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Treasury bonds pay 4.5% right now, so you would at least need to make 6% on your housing investment. There aren’t a lot of properties that you can buy that wou
by rdtwo 4y ago
Treasury bonds pay 4.5% right now, so you would at least need to make 6% on your housing investment.
There aren’t a lot of properties that you can buy that would yield 6% (of purchase price) rent a year.
- CuriouslyC 4y agoIt doesn't need to yield 6% from rent, it needs to yeild 6% from rent + (home appreciation - maintenance), which is pretty easy if home prices are depressed due to temporarily high interest rates and a glut of new construction, since appreciation will kick in hard as soon as interest rates cool off and new construction scales back.
- rdtwo 4y agoThat’s assuming that we will ever see 0-2% interest rates again. Where we are right now is right in line with historic norms and they will probably hit a lot higher. People are already getting squeezed in other areas I don’t see how they are going to be able to push rents much higher
- CuriouslyC 4y agoEasy. Push rents higher slowly, and when occupancy rates start to go down enough that expected future rent increases will result in a profit loss you stop.