at 1950 which looks a nudge better than mine (but is not top floor). In my new hood a not-as-good basement down the street from me is renting for 1725 while luxury units, including basements, go for 2.6 to 3.2 k. I’m worried that my condo won’t rent for enough to cover the condo fee and mortgage - though in running those computations I also have to take into account tax deductions and the fact I’m getting an asset by collecting rent over time. Only 23 years until ownership?
In my new place, I’m freaking if I’m only getting 1.5k for something I paid 6 figures for. Let’s say after taxes I only get 15k a year from the rental - then the work won’t be paid for 6-7 years, and that without paying for the actual mortgage.
Worse yet, it’s not clear the city will even grant me a license to rent - it seems like 98% of people renting are not cleared by inspection via DCRA. I’m making up a figure, but every basement rental I look up has ceiling height at exactly the door frame - or 6’, while dc code requires a 7’ ceiling height. Current code requires wheel chair ramps - which I cannot do (I guess I could pay for a lift?), and sprinkler systems (which cost around 3500-16000 says internet searching).
I’m losing an average of over $1200 monthly right now paying for both places with no rental income. However, if in a worst-case-scenario I’m only making $3,000 in rent, then my measly profit overall is $1800 or so a month or $15-20k annually.
Being more objective, I might yet net 4,000 rent at 2k each, or 3500 total. Even my worst case scenario isn’t horrible - if I make 20k annually, the expense is paid for in 5 years and generates income indefinitely after that. Also, the huge cost I sunk into the place of a quarter mil includes my renovation in my own space, which more than doubles my living space and super-upgrades my entire standard of living. I’m also ignoring the girlfriend moving in when I run my numbers.
I just don’t see the advantage over stocks - though a recent more objective review of my stocks leaves me with the conclusion I’m doing no better in stock picking, in fact worse, than motley fool’s fund.
With the sexual assault of a man where my girlfriend is looking to take the bus, and the murder between me and the public housing projects, and the activist politician trying to put projects next to my block, and some friends moving from beside the murderous projects because the drug dealers are starting to become more directly menacing with comments and “arguments,” I feel comfortable there - but guests? The girlfriend? What is actually going to happen with my market - will it be more like the pinball palace and meridian pint, or the check cashing and yum bullet-proof glass market?
If this works out, some day when I try to describe the risks I took and the pain this has caused, I know I’ll have a lot of unsympathetic people who don’t relate to having the experience of spending decades investing for the future and risking it all over a period of time. People will dismiss the issue as “some rich guy” or accuse me of always knowing it would work. I, of course, will smile politely before crushing their tiny little skulls.
