tag:blogger.com,1999:blog-8238580336028028965.post4367971797227715774..comments2021-05-19T06:18:15.443-07:00Comments on Profitable Investing Strategies: Popularity Contests!Jay Palmquisthttp://www.blogger.com/profile/16579050903015122895noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-8238580336028028965.post-28083313956018461972008-09-23T11:32:00.000-07:002008-09-23T11:32:00.000-07:00Yes, I'm a greedy SOB!!!!!! Actually I love being ...Yes, I'm a greedy SOB!!!!!! Actually I love being the hero for the folks that get rejected by other professional landlords (and especially the amateurs).<BR/><BR/>Regarding Robert Campbell's predictions, I haven't read them.<BR/><BR/>However, as for how far the rents on multi-s will drop. That IS the question of the times.<BR/><BR/>I can only guess based on past experience in the mid '90's that rents could fall 15% (at least).<BR/><BR/>Many apartment owners that refused to adjust their rents to reflect demand had huge vacancies. Some couldn't reduce their rents without actual negative cash flow. I know I was in denial about rents for a while, and had a vacancy issue myself.<BR/><BR/>I can't argue with Dave Lindahl, except to say that apartments offer a little more insulation against up and down turns. Everybody doesn't move at once.<BR/><BR/>If we read John T. Reed's book on property management he suggests keeping track of moving averages on rent/vacancies. This has really been helpful in keeping extremely close and accurate track of the vacancy factor. If I'm not mistaken Reed suggests (at least this is my operating principal) that if the vacancy factor drops under five percent, my rents are too low and I'm losing money. If the vacancy climbs above five percent, I'm also losing money, and need to either upgrade the building, or lower the rents to reflect demand when it's not something in my control. Five percent vacancy reflects the best operating temperature.<BR/><BR/>That said, there a bunch of stuff that causes a deterioration of the actual income levels. That's the appearance (maintenance), and over all marketability of the building. A building that is allowed to look dumpy will REALLY negatively impact the bottom line, regardless of market conditions.<BR/><BR/>I would add that when the market is soft, that buildings we own, better look spiffier than anything around. People "rent" buildings, as much as they rent an apartment. And if there's a genuine competitive alternative, I want to be the first choice.<BR/><BR/>That's alot!!! Whew!Jay Palmquisthttps://www.blogger.com/profile/16579050903015122895noreply@blogger.comtag:blogger.com,1999:blog-8238580336028028965.post-22795695968738049722008-09-23T11:26:00.000-07:002008-09-23T11:26:00.000-07:00This comment has been removed by the author.Jay Palmquisthttps://www.blogger.com/profile/16579050903015122895noreply@blogger.comtag:blogger.com,1999:blog-8238580336028028965.post-79515233883102246892008-09-22T18:54:00.000-07:002008-09-22T18:54:00.000-07:00Jay, you greedy capitalist b@st@rd.....LOL. Absol...Jay, you greedy capitalist b@st@rd.....LOL. <BR/><BR/>Absolutely brilliant. I'd heard of this strategy for selling, but it had never occured to me to do it for rents as well. <BR/><BR/>On the subject of rentals: Dave Lindahl says the drop in a city's apartment market lags the drop in the single-family market by about a year, due to people staying in the area and renting (after losing their house) before they move on. I was wondering if you'd mind sharing your experience and/or predictions as far as when/how much the rental markets around here will drop.<BR/><BR/>Having heard Robert Campbell's warnings about rents going down, in your experience, about what type of an adjustment will we see? I know some areas have declined to the point where they'll cash flow, but I'm wondering how long this crazy rental market will last, and approximately how much of a drop we're looking at.Anonymousnoreply@blogger.com