What investment will keep up with inflation that is not the stock market? Gold?

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All of my properties are in Utah, I live in Nevada. I have 4 different property managers that handle the units for me. They all charge 7% and, to me, it's well worth the cost not to deal directly with the tenants.
There's the 7% you mentioned (which is close to the market rate of management, between 5 to 10%), but there's other cost if you do not spend the effort in seeing how things are done, whether tenants are screened to certain standard (not just credit score or income, but also whether they look like responsible people), or whether maintenance and remodeling should be done to what standard (everything has a cost and benefit decision to think of). Management cannot make investment decision for you.
 
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I have a toll bridge I could let you in on for a nominal investment. ;) But seriously, too many people have already tried to divest from the stock market by buying investment properties (houses) that they do not live in. Of course it has created a housing "shortage" and now States and Counties are looking into doing variable property tax depending on weather or not it is the house you live in.
Respectfully, real estate investors are only part of the very complex causes of the housing shortage, if at all.
 
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There's the 7% you mentioned (which is close to the market rate of management, between 5 to 10%), but there's other cost if you do not spend the effort in seeing how things are done, whether tenants are screened to certain standard (not just credit score or income, but also whether they look like responsible people), or whether maintenance and remodeling should be done to what standard (everything has a cost and benefit decision to think of). Management cannot make investment decision for you.
This is why having good property managers is so important - and I do. I also personally inspect my properties at least annually and insist my managers do quarterly inspections. All repairs over $250 have to be approved by me unless it's an emergency. I budget for paint every 1-2 years and new carpet every 5 years. Owning rentals really isn't that complicated.
 
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Maybe I should clarify. I don't want to deal with maintenance stuff, collecting rents, vetting applicants, etc. Otherwise, yeh, I'm a people person. What the hell is wrong with you people!

What’s your profit margin so far on your rentals after all your total overhead ?
 
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When you have 10+ units, one nonpaying tenant doesn't really affect you that much. I guess I've been lucky and most of my tenants paid, one didn't but then when they finally left, only lost one month of rent which isn't that uncommon in terms of rentals these days. Most other landlords I know have had good paying tenants. It's all about screening tenants up front. Our state has also been good about paying back rent from the federal government, I think other states are way behind.

Depends on the margin you get and what the margin on the property that doesn't pay is.

Losing a month seems par for the course.

Totally agree on screening.

My LA place was newly remodeled and came onto the market as the first covid wave hit- but up front not after rent.
I lost two renters.
One couldn't get the moving company to honor their contract.
The other guy got covid and ended up in the hospital.

I ended up with a guy that reliably pays a week late every month, a rich single guy moved in - perfect crib for him.

 
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UD,

Very nice property. 👍

Thanks Dave. That property never looked nicer than the day I moved out.

Mrs. Uncle Dave did the reno work. Tiled the kitchen, counters, floors and showers.

I paid 347K for that place in 97. Been a good investment.

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I like the kitchen with the bright colors, really makes it stand out. I don’t like a kitchen with dark colors, it makes the room feel like a funeral home.

She needs to be on the TV show: This Old House


.
 
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Respectfully, real estate investors are only part of the very complex causes of the housing shortage, if at all.

Less than 1% of properties are liquid and available to single family owners
The ability to create new housing is equally limited

So Increasingly 2014+ homes behave like an inelastic product meaning any small influence in the market drives big price changes

AKA Remote workers, absentee foreign owners / investors drive large changes to a shrinking marketplace.

Hopefully price fatigue drives enough people out of the market and adds common sense back into buying
and considering per the metrics property “views” have dropped in half from peak we are on our way to a softening market which won’t help prices quick but will increase time on the market and remove/ reduce bidding wars, the big guys are already mentioning this
 
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The fatigue has been driving a lot of people out of the urban and into the suburb and semi rural, sometimes in a very different location due to work from home. Since there is a huge price difference across the US, the increase has been spreading all over and the lower income states and towns are being impacted a lot. In the long term I hope with these people moving further, on site jobs will move with them too so the local can benefit, but before then it would be a bit of a pain.
 
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I have a toll bridge I could let you in on for a nominal investment. ;) But seriously, too many people have already tried to divest from the stock market by buying investment properties (houses) that they do not live in. Of course it has created a housing "shortage" and now States and Counties are looking into doing variable property tax depending on weather or not it is the house you live in.
How are real estate investors creating a shortage? They make no money if they are not renting out the properties.

Are you suggesting some are buying properties and sitting on them, allowing no one to rent? I'd like to see some actual data on this and not just beer garden assumption.

Sure, some folks have vacation homes. They probably have them in places where people go to vacation. These are probably not homes that the general public could afford.

Using your example of a toll bridge, what good is it to own a toll bridge if you do not allow traffic to pass? No traffic, no revenue. Same with renting property, no tenants, no revenue.

If the property is off the market because of maintenance, or the place is being torn down to build a new property, eventually someone will occupy it.

But unless you have actual data that shows residential property is on the sidelines, not being rented, I'm dubious of your assertion here.
 
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Respectfully, real estate investors are only part of the very complex causes of the housing shortage, if at all.
Exactly, I'd suggest the following podcast for a look at SOME of the reasons we have about a 2 months supply of housing in the US as a whole:

 
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How are real estate investors creating a shortage? They make no money if they are not renting out the properties.

Yes large investors and institutional investors can very much create both false and real shortages


Because so few homes are for sale they can drive their own profits

In my area large/ institutional investors basically write their own zoning changes .

The town used imminent domain to raise an entire city block of occupied mid to higher end homes.
Shortly after A for profit landlocked “care” facility downtown purchased the entire city block of now “vacant” land from the city for a song as part of a development to make a gated community for people in recovery.

In a “water locked” area with 30 homes for sale a month in the whole county removing 25 houses from the market is a huge blow since they cannot be replaced.
 
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That would be a losing proposition. 2% is even below the normal inflation rate. The idea is to achieve gains above the inflation rate.

Example, you are 25 and you put $500,000 in the bank today to save until retirement. That 500k will lose value over time. Just look at prices over the last ten or twenty years or beyond.
How I remember getting 12 percent on savings back in 1980.....it was great but i had no money....now i have money and cant get but 1.5 percent if that.
 
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Yes large investors and institutional investors can very much create both false and real shortages


Because so few homes are for sale they can drive their own profits

In my area large/ institutional investors basically write their own zoning changes .

The town used imminent domain to raise an entire city block of occupied mid to higher end homes.
Shortly after A for profit landlocked “care” facility downtown purchased the entire city block of now “vacant” land from the city for a song as part of a development to make a gated community for people in recovery.

In a “water locked” area with 30 homes for sale a month in the whole county removing 25 houses from the market is a huge blow since they cannot be replaced.
Looking at the current numbers for Phoenix, 429 homes is less than 10% of the current supply, so it contributes some, no doubt.


Yet it's taking 83 days to sell a home there as well, so it's not like they are going on contract as soon as they hit the market.


The article you post doesn't seem to indicate WHERE the homes are going. They are just looking at the number of homes the investors are buying vs selling. If the investors are turning them into RENTAL properties, they are available for housing, just not for sale.

If they are buying them and just hanging on to them, sure. If they are buying them and turning them into rentals, not really a shortage, other than to realtors who get paid by selling homes.
 
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How are real estate investors creating a shortage? They make no money if they are not renting out the properties.

Are you suggesting some are buying properties and sitting on them, allowing no one to rent? I'd like to see some actual data on this and not just beer garden assumption.

Sure, some folks have vacation homes. They probably have them in places where people go to vacation. These are probably not homes that the general public could afford.

Using your example of a toll bridge, what good is it to own a toll bridge if you do not allow traffic to pass? No traffic, no revenue. Same with renting property, no tenants, no revenue.

If the property is off the market because of maintenance, or the place is being torn down to build a new property, eventually someone will occupy it.

But unless you have actual data that shows residential property is on the sidelines, not being rented, I'm dubious of your assertion here.
Certain kind of real estate investor are creating shortage AND jacking up prices. Maybe where you live nobody does this sort of speculation, but many desireable places in the US they do. The more pricey and desireable the area the more likely to occur. Investors buy property in one of these very hot markets and detail everything out. They sit on it (no renters) for a year or two and then sell it. When you have a $1.4 million house you can sell in two years for $2 million, that is not a bad return on investment. Yes, such investment is rampant and widespread, even though you may not see it in your bubble. Real estate prices are up 50% in certain spots in the last two years. The problem of such investment is only getting worse.
 
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Certain kind of real estate investor are creating shortage AND jacking up prices. Maybe where you live nobody does this sort of speculation, but many desireable places in the US they do. The more pricey and desireable the area the more likely to occur. Investors buy property in one of these very hot markets and detail everything out. They sit on it (no renters) for a year or two and then sell it. When you have a $1.4 million house you can sell in two years for $2 million, that is not a bad return on investment. Yes, such investment is rampant and widespread, even though you may not see it in your bubble. Real estate prices are up 50% in certain spots in the last two years. The problem of such investment is only getting worse.
But are $2 million dollar homes what new buyers are going to buy?

Yes, I'm here in the midwest, so we got 2700 square feet for ~$200k 13 years ago.

Houses are selling as soon as they go on the market here. One of my Bible Study mates is an agent, so he has his finger on the market. Unless a home is a real dog, they sell right away.

But few are trying to flip $200-$300k homes. The million dollar homes are not where most families are buying here.

Nor was that the case in the Phoenix AX data I looked at.
 
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But are $2 million dollar homes what new buyers are going to buy?

Yes, I'm here in the midwest, so we got 2700 square feet for ~$200k 13 years ago.

Houses are selling as soon as they go on the market here. One of my Bible Study mates is an agent, so he has his finger on the market. Unless a home is a real dog, they sell right away.

But few are trying to flip $200-$300k homes. The million dollar homes are not where most families are buying here.

Nor was that the case in the Phoenix AX data I looked at
No offense intended, but people in the Midwest simply do not get it. This is going on mostly West of the Rockies and in parts of the Southwest. It is a big problem in the West, and the corrupt politicians are not seizing the opportunity to help out the taxpayers by taxing (property taxes) these investment 2nd and 5th houses at an increasingly higher rate. They are contributing to the problem, because they get more taxpayer dollars to play with as the cost of homes goes up and up and up. Even people who stay in the same house for 60 years are feeling the pinch, because their property taxes are increasing every year. The price rise is IMHO mostly due to the artificial shortage created by these speculators. Sorta like a massive scale pyramid scheme of houses.

 
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