All Forum Posts by: Royce Talbo

@Richard F. do you have a direct link to the new law? the link provided is just a flyer and the more info link on the page doesnt work.  

seems like you cant discriminate against the source of income like having a voucher or not, but doesnt indicate that you cant discriminate actual income.  so maybe you can still require 3xrent? other part that is unclear is where it says mainly applies to LL who own more than 4 rentals. so does that mean that you can still put no sec 8 if you own 3 or less rentals? seems like it might not affect most if not all LL. 

 

thanks for the reply guys.  My concern when asking this question was that since its only 1-3 months tenants wouldnt clean and just let things sit and chalk it up to wear and tear.  I had some long term tenants who would let coffee drops sit and stain the white cabinets and another that looks like they didnt clean the tub in months. cleaners did the best they could, but it still didnt look like new and had a slight stain.  

@January Johnson sounds like monthly would be a good fit. for the 1 month stays it would be at turn over and for the longer 3 month stays it will just be upkeep.  

How do you guys clean these? Do you have a cleaning company go in only after turn over and the traveler has to clean while they are there for the month or 3 months? Or do you guys schedule a cleaning company to come by weekly?

why do cashflow people think that appreciation people only go for appreciation? buying in primary areas that appreciate well is like scaling down and buying a or b class neighborhoods.  would you rather buy a couple b class properties that dont cashflow as well on paper or 10 f class properties that cashflow well on paper? yes you can get 10 houses that cashflow better but you also get 10 higher chances that a tenant will destroy your property costing you a year or more to repair.  cap rate isnt really used in residential but cap rate is a measure of risk. if you apply cap rates to markets you will see primary markets that appreciate have lower caps meaning its less risky than cashflow markets. the probability that you will have more damage, evictions, vacancies etc. in cashflow markets are higher leading to lower overall returns.

its all a numbers game but you have to factor in all the variables.  if you dont factor in risks and everything else on paper yes cashflow markets look better, but if you factor in everything over years then primary markets do better.  the bottom line is, in the long run after you factor in everything, primary markets do better and are less headache.

@David Gotsill thanks for the links ill check it out.  I remember years ago when i looked into loans in japan around 2008 that was the condition. i was kind of shocked it changed when i read that article but they might have been wrong. in any case i dont think i dont think it would make sense in my situation since the units i was looking at are cheap and depreciated out so not much of a collateral. 

thanks for the insight i read i would have to get a license or certificate or something to operate but didnt know about the cap on days. ltr seems more and more the better route.  heres my play that i was thinking about, instead of getting something in the midwest that doesnt appreciate i would get something in japan for the same price.  something that is already depreciated out wouldnt command high rents but i felt would be the bottom of what rents could go and would be stable.  i know newer places would depreciate and rents along with it, but older places would be stabilized.  I think it terms for cars like if you bought a cheap 20yr old car you for like $3000 could use it for 10yrs while maintaining it and sell if for just about the same price.  japan vs midwest, i felt japan would have less evictions and less chance of tenant destroying the place.  when the yen gains back some strength that would mean the rents and value though staying the same in yen would increase in usd thus similar to appreciation. 

@David Gotsill no, i have some cash and a heloc. from what i read once i establish a rental business i can start borrowing in Japan from Japanese lenders. not looking for multifamily or anything big just couple 1bed/1bath condos. at first i was looking at airbnb since Japan finally opened up for tourist and a bunch of my friends are back visiting family and vacationing there.  pre pandemic i used to go there at least once a year and my mother in law used to go about 6+ times/yr, so i thought it would be a good place to have a 2nd home type of thing.  then i started looking at ltr to see what the numbers were if airbnb fails and can i still cover as a ltr. while researching it seems like ltr might be a better play as rent is pretty much guaranteed. 

@Taylor L. I would agree with you if it was only a speculation play, but what i have noticed is that the properties i am looking at, its price point is that of d and f neighborhoods in the midwest. in japan those prices are for c/b areas due to the culture. they have a delinquency rate of only 1.6% and they have renters insurance that not only covers damages but missed rent.  basically guarantee rent like sec 8 but without the tenants destroying things and skipping out. 

a lot of single japanese live in a small apartment that they basically use just to sleep, shower and store their things.  sometimes they dont even go home because they miss the last train and just spend the night at karaoke or internet cafes. most of the day they spend out which means very little wear and tear.  my friends husband only spends about 6-7 hours at home and pretty much only sees his kids sleeping or on the weekends which is sad but that is the average life style in japan.  

for property taxes if its an older home that is depreciated out you only get taxed on the land value. havent calculated returns yet as i dont know all the expenses but thats why i wanted to see who else is investing there. annual rent to price is about 8-12% for the places i have looked at. 

basically low maint tenants with guarantee rent is drawing me to take that chance on speculation on currency exchange. there is a lot more i need to research but thats why i wanted to see if anyone is investing there now.

Anyone investing in Japan now that the yen is weakening? buying now vs pre-pandemic the yen has dropped about 38%. Japan is a cashflow not an appreciation market. the fed raised rates a lot and plan to pivot in the coming years and BOJ hasnt risen rates but probably will sometime in the future to fight off inflation, it could be a good time to enter. buy cheap houses now with cheap rents then when things go back to normal in several years your cashflow will increase and what you can sell it for will too when converting back to usd. 

@Kekila Keuma you said non have the means to purchase the house for market value. are you saying they cant afford the 1mil or their share to pay out siblings?  share to pay out siblings is equity 700k/3 and debt 300k/3 so they would essentially have to 233.33k equity and 100k in debt each. since the siblings have to pay off the debt they would get 133.33k each meaning who ever buys it has to only qualify for the whole debt of 300k + 266.66k in equity or 566.66k total.  if none of your siblings can get a 566k mortgage then its probably best to sell it after your dad passes and split the profits. 

i dont know how your family is but money can tear families apart and its not worth trying to come up with a creative way to keep the house. keep it simple or emotions and relationships will get complicated.  

best bet here is appreciation plays. look for single family homes that you can easily build an ADU. probably wont cashflow at first but again with appreciation comes rent growth and it will eventually cashflow very well. you can still find a bunch under 1mil. if you can get into the hoopili neighborhoods. its a master community that is being built out in ewa/kapolei. has a rail station, a mall near by, a college, will have other schools and has some businesses. look at the flex units in the townhouses(extremely hard to get) but they are allowed to run a business out of the bottom and they have 4 parking. depending on the model the layout can easily be split into 2 units. also rents are pretty high since its new builds, the demand and amenities are there.

something i forgot to mention hawaii also has a GE tax so you need to account for that as well. Oahu is 4.5% of gross rent, outer islands are 4%. good luck.