[2000cs]

Originally Posted by NorCalAthlete

I feel like I'd rather have a rolling / flexible limitation on where / what markets were available to foreign investors.

That would help alleviate some of the pressures on SF, Palo Alto, San Jose, NYC, etc while boosting growth in slower / lower markets.

I dunno just a thought but the majority of foreign investors tend to aim for the big wealthy cities that already struggle with housing, exacerbating the problem.

So maybe a % of available housing for a given city and then once that % is hit, no more foreign investors - go find another city to buy up properties in.

I dunno just spitballing here.

Limiting supply (available investment properties) with no reduction in demand tends to raise prices.

This (foreign ownership of US property) was a big issue in the 1980s when Japan was growing fast. I think Pebble Beach golf course was sold to Japanese investors, for example. Then Japan’s economy waned and the investments were sold. Point being these things are transitory. Meanwhile those investment dollars help fund more apartments and other housing, and pay higher property taxes, etc. So there is some bump locally when there is foreign investment.

[2000cs]

Originally Posted by RickFLM4

Wouldn’t that just increase rents further to cover the higher taxes?

Yes. And this is already the case in many states. In FL, for example, you can have several property tax exemptions which lower the assessment on your home but only if you live in it. These don’t apply to rental/investment properties. So there is a break for owner-occupied housing and there are higher rents to cover the added property tax on rentals.

[ASAP]

Originally Posted by 2000cs

Yes. And this is already the case in many states. In FL, for example, you can have several property tax exemptions which lower the assessment on your home but only if you live in it. These don’t apply to rental/investment properties. So there is a break for owner-occupied housing and there are higher rents to cover the added property tax on rentals.

Do you guys really think that if there is a 10% tax on your 3rd property that you could ever rent it out for enough to make that up? Good luck with that because that essentially makes the place unrentable.

[RickFLM4]

Originally Posted by ASAP

Do you guys really think that if there is a 10% tax on your 3rd property that you could ever rent it out for enough to make that up? Good luck with that because that essentially makes the place unrentable.

Where else will renters live when they still can’t afford the down payment to purchase or when they don’t want to own?

Also, why punish people who own homes now by artificially attempting to manipulate prices downwards?

[ASAP]

Originally Posted by RickFLM4

Where else will renters live when they still can’t afford the down payment to purchase or when they don’t want to own?

Also, why punish people who own homes now by artificially attempting to manipulate prices downwards?

Well by default supply would naturally increase driving prices down hence making houses more affordable to the general public.

People could still rent from those who have a 2nd home to rent as mentioned or obviously an apartment (which would naturally have to go down in price too).

Also, why punish? Because no one needs 10 homes and we have created a housing crisis... our GOVT even hides this with the fact that they don't report housing as a part of inflation. People need to go back to thinking a house is a place to live not an investment.

Also... ban corporate housing purchase asap.

[zx10guy]

Originally Posted by ASAP

Well by default supply would naturally increase driving prices down hence making houses more affordable to the general public.

People could still rent from those who have a 2nd home to rent as mentioned or obviously an apartment (which would naturally have to go down in price too).

Also, why punish? Because no one needs 10 homes and we have created a housing crisis... our GOVT even hides this with the fact that they don't report housing as a part of inflation. People need to go back to thinking a house is a place to live not an investment.

Also... ban corporate housing purchase asap.

First point, people have been thinking about their house as an investment for years before the recent market surge. Well beyond even the last housing bubble. And this philosophy can also be seen with cars. Tons of people talk about the value of their cars x years out from purchase.

On your second point about who needs 10 homes and application of said punishments. So who determines how many homes is too much? What's this number? While I agree 10 homes, if that's the magical number, is a lot for one person to own. It's not my place to impose my own views on this person. Actually, I would be a bit jealous as this person obviously has their financial act together to be able to pull it off. I have two homes and I'm single. Does this metric of "hoarding" apply to me? Especially since I choose not to rent out my second home. Am I going to be punished because I made proper financial decisions to be able to own two homes? I've said it before and I still hold on to this opinion. The massive run up in home prices are due the fault of the buyers going into panic mode. Everyone talks about low inventory for the number of buyers. Most if not all of these buyers were living in some place before this frenzy started. They were not homeless which would require them to buy a place. I don't see a massive surge of homeless people entering the market. If people would stop with the foolishness of bidding up homes and just walk away then, the run up wouldn't be as severe as it has been.

[RickFLM4]

Originally Posted by ASAP

Well by default supply would naturally increase driving prices down hence making houses more affordable to the general public.

People could still rent from those who have a 2nd home to rent as mentioned or obviously an apartment (which would naturally have to go down in price too).

Also, why punish? Because no one needs 10 homes and we have created a housing crisis... our GOVT even hides this with the fact that they don't report housing as a part of inflation. People need to go back to thinking a house is a place to live not an investment.

Also... ban corporate housing purchase asap.

It’s not only those with 10 homes who would theoretically get hit with property value declines. Everyone would, including those with one home.

There are not nearly enough apartments to house people nor could they be built fast enough. Apartment rents would skyrocket if home rents went up due to surcharge / taxes. Realistically, I think your plan would just result in many more LLCs set up to own 1-2 homes to avoid the tax surcharge and / or higher taxes getting pushed to tenants.

[ASAP]

Originally Posted by zx10guy

First point, people have been thinking about their house as an investment for years before the recent market surge. Well beyond even the last housing bubble. And this philosophy can also be seen with cars. Tons of people talk about the value of their cars x years out from purchase.

On your second point about who needs 10 homes and application of said punishments. So who determines how many homes is too much? What's this number? While I agree 10 homes, if that's the magical number, is a lot for one person to own. It's not my place to impose my own views on this person. Actually, I would be a bit jealous as this person obviously has their financial act together to be able to pull it off. I have two homes and I'm single. Does this metric of "hoarding" apply to me? Especially since I choose not to rent out my second home. Am I going to be punished because I made proper financial decisions to be able to own two homes? I've said it before and I still hold on to this opinion. The massive run up in home prices are due the fault of the buyers going into panic mode. Everyone talks about low inventory for the number of buyers. Most if not all of these buyers were living in some place before this frenzy started. They were not homeless which would require them to buy a place. I don't see a massive surge of homeless people entering the market. If people would stop with the foolishness of bidding up homes and just walk away then, the run up wouldn't be as severe as it has been.

To me 3 is a legitimate limit... there I made us a limit. There is no punishment to not renting out your other homes... albeit that kind of defeats the purpose in a way, for many, right?

Originally Posted by RickFLM4

It’s not only those with 10 homes who would theoretically get hit with property value declines. Everyone would, including those with one home.

There are not nearly enough apartments to house people nor could they be built fast enough. Apartment rents would skyrocket if home rents went up due to surcharge / taxes. Realistically, I think your plan would just result in many more LLCs set up to own 1-2 homes to avoid the tax surcharge and / or higher taxes getting pushed to tenants.

Correct, everyone would get hit... which would be a good thing right now, we are in a massive bubble right now. As far as my plan... your LLC comment is one that was indirectly in the back of my mind which means no home can be registered without using a "real traceable name"... they made this change in Miami recently with the Condos as well.

[Gregrobin]

I just got outbid on yet another waterfront property. I came in at asking with an escalation clause, home inspection for me only. Other buyer came in way above asking, cash, no home inspection.

[RickFLM4]

Originally Posted by ASAP

To me 3 is a legitimate limit... there I made us a limit. There is no punishment to not renting out your other homes... albeit that kind of defeats the purpose in a way, for many, right?



Correct, everyone would get hit... which would be a good thing right now, we are in a massive bubble right now. As far as my plan... your LLC comment is one that was indirectly in the back of my mind which means no home can be registered without using a "real traceable name"... they made this change in Miami recently with the Condos as well.

I don’t think it will work because government attempts to “fix” markets are typically (almost always) met with workarounds by those with means. I’d also personally be strongly against this since I have been in my primary residence for 19 years and invested a couple of years ago in a vacation property for our own use. Interest rates will eventually increase and level off values. I don’t see why I should be affected by government attempts to artificially force prices down while those they attempt to affect inevitably find workarounds.

[ASAP]

Originally Posted by RickFLM4

I don't think it will work because government attempts to "fix" markets are typically (almost always) met with workarounds by those with means. I'd also personally be strongly against this since I have been in my primary residence for 19 years and invested a couple of years ago in a vacation property for our own use. Interest rates will eventually increase and level off values. I don't see why I should be affected by government attempts to artificially force prices down while those they attempt to affect inevitably find workarounds.

If you own everything for your own use and don't plan to flip... why would you be concerned with my plan at all?

You woulnd't be upside down, you just may not have absurd amounts of equity that you did before. Remember, as you have more equity so does everyone else... from a house to house perspective this doesn't do much for you but it prevents many from entering the market... again, I am not the one complaining because I can go and buy a house tomorrow but I know the position many others are in.

[RickFLM4]

Originally Posted by ASAP

If you own everything for your own use and don't plan to flip... why would you be concerned with my plan at all?

You woulnd't be upside down, you just may not have absurd amounts of equity that you did before. Remember, as you have more equity so does everyone else... from a house to house perspective this doesn't do much for you but it prevents many from entering the market... again, I am not the one complaining because I can go and buy a house tomorrow but I know the position many others are in.

We both agreed if home prices are affected, they are affected for everyone. Why would I want that? Why would anyone other than a first time buyer want that?

[ASAP]

Originally Posted by RickFLM4

We both agreed if home prices are affected, they are affected for everyone. Why would I want that? Why would anyone other than a first time buyer want that?

What value does having an inflated housing market have?

If you're not cashing out nor re investing into something else by taking out loans on your own house (which you really shouldn't be doing and creating a further bubble in other assets)... what is it doing for you?

[RickFLM4]

Originally Posted by ASAP

What value does having an inflated housing market have?

If you're not cashing out nor re investing into something else by taking out loans on your own house (which you really shouldn't be doing and creating a further bubble in other assets)... what is it doing for you?

I will eventually cash out one or both and downsize.

[zx10guy]

Originally Posted by ASAP

What value does having an inflated housing market have?

If you're not cashing out nor re investing into something else by taking out loans on your own house (which you really shouldn't be doing and creating a further bubble in other assets)... what is it doing for you?

This part I can agree with you on. I could care less at the moment if my house sky rockets in value. I don't intend on selling any time soon. Per your other corollary, I don't view my houses as an investment first. I view them as places I live first. Yes, I did do my due diligence to make sure I wasn't buying into a property which would be an overall money pit or I couldn't turn around and sell for at least how much I paid for it if push comes to shove. But secondarily they are investments which make up one facet of my overall asset/investment mix.

But where I could care less about values but the increasing prices will affect me now is in property taxes. I rather not pay more taxes than I have to. I already pay enough which I came out on the losing end of the previous administration's tax plan which lowered the amount I could deduct for my second home among other things.

[Alfisti]

High housing prices and continued rises fuels the economy, Australia has been living off of it for 20 years now.

Here's how it fuels it, I will use myself as an example.

Bought in 2010 for $850K, bank recently valued at $2m. They then lent us $500K at a very low rate to do what we please with. We did a moderate reno and threw in a pool. The rest just sits there for an emergency.

That keeps the economy turning peeps.

[2000cs]

Originally Posted by ASAP

What value does having an inflated housing market have?

If you're not cashing out nor re investing into something else by taking out loans on your own house (which you really shouldn't be doing and creating a further bubble in other assets)... what is it doing for you?

How do you know it is inflated? What is your measure of that? And what business is it of yours if I want to take out loans on my house?

If the price is too high for you, don’t buy. Instead, sell.

One of the lessons us older folk learned in the 1970s is that real estate is a pretty good place to have investments during an inflationary period, and it is really good to own a house with a fixed rate mortgage (or no debt if that’s your thing) in such times -renting sucks when rents can rise as fast or faster than income. If inflation persists, prices that look high today can look really cheap in just a few years. Of course to play that investment thesis out, you’d want to own multiple properties, or apartment buildings, or use REITs. More than 3.

[BMW F22]

So I’m looking at a home that I like: big lot, 4 beds, 2 baths, 2 car garage with built in storage, big backyard, can park about 6-7 cars, in a good city. Super close to work. They had it listed at $1.45M and lowered it few weeks ago to $1.2M. It’s been sitting for over 100 days.

Concerns are that a lot of things need to be replaced or fixed: termites, furnace, some roof stuff, HVAC system and hoses, etc. Estimated about $60-70K (possibly more if more things are discovered). The ceiling is about 8 ft which is a bit low. You lose a bit of height in the hallways which is about 7 ft. It is next to an expressway. Went there yesterday to checkout the noise and it wasn’t too bad. Of course, we won’t know what the noise at night might be like unless we sleep there.

I’m hesitant because of the things needing fixing (can negotiate into price), the possible noise being right next to a major expressway, and the housing market. Thoughts?

[spazzyfry123]

Don't get something next to a major expressway. Folks say it can be "white noise", but nothing mild about a jake brake.

Wild to hear seven figures and you need to repair major items. Just what you listed sounds a hell of a lot more than $70k.

[BMW F22]

Originally Posted by spazzyfry123

Don't get something next to a major expressway. Folks say it can be "white noise", but nothing mild about a jake brake.

Wild to hear seven figures and you need to repair major items. Just what you listed sounds a hell of a lot more than $70k.

That’s my hesitation: the noise (next to a 4-way intersection) and that it will likely cost more than estimated to fix. The reality of things is that homes in that city go for $1.5M+ for a good sized one that is turn-key.

[Alfisti]

For that price I wouldn't let the fixes bother me, even at 100K, so what, it's 1.3M now. But a 7ft hallway and intersection noise..... maybe pass.

[Gregrobin]

Originally Posted by BMW F22

So I’m looking at a home that I like: big lot, 4 beds, 2 baths, 2 car garage with built in storage, big backyard, can park about 6-7 cars, in a good city. Super close to work. They had it listed at $1.45M and lowered it few weeks ago to $1.2M. It’s been sitting for over 100 days.

Concerns are that a lot of things need to be replaced or fixed: termites, furnace, some roof stuff, HVAC system and hoses, etc. Estimated about $60-70K (possibly more if more things are discovered). The ceiling is about 8 ft which is a bit low. You lose a bit of height in the hallways which is about 7 ft. It is next to an expressway. Went there yesterday to checkout the noise and it wasn’t too bad. Of course, we won’t know what the noise at night might be like unless we sleep there.

I’m hesitant because of the things needing fixing (can negotiate into price), the possible noise being right next to a major expressway, and the housing market. Thoughts?

Depends on how handy you are and if you want to tackle some of these projects yourself. You list other red flags that would concern me though.