prancingbull.com

Think moving is cheap and easy?

Think again.

I am moving this next week on the cheap, and it is still expensive.

Factor in a few expenses and it really starts to add up. For example, my security deposit was $400. Next, add in my first month’s rent of $735, plus a partial month as well. Also take into consideration that I have to pay August’s rent for the place that I am currently in. There goes another $400. You can also add in your standard application fee. This one went for $40. So just to get in, it is costing me $1075 plus $400 in rent that I currently pay.

Other factors include gas spent driving around looking for places. I factor that at about $50. Time spent looking valued at 8 hours x $13/hour = $104.  Luckily this is an in-city move, otherwise I would have had to get a rental truck, and those aren’t cheap. I also lucked out because I have a relatively low initial deposit, and I also don’t have to pay last month’s rent either. Thank goodness for that. Otherwise you could easily tack on an additional $1000. Just what I need.

Other things that I haven’t even got to include setup fees for utilities. These all seem to be random amounts that don’t really make a ton of sense, but there isn’t a whole lot that you can do about them either.

Real Estate moving, rent

I recently finished reading another book from the Seattle Public Library titled “What No One Ever Tells You About Investing in Real Estate” by Robert J Hill. As someone who would very much like to invest in real estate some day, I felt that this would be an interesting read. For the most part is was an interesting read. I would call it entertaining and informative.

This book, written by Robert J Hill, Esq, tells about many different real life situations that have happened to real life real estate investors. Some are horror stories that would make you never want to consider purchasing a home. Others give you a real life example of why you might want to purchase title insurance or any other product along those lines. Robert also threw enough real estate successes in there to convince you that maybe real estate investing could be the thing for you.

In this book , the author uses “real-life advice from 101 successful investors” to tell 112 different stories of things that they have had go right or wrong. Many of these stories came as submissions from his website realestatestories.com. Essentially, the author summarized the stories that the investors had given him, and then added his own personal comments and commentary. This made this book a very easy read. Because of the way the book is laid out with all the different stories, it makes it so that one can easily just pick it up and start reading right away without any need to refresh their memory.

Overall I really enjoyed this book. It was something that I could easily just pick up at any time and start reading. The author also put many major examples that clearly show that real estate investing can have some major pitfalls and is not all fun and games. I would highly recommend this book to someone who is thinking about getting into real estate investing, but doesn’t have the time to read a giant instruction manual. I feel my time was well spent reading this book.

Real Estate, Reviews book, invest, landlord, real estate, review, tenant

I just finished up reading a very insightful book called “The Option of Urbanism: Investing in a New American Dream,” by Christopher B. Leinberger. The main focus of this book was that America will start to fall behind the rest of the world economically if we do not switch to a denser, walkable and transit based society.

In the book Leinberger starts out by saying that before the invention of the car cities were very compact and dense. One could only travel as far as they could walk, so this made it necessary for all things to be close by. Stores, work and home all needed to be located close to one another for the sake of convenience. Even when cars started being produced they weren’t something that was owned by every family.

It wasn’t until the World’s Fair of 1939 and 1940 in New York that the idea of owning a car became something that all Americans wanted. At the fair, General Motors set up a major exhibit called “Futurama.” This exhibit “showed radio-controlled, automated fourteen-lane highways crisscrossig the country with three speed limits (depending on the lane) of fifty, seventy-five, and one hundred miles per hour.” Over the course of the fair it was estimated that 27 million people saw this exhibit, and most were very impressed by it. The exhibit promised that this vision would become a reality by 1960.

According to the book, there were two major contributors to the massive expansion of the suburbs. The first was the end of World War II. Many soldiers came home and immediately started to have children. They started to look for a new kind of lifestyle, and the suburbs seemed to offer just that. The other major contributor was the passage of the Federal-Aid Highway Act of 1956. This act built the new 46,837 mile freeway system that currently covers the entire country. It was finally completed in 1991. This also helped make commuting from the suburbs to the city that much easier.

In this new society, only the rich could afford the suburbs, and the cities were filled with the poor. Many of the traditional downtown department stores left for the suburbs because business had become so bad in the city. As people moved to the suburbs and found out that they had much more space and privacy, they naturally told their friends about this paradise. After hearing such wonderful things, the friends moved out too.

Leinberger argues that while initially suburbs seemed to offer what was being promoted as the “American Dream,” it actually led to a lower quality of life. With sprawl, people are forced to drive until they qualify for a place to live. For the poor working class this can mean driving hours each way just to get to work. More time in the car means less time with family, and this would lead to a poorer quality of life.

Leinberger has suggested a rational solution to this problem. He essentially echoes what many have been saying for the past few years. We need to be more like the Europeans. He suggests having a central city that is linked to the outside suburbs via some sort of rail/transit line. In the suburbs, the transit center would be what the rest of the town was built around, thus making it convenient for all people to access it. He also suggests that instead of spending billions daily to fund a war that supports our sprawling and congested lifestyle, we should instead be using that money to create better mass transit systems. Until people have better transit options, they will continue to use their cars because that is the only way.

In conclusion, I think that it will take a number of things for the United States to switch into a more transit based society. Once gas prices reach certain heights, people will start to consider transit to be a more viable option and not something that is strictly used by the poor. With increased ridership numbers, the cities should recognize this pent up demand and will infuse more money into the public transit system. All in all I really enjoyed this book. I think that Leinberger made some excellent points on how to fix some of our transit problems. Unlike other books, Leinberger’s solutions actually seem feasible and quite likely to be implemented in the near future. I would highly suggest reading this book if you are at all interested in urban development or environmentalism.

Random, Real Estate, Reviews bus, Leinberger, light rail, public transit, suburbs, the option of urbanism

Apparently my blog program only lets me type so much before it starts to freak out, so here is the rest of my post…

… I guess the main issue I had with the book was the writing style. The book didn’t seem to fully captivate my interest like a book on this topic should have. I suppose some of it could be attributed to the fact that I read it 15 pages at a time on the bus on the way home from work.

In short, the Virsnieks plan is to essentially buy low, sell high, and use the rent from your tenants to pay the mortgate. To seasoned real estate investors this probably seem like a no brainer. If you fall into this category I would not suggest this book to read. If this seems like a groundbreaking idea, then this book would probably be a great read for you. Personally, I had a teacher in high school of all places enlighten me on this idea first, so the majority of the ideas covered in the book weren’t really much of a surprise to me. I felt that I got some good words of wisdom from the book, but not enough to justify the amount of time invested in it. I wish I would have just read a few choice chapters and been done with it.

Personal Finance, Real Estate, Reviews condo, condominiums, landlord, real estate, rental unit

As I mentioned a few posts back I read a book called “How to invest in Condominiums” by Andris Virsnieks. I did not finish this book entirely, but this is mainly because the book did not fully captivate my attention. Mind you that I read this book because I have been very interested in investing in real estate in one form or another for quite some time.

According to the title of the book, it covers such topics like:

• Select the right condo
• Make the real estate market work for you
• Attain positive cash flow
• Reduce your tax basis through depreciation
• Live rent-free and retire early

Judging by the cover it seemed like an interesting read. After getting a ways into the book it seemed to cover the same stuff over and over again. I guess that since I had been thinking about investing in real estate for so long I had already thought about many of the strategies that Virsnieks covers in the book.

The basic investment plan suggested by Virsnieks essentially goes a bit like this. First you must select a brand new condo. A remodel or apartment conversion just will not do. He does not believe in buying an older unit to upgrade into a more valuable one. Not only must the condo be new, but it also must have high demand for the units. If there is not high demand for them, then it may be harder to sell them later. The other main point that the author reiterates throughout the book is the value of hiring a property management company to take care of all the dirty work for you. Virsnieks claims that the management company typically takes about 9% of the rent for their services, but it is well worth not dealing with all of the hassles. He says that by purchasing a new condo and hiring a property manager, then you will only have to spend about 40 minutes a month on your investment. That 40 minutes will be spend going over the property management statement and depositing the check in the bank.

Virsnieks makes the whole process sound quite easy in the book, and indeed it should be. There are a few problems that I have with how the book is set up though. The majority of his purchases were made back in the 1970s, so it is somewhat hard to wrap my head around the purchase of a $23,950 condo in Seattle that rents for $265/month. These days a cheap livable condo in Seattle goes for about $175,000 or more. He also makes mention of mortgage payments in the 13%+ range, which is unheard of these days. If you applied everything on a strict percentage basis, it would all probably match up about the same, although in Seattle I believe that condo prices have increased more than rents have.

Personal Finance, Real Estate, Reviews condo, invest, landlord, real estate, rent, tenant