12 AnnJim Drive, $1.250 million. Good Lord.
1 Quintard, Old Greenwich, $2.995 million, 72 Days on Market.
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lots of investors looking at low priced (1mm-ish) homes as rental properties
2x assessed and $600/sf… what a massive mistake. If it is an investment property, I hope their underwriting is tight.
North St school – If it rents for $5k/month the investor is cash flow neutral on a leveraged transaction with potential future price and rental appreciation with a self-amortizing mortgage
I paid $900 for North Street School. Rents for maybe $4,000 net. Break even or a tiny loss on rental. Appreciation is the reason to buy. If one holds for 5 years the rent is profitable.
The house I bought was way overassessed. I have an appointment to challenge the assessment. Not sure if I will have that much success as they told me the assessment is based on prices between 2005 and 2010. Hence my lower purchase price is not determinative of the assessment.
If 12 AnnJim was bought as rental, what kind of income could it get/month? $3000?+
LOL that Quintard has “staff quarters.” Back bedroom or maids room but staff quarters? 6 Meadowcroft has staff quarters baby.
Maybe $5200- $5500.
Real Estate Market is moving at a swift pace.
Where has the confidence come from?
Where are the buyers ‘old’ houses?
Look At FEBRUARY 2012
Still talking Kaali Nagy Marks Rd in 2013
In the lower price ranges, some buyers may be investors. Some people have children that may some day move into the investment homes. In the meantime, there are renters floating around for these places.
if i could afford 4500 a month i would be grossing 300k in order to to live comfortably and there’s no f’ing way i’d rent that house.
cracks me up the folks cutting a check for 800-1 mil thinking, “oh yeah, it’ll rent for 4-5k, which will be great and i’ll get upside potential too.”
yeah, it’s awesome till the boiler breaks. or roof leaks. or 75 year old cast iron sewage main drainpipe shatters. or sump fails. or tenant locks themselves out accidentally. or you pay the prop manager a combined 15% of gross to broker and manage. or you spend several k or so every few years on paint and maintenance. or 60+ bucks a month for trash and recycling. or 200 mo. for jose to mow the lawn and prune the hedges. or 250-300/mo for prop insurance. or another 20-30/mo for every 1 mil of extra umbrella liability sufficient to cover your sorry ass.
yeah, after 20+ years, it just might be worth it.
I tried the rental scene…….once……..that’s all you need……once.
Cheap As.Ho.. renters are the worst. To get more for their money they take it out on the property. One word. Norwalk. That’s where Houusing Court takes place.
My own house in Greenwich has had minimal expense since the 1970s. There is no need to pay 15% to a broker. It is easy to pick up the phone and call a repair person if needed. My house has paint but my rental house has siding. A tenant pays the lawn service.
Sure there are repairs but they have been nornal replacement costs.
My own house has appreciated much more than 10 times and much more than the rate of inflation.
Many houses in Greenwich have no sewers (only septic, which needs periodic cleaning) and do no need a sump. Any smart landlord has an extra set of keys. Most people investing actually live in Greenwich and can handle all the calls for inside repairs and drive by the outside to be sure the property is well maintained. There is normal maintenance like a new roof, boiler or hot water tank, but these are built into the cost a landlord figures out. Property insurance is about half of what you suggest for my rental house, and the tenant pays all lawn service and trash collection I guess if several large trees fall on the property, that would be landlord expense, and could add up, but most other things are predictable over the long term.
The point is that a rental house in a good school district and desirable area for families like Annjim is break even at best to start. However, inflation has been around as long as I have been alive, and is the landlord’s friend. A fixed rate mortgage, the biggest expense of a rental house, never increases. The taxes, insurance and maintenance rise with inflation, but so does the rent.
Because the taxes in Greenwich are low, the landlord can often offer a house like this for rent for a little less than a comparable home in Westchester.
If there is appreciation, the rental house can be sold without paying taxes. The appreciation can be offset with capital losses or the full proceeds reinvested in another property in a 1031 exchange.
There was a rent buy /calculator on this blog that showed how much money is saved by buying over renting. I think the link is broken, but after 5 years or so, there is a reasonable profit on rent for an investor.
Right now investors are in the $1 million market because they expect short-term price increases. Historically, after each recession, there has been a rapid increase in home prices. One never knows, but with the stock market at all-time highs and Manhattan at maybe 10% off peak prices at most and at peak prices for some apartments and homes, there is a reasonable chance that the short term appreciation for houses in the $1 million range may be pretty far above inflation.
In my case, I have children who are potential end users of the rental house in a few years, and I bought at the bottom of the market.
Just doing the math on Annjim and assuming the selle bought as an investment, they did a little better than inflation. Paid $737,500 in 1999. Using the CPI calculator, that is about $1,019 today.
Why sell now? Lets say this person put down 20% and now has $500,000ish left on the mortgage. The seller has $700,000ish to put down on another place and may be able to buy a place for $2.1 or two places at price range in the $1 million range. So this person has gone from one house to two with only a 20% down payment.
Funky math, but that is how people made money in my parents’ generation.
Who were Ann and Jim? Were they friends of Jo and Fran. Greenwich’s 50’s trailer park dark side.
AnnJim? Gawd awful. Another developer immortalizing his kids I suppose, first time I’ve ever seen 2 for 1 though.
Off topic here- did you see that Baba Booey stole your blog name for his new TV show?
A couple of readers pointed that out (buried in the comments, so you’re excused for not spotting it!) but as I said, there’s no copyight on title, I have no trademark registration, nor do I want one – it’s a common phrase of long standing,though perhaps he did grab the twist on that phrase, but most of all, from a couple of emails I’ve received from him in the past, Baba is a fan, or at least once was. So it’s a compliment, no? I wish him success – if I watched TV, I’d even tune in to cheer him on.
well, I am a fan of both of you.
This house looks out (from the back) on our nicely wooded back lot on Stanwich Lane. It has been rented for quite a while to various tenants and has started to look quite seedy. I hope the new owners spruce up what (from the rear) was becoming quite a dump. Good for the sellers, however, who I happen to know bought the house a number of years ago for around $700K.
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