by Datta Khalsa, Broker
In addition to my ongoing efforts to educate people on the multiple dangers of rent control in its unintended impacts on tenants, I have resolved to also explore ways that I can help facilitate solutions which both sides of the rent control argument can agree will help renters, regardless of whether or not Measure M passes.
In a recent segment that I hosted for the local real estate show, YouTube: BTS Presents Santa Cruz County and Silicon Valley Real Estate Behind the Scenes, a colleague and I made a friendly bet to see who can be the first to help a group of tenants pool their resources and take control of their destiny as homeowners instead of remaining renters in perpetuity.
Hereās how we envision it could work:
Based on the median housing price of $900,000, three housemates coming up with a 20% down payment (at $60,000 each) would end up with total monthly payments (including the mortgage, property taxes and insurance) of about $4,900 per month (thatās $1,634 each), of which about $3,700 would be tax deductible, while another $1,000 or so per month would go towards paydown of the principal, instead of going out the window to the landlord as rent.
To qualify for those payments, each housemate would need to earn upwards of $47,000 per year by my estimate, putting them in the 22% tax bracket. This would need to be confirmed by a CPA, but for sake of discussion, this would likely result in tax savings that would bring their net effective cost down to around $1,000 per month for each housemate after factoring in deductions and principal paydown.
Granted, they would need to be responsible for repairs and maintenance above and beyond their monthly costs, but they would also get the additional homeowner benefits of depreciation and even more significantly profit from market appreciation whenever property values go up, so they can be included in our regionās economic expansion instead of getting left behind.
Another solution I am working on to make a difference in our housing crisis was brought to me by one of the investors in the real estate fund that I help manage. The fund currently holds assets in 6 different states, but the investor expressed an ideological wish if we could find opportunities here in our hometown that could provide our investors with a good return while also helping provide low-cost housing solutions for the working poor in our community.
We looked into it and discovered that in fact this kind of investment has become much more viable through the recent creation of several Federal Economic Opportunity Zones in our area along with changing rules for housing density bonuses being offered by the City. We are now in active discussions with several local developers to partner in several low-income housing projects that will bring much-needed rent relief and we are actively seeking additional members of the community who would like to participate in the funding of these ventures.
Based on our preliminary projections we see potential returns comparable to what we have been able to attain in other parts of the country right here in our own community, and our vision is to achieve the best of both worlds where local investors can get viable returns while bringing their investment dollar home, where it counts the most.
I invite you to reach out to me directly if you would like to be a part of it.
Opmerkingen