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It doesn't destroy the property or take it out of supply. But it also strongly disincentivizes potential investors in building new rental properties. Which mak

by jayski 3y ago

It doesn't destroy the property or take it out of supply. But it also strongly disincentivizes potential investors in building new rental properties. Which makes perfect sense,if you inherited 5million euro would you spend it building rent controlled apartments or put into stocks&bonds?

dehrmann 3y ago
Or in a US scenario, would you rather build rentals in Texas or California?
- toomuchtodo 3y ago
  California. It’s the world’s fifth largest economy. I will take some regulatory risk over volatility in Texas. California vacancy rates speak for themselves, there is voracious demand for housing there vs Texas. Texas also has the nation’s 7th highest property tax rate. https://austin.culturemap.com/news/real-estate/texas-property-tax-rate-highest/ https://austin.culturemap.com/news/real-estate/texas-propert...
  - jajko 3y ago
    [flagged]
    - toomuchtodo 3y ago
      In my experience, it is crucial to avoid human nature, and instead, simply evaluate the math. It either works or it doesn’t, no emotion. Emotion destroys risk adjusted returns, and is harmful to preserving capital.
      - jajko 3y ago
        If you don't evaluate emotions too, you are missing most of human reality in your equations, like it or not. Stuff will not go as expected.
  - dehrmann 3y ago
    > It’s the world’s fifth largest economy You're comparing $3.9T to $2.4T, but that's still not the metric you look at. It's whether you're a landlord in a town of 5,000, a mid-sized city, or a 2M metro, and what the local economy looks like. > California vacancy rates speak for themselves This goes two ways. On one hand, it's an opportunity. On the other, it's an opportunity a lot of people clearly don't want to take. > Texas also has the nation’s 7th highest property tax rate As long as it's consistent and the regulators allow it, you just pass it on to tenants. CA's Prop 13, while making overall property taxes lower, puts you at a weird disadvantage compared to incumbent landlords.

by jayski 3y ago

dehrmann 3y ago

Or in a US scenario, would you rather build rentals in Texas or California?

toomuchtodo 3y ago
California. It’s the world’s fifth largest economy. I will take some regulatory risk over volatility in Texas. California vacancy rates speak for themselves, there is voracious demand for housing there vs Texas. Texas also has the nation’s 7th highest property tax rate. https://austin.culturemap.com/news/real-estate/texas-property-tax-rate-highest/ https://austin.culturemap.com/news/real-estate/texas-propert...
- jajko 3y ago
  [flagged]
  - toomuchtodo 3y ago
    In my experience, it is crucial to avoid human nature, and instead, simply evaluate the math. It either works or it doesn’t, no emotion. Emotion destroys risk adjusted returns, and is harmful to preserving capital.
    - jajko 3y ago
      If you don't evaluate emotions too, you are missing most of human reality in your equations, like it or not. Stuff will not go as expected.
- dehrmann 3y ago
  > It’s the world’s fifth largest economy You're comparing $3.9T to $2.4T, but that's still not the metric you look at. It's whether you're a landlord in a town of 5,000, a mid-sized city, or a 2M metro, and what the local economy looks like. > California vacancy rates speak for themselves This goes two ways. On one hand, it's an opportunity. On the other, it's an opportunity a lot of people clearly don't want to take. > Texas also has the nation’s 7th highest property tax rate As long as it's consistent and the regulators allow it, you just pass it on to tenants. CA's Prop 13, while making overall property taxes lower, puts you at a weird disadvantage compared to incumbent landlords.