Own rental property? Your thoughts on how this could impact you:
- Thread starter sgip
- Start date
NEW -> Contingent Buyer Assistance Program
I personally do not agree in forgiving student loans. People have a choice their major or go to a state university/private university. Taxpayers should not foot the bill since they chose a private school or wrong major.
For example: Does a school teacher need to go to Harvard to be a public school teacher? (A person can go there, but that is their responsibility to pay for it.)
What part of college is going to be free? Tuition? Tuition & books? Tuition, books, fees? The before plus the $40K you rack up a year living in many of the spots our public schools are at?
What about private schools? Why should any part of USC's college costs be eliminated by the taxpayer? Harvard?
I have a better solution. The university start spending their endowments to provide a free education to the students that are admitted or maybe we start taxing their endowments.
Except for the first 2 sentences about the homeless, I share your sentiment. I think it is important for people to be able to buy a home for themselves to live in. There is a lot of money out there and many have been buying second homes, vacation rentals, and income properties. But those properties are not typically the ones that first time homebuyers are bidding on. For the homes that first time homebuyers are bidding on, are they competing with RE investors or are they competing with other first time homebuyers?
It seems like we always start with well-intentioned ideas - let's create student loans so smart kids who don't have money can afford college! And then huge industries (fake colleges and real colleges) create bloat (continually increased tuition) and take advantage of it and put students into tons of debt. And then the government has to bail everyone out.
IMO the kind of restrictions that you are suggesting may be valid for highly dense urban areas (with few realistic alternatives), where if not for government control, housing will become unaffordable and most residents become renters of small flats with punishing rent and lease terms. Seoul and Hong Kong comes to mind. You may want to look up Singapore's model which includes both affordable public housing for purchase, and smaller private developments without price caps.
For comparison, this 710 sq ft 3 bed 2 bath HDB (affordable public housing) flat in Geylang cost 310K SGD ($232k USD) on 99 year leasehold (53 years remaining):https://www.propertyguru.com.sg/listing/hdb-for-sale-21-eunos-crescent-23464221
Versus this 361 sq ft 2 bed 1 bath flat in Wan Chai cost 5.3 million HKD ($682K USD):https://www.realtor.com/internation...nchai-wan-chai-hong-kong-island-190066144207/
How do you squeeze 2 bed 1 bath in 361 sq ft? See the photos.
Such conditions does not describe many parts of Southern California, where dense high-rises are rare. Here you have the option to live further inland with cheaper real estate on bigger lots. I personally moved out of a condo in Irvine so I can purchase a 4 bed (single story) SFR w/yard in LA County, and commute to work by train (to Irvine).
On homeless issue, assuming that we're talking about working poor who cannot realistically afford rent, what you need is not only government action but also investors who will build more rental units to increase supply. The individual may have bad credit from debt and prior evictions, outstanding debts from medical bills that wiped them out financially, health conditions that restrict the type of work they can do, and numerous other issues that will require government/social services to remedy.
Moving to lower cost areas is a solution, but unless you're in an area without traffic, how realistic is it to do a 2-4 hr round trip each day to get to work? For example, working in Santa Monica/Downtown LA and coming from San Fernando Valley/Torrance/East LA? Its easy for me to say that because I can work from home, but we have to understand that not everyone has that luxury.
Here is a website that shows the following statement:
Mental health problems, addiction, childhood trauma, interaction with the criminal justice system and poverty all play significant roles in whether someone becomes homeless. But the primary reason? They can no longer afford rent.
About 1.3 million California renter households are considered ?extremely low income,? making less than $25,000 a year, according to the California Housing Partnership, a nonprofit organization the state created to advise affordable housing builders. Predictably, these financially strapped households can barely afford the state?s escalating rents, and are most at risk of falling into homelessness.
Link to article:https://calmatters.org/explainers/c...plained/#6b1e7820-2356-11ea-b99f-f7278a5b3af5
As for the argument of being owed a shelter and not a home, I agree. But I think where we differ is real estate should be treated as an asset where buyers that are looking to live there should have priority over RE investors. Again, a purpose of a home is to put a roof over you, not to make $. Its not to say one cannot invest in RE, its that there should be priority for ones that plan to live in the property over ones that are trying to make $ from it. We may have different values but I do find it quite ridiculous when first time home buyers are competing against RE investors. One owns 0 property and the RE investor could have many.
Schools should start eliminating majors that have no value in the real world job market (i.e. most liberal arts majors). Maybe provide subsidies for students who are in need and complete a STEM major?
It may be true that there's low percentage that is STEM related but that'll continue to increase due to advances in technology. The other area where the gov't can help is by providing incentives for people to go to trade school to become specialty trades such as plumbers, electricians, carpenters, etc.
Hence why these trades people's wages will continue to rise (they already have in recent years).
It's more than a recent trend.
We've under-invested in technical, vocational, trade schooling for decades. Only 6% of American Highschool students are in trades/vocational/technical tracks. In Germany, that number is 59%. Look at that gulf.
The narrative that college is the end-all and be-all has been pushed onto kids for far too long. To make matters worse, the cost of college had increased more than 250% since the mid 1990s.
41% of college students did not graduate in 6 years. Many will never graduate.
The answer is not free college or steering more kids into college.
As for STEM related jobs growing due to advances in technology, that's for sure happening.
But the speed of STEM job growth has not been exponential in the past, up from roughly 6% to 8% in the past decade.
Even if we suddenly have exponential growth in STEM jobs, enough to cater to the 32% of Americans who go to college, there's still 2/3 of the non-college educated workforce to worry about.
This may shock some people, but the average American is a high school graduate working in one of these fields: Administrative and Clerical Work, Retail Work, Food Service and Food Prep, Trucking Driving and Transportation, and Manufacturing.
These covers about half the entire job market.
Agree with USC on the gov't providing incentives for people to go to trade school such as plumbers, electricians, carpenters, AC repair etc.
Expanding STEM is just a shinny political talking point, actually does not move the needle much in the grand scheme of things.
Those majors don't pay as well but they are important to a well-rounded society. English major may not earn as much as a run-of-the-mill coder but for every Google and FB founder from a pool of comp sci major, there will be some super stars emerging from English and liberal arts graduates.
Cornflakes said:
I personally do not agree in forgiving student loans. People have a choice their major or go to a state university/private university. Taxpayers should not foot the bill since they chose a private school or wrong major.
For example: Does a school teacher need to go to Harvard to be a public school teacher? (A person can go there, but that is their responsibility to pay for it.)
qwerty
Well-known member
Yeah and if they are going to forgive student loans they sure as hell better reform the whole college cost system. Once the loans are forgiven without any tuition restrictions colleges will just continue to increase tuition as much as possible since they know the government will be waiting in the wings to sound round 2 of forgiveness in another 10-15 years
morekaos
Well-known member
I'm being told by bankers I know (fairly high up and at several different firms) that the banks have been reserving vast amounts and will be going on a foreclosure spree later this year on income property. They said FHA has completely stopped even looking at refis in the income, second home markets. They think with the eviction moratoriums and rent abatements that they have the owners over a barrel. Banks will make a killing taking back property at below market prices and are willing to take the near term heat for it to beef up in house portfolios. Scummy, but what do you expect from bankers?
nosuchreality
Well-known member
qwerty said:
What part of college is going to be free? Tuition? Tuition & books? Tuition, books, fees? The before plus the $40K you rack up a year living in many of the spots our public schools are at?
What about private schools? Why should any part of USC's college costs be eliminated by the taxpayer? Harvard?
I have a better solution. The university start spending their endowments to provide a free education to the students that are admitted or maybe we start taxing their endowments.
sleepy5136 said:
Except for the first 2 sentences about the homeless, I share your sentiment. I think it is important for people to be able to buy a home for themselves to live in. There is a lot of money out there and many have been buying second homes, vacation rentals, and income properties. But those properties are not typically the ones that first time homebuyers are bidding on. For the homes that first time homebuyers are bidding on, are they competing with RE investors or are they competing with other first time homebuyers?
qwerty said:
It seems like we always start with well-intentioned ideas - let's create student loans so smart kids who don't have money can afford college! And then huge industries (fake colleges and real colleges) create bloat (continually increased tuition) and take advantage of it and put students into tons of debt. And then the government has to bail everyone out.
momopi
Well-known member
sleepy5136 said:
IMO the kind of restrictions that you are suggesting may be valid for highly dense urban areas (with few realistic alternatives), where if not for government control, housing will become unaffordable and most residents become renters of small flats with punishing rent and lease terms. Seoul and Hong Kong comes to mind. You may want to look up Singapore's model which includes both affordable public housing for purchase, and smaller private developments without price caps.
For comparison, this 710 sq ft 3 bed 2 bath HDB (affordable public housing) flat in Geylang cost 310K SGD ($232k USD) on 99 year leasehold (53 years remaining):https://www.propertyguru.com.sg/listing/hdb-for-sale-21-eunos-crescent-23464221
Versus this 361 sq ft 2 bed 1 bath flat in Wan Chai cost 5.3 million HKD ($682K USD):https://www.realtor.com/internation...nchai-wan-chai-hong-kong-island-190066144207/
How do you squeeze 2 bed 1 bath in 361 sq ft? See the photos.
Such conditions does not describe many parts of Southern California, where dense high-rises are rare. Here you have the option to live further inland with cheaper real estate on bigger lots. I personally moved out of a condo in Irvine so I can purchase a 4 bed (single story) SFR w/yard in LA County, and commute to work by train (to Irvine).
On homeless issue, assuming that we're talking about working poor who cannot realistically afford rent, what you need is not only government action but also investors who will build more rental units to increase supply. The individual may have bad credit from debt and prior evictions, outstanding debts from medical bills that wiped them out financially, health conditions that restrict the type of work they can do, and numerous other issues that will require government/social services to remedy.
sleepy5136
Well-known member
Isn't it interesting how politicians are looking to forgive student loans instead of focusing on the root cause of all this? It's the institutions. How does building new buildings every year contribute to a "better" learning environment? Instead of putting institutions responsible for the mess that has been done, they decide to use public tax dollars to "temporarily" solve the issue.
sleepy5136
Well-known member
Yeah, but the majority of homeless is NOT due to mental health, drug usage, etc. which you mentioned. It is working Americans that do not make enough income to afford rents.qwerty said:
Moving to lower cost areas is a solution, but unless you're in an area without traffic, how realistic is it to do a 2-4 hr round trip each day to get to work? For example, working in Santa Monica/Downtown LA and coming from San Fernando Valley/Torrance/East LA? Its easy for me to say that because I can work from home, but we have to understand that not everyone has that luxury.
sleepy5136
Well-known member
Can you please share your data point to support your argument on this?Soylent Green Is People said:@Aquabliss - looks like with your proposal on stock purchase restrictions I'll never be able to buy...
@Sleepy5136 - I don't know what your exposure is to the Homeless Population in California, but I'd welcome you to ride along with me and see it up close some time. PM me for details. The homeless problem is in fact a mental illness issue front and center. The secondary issue is high rent costs. Not everyone is owed the opportunity to own a home. They are owed shelter - in this case affordable rent - but a home? That's another story.
@USC. Amen. That said, a .1c to .5c individual stock transaction tax (buy or sell) would take care of most of the governments financing needs quickly - however I don't imagine seeing Satan making snowballs at home just yet.
Tax breaks tend to layer over the years similar to the way sedimentary rocks form, and at some point in time a jackhammer needs to be applied to them. If the Progressives really want to open up "affordable" housing, they have to make bold moves such as:
A) Eliminate 1031 exchange tax deferrals.
B) Eliminate real property depreciation for all 1-4 unit properties.
C) Restrict rent increase percentage to zero over CPI.
D) Highly tax all rental income over PITIHOA + 20% - 20% being a "reasonable profit"
There would be such a rush to the exits out of rental property ownership that all property values would decline rapidly. Inventory would pop higher and the sellers would no longer control the board. It's also "Green" (but not sustainable) since no new development would be needed to create more affordable homes. Tax policy changes would complete the task neatly.
Who cares if FNMA/FHLMC and Banks mortgage holdings would become significantly impacted? Who cares that Mom and Pop real estate owners are being targeted to pay "their fair share"? Who cares that corporate apartment investors wouldn't suffer but rather exponentially gain in value? No one seems to pay close attention to the law of unintended consequence as long as their feel good proposals continue to give off so much warm and fuzzy feels..... Yet this is likely the direction we are eventually headed towards as economic disparity widens.
My .02c
Here is a website that shows the following statement:
Mental health problems, addiction, childhood trauma, interaction with the criminal justice system and poverty all play significant roles in whether someone becomes homeless. But the primary reason? They can no longer afford rent.
About 1.3 million California renter households are considered ?extremely low income,? making less than $25,000 a year, according to the California Housing Partnership, a nonprofit organization the state created to advise affordable housing builders. Predictably, these financially strapped households can barely afford the state?s escalating rents, and are most at risk of falling into homelessness.
Link to article:https://calmatters.org/explainers/c...plained/#6b1e7820-2356-11ea-b99f-f7278a5b3af5
As for the argument of being owed a shelter and not a home, I agree. But I think where we differ is real estate should be treated as an asset where buyers that are looking to live there should have priority over RE investors. Again, a purpose of a home is to put a roof over you, not to make $. Its not to say one cannot invest in RE, its that there should be priority for ones that plan to live in the property over ones that are trying to make $ from it. We may have different values but I do find it quite ridiculous when first time home buyers are competing against RE investors. One owns 0 property and the RE investor could have many.
usctrojancpa
Well-known member
sleepy5136 said:
Schools should start eliminating majors that have no value in the real world job market (i.e. most liberal arts majors). Maybe provide subsidies for students who are in need and complete a STEM major?
usctrojancpa
Well-known member
Kenkoko said:
It may be true that there's low percentage that is STEM related but that'll continue to increase due to advances in technology. The other area where the gov't can help is by providing incentives for people to go to trade school to become specialty trades such as plumbers, electricians, carpenters, etc.
sleepy5136
Well-known member
I agree, but it seems like the trend now is to work in an office and get paid a decent wage. Plumbers, electricians, carpenters, mechanics are more labor intensive and depending on your connections the payout isn't that great. My dad does renovations for homes and I do see how labor intensive and difficult it is. Back then they couldn't charge that much but things are changing since it seems like we will have a shortage of those types of workers in the next 10 years or so.USCTrojanCPA said:
usctrojancpa
Well-known member
sleepy5136 said:
Hence why these trades people's wages will continue to rise (they already have in recent years).
sleepy5136 said:
It's more than a recent trend.
We've under-invested in technical, vocational, trade schooling for decades. Only 6% of American Highschool students are in trades/vocational/technical tracks. In Germany, that number is 59%. Look at that gulf.
The narrative that college is the end-all and be-all has been pushed onto kids for far too long. To make matters worse, the cost of college had increased more than 250% since the mid 1990s.
41% of college students did not graduate in 6 years. Many will never graduate.
The answer is not free college or steering more kids into college.
As for STEM related jobs growing due to advances in technology, that's for sure happening.
But the speed of STEM job growth has not been exponential in the past, up from roughly 6% to 8% in the past decade.
Even if we suddenly have exponential growth in STEM jobs, enough to cater to the 32% of Americans who go to college, there's still 2/3 of the non-college educated workforce to worry about.
This may shock some people, but the average American is a high school graduate working in one of these fields: Administrative and Clerical Work, Retail Work, Food Service and Food Prep, Trucking Driving and Transportation, and Manufacturing.
These covers about half the entire job market.
Agree with USC on the gov't providing incentives for people to go to trade school such as plumbers, electricians, carpenters, AC repair etc.
Expanding STEM is just a shinny political talking point, actually does not move the needle much in the grand scheme of things.
qwerty
Well-known member
The issue with colleges is that they want to be al things to all people. The first thing they need to do is eliminate the first two years of electives. Having to go into debt for general electives is ridiculous. Then they can trim the number of majors they offer.
To offset the revenue loss from the first two years of school and trimmed down majors they can offer trades.
How does this sound: USC school of Plumbing, HVAC and Electrical.
Perhaps I?ll start the QWERTY School of Accounting as it?s own trade school.
To offset the revenue loss from the first two years of school and trimmed down majors they can offer trades.
How does this sound: USC school of Plumbing, HVAC and Electrical.
Perhaps I?ll start the QWERTY School of Accounting as it?s own trade school.
Cornflakes
Active member
USCTrojanCPA said:
Those majors don't pay as well but they are important to a well-rounded society. English major may not earn as much as a run-of-the-mill coder but for every Google and FB founder from a pool of comp sci major, there will be some super stars emerging from English and liberal arts graduates.