All Forum Posts by: Sam K.

This is a hypothetical question at this point, but could not find precedence or a loan calculator which could help me as most calculators out on the web presume a positive number for interest rates. However, the way the central banks are going around the world, negative interest rates could be here in a while. As I am writing this some countries in Europe ( I believe Denmark for example) already has negative interest rates for mortgages taken out, not just the fed rate.

So first the practical question:

Anyone have a pointer to a tool which can calculate amortization tables with a negative interest rate . I'm sure I could probably put one together in Excel but I"m sure that road has been traveled on before m.

And the hypothetical questions up for discussion:

- What is the best strategy if one expects negative interest rates to be here in the next 1-3 years ? 

- Impact on real estate prices ? or other assets for that matter..

- Inflationary or deflationary effect in the intermediate to long term ? What happens to the value of money ?

- Impact on credit availability ?

Feel free to add questions of your own. I realize this is a hypothetical question which on the surface is unthinkable, but simply want to play out the what/if conversation with fellow investors....Any and all input welcome !

--Sam

Ditto. Acv is the way to go in this case. Recently had a fire claim on an ACV policy. Was positively surprised to find out that the depreciation deduction often talked about on cash policies applies to materials only. At least here in WI they could not depreciate the labor amounts. In my situation the check cut at the end allowed me to fix the place up and was enough to recover even most of my large deductable. Not surprising when you think about labor costs vs rental grade material costs.

For the record 3 starting engineers in the bay area would gross well over 200k annually. Very typical housing arrangement in the area for young professionals.

For whatever is worth right around 60 % is what I come up with for my duplexes in West Allis and Milwaukee... Taxes are a big contributor to that and age of buildings causes higher maintenance as well. 60-65 % is normal including property management. If you had a bang up year great ! Put some away for the expense around the corner :)

I like Jennifer's approach if you have enough passing by traffic. I have filled a three unit residential last year after rehab. Newly rehabbed units typically have no issues renting if priced right. Mine is in a lower income neighborhood with large apartment complexes competing. Although there are washer dryer hookups in basement for each unit I have put in a washer dryer on a separate water heater which is free to use for tenants to stand out little from the crowd.

Is anybody in the immediate neighborhood getting the higher rent you are looking for ? Why not test market before committing to a large expense ?

Thls will my shortest post ever. If this is your firat investment simply DO NOT DO IT. Get your feet wet local first. And learn the pitfalls of this business first,

Not as much of a comment on numbers but a question back... Investing in real estate is not like buying a stock. Do you have feet on the ground in Milwaukee ? And I do not mean a property manager.... If not I would not go for such a remote first investment. There is a lot to learn in this business...as I am still finding out after 3 years and I am only a 30 min drive away....

Small leaks can add over time such as toilets etc. i had some bills almost double from usual , back to normal after redoing most of the flush mechanism. Also if you have older toilets the new low gallon per flush ones will make a difference especially if many people are staying. Worth the few hundred bucks to install the new toilets especially if you have the older 3+ gpf type. Also ensure you low flow shower heads if already not in. Every little bit helps over time !

Something is missing here about 12k in gross rents and an NOI of around 11 k per month. Please keep in mind that the NOI is after taxes, insurance, any utilities paid by owner, maintenance, vacancy allowance, management fees etc. With the above number simply too good to be true ...