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Discuss Latest WCI Blog Post: Raising Rent: Is Dave Ramsey Wrong?

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  • #31
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    Eyemd356
    Member
    Last edited by Eyemd356; 01-14-2022, 09:25 PM.

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    • #32
      the problem is that if you don’t keep rents near market, that tenant will never leave. Now you have an investment that lags inflation. The work of maintaining the property doesn’t decrease, just the amount you are paid for time landlording goes down and you have less to maintain the property with.

      If tenants receive raises ahead of inflation do you advocate for them to give a certain share to their landlord? It baffles me why people think housing should be immune to the balance of supply and demand.

      Originally posted by Turf Doc View Post

      It's totally reasonable to raise costs if your costs increase. I think that raising the rent on good tenants just because you can, and raising it enough that your tenants need to move, is not as reasonable if you want to be a "good christian". I think it's tough to be a "good christian" if you're concerned about maximizing your money imo, and if you're in the business of providing shelter it's even trickier. I wouldn't feel bad about raising the price of some luxury good no one needs just because.

      I'm also biased against dave ramsey because i think his investing and student loan advice is unacceptably bad considering his background and the authority he has.

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      • #33
        Originally posted by VentAlarm View Post

        That says it is morally wrong to charge exorbitant interest. I think we can all agree that loan sharks and payday lenders are unethical.

        That doesn’t negate the clear story of making interest in the Bible.
        I think you should dig a little deeper and look a little more critically. All three of the major monotheistic religions basically forbade interest payments on loans of money at some point in their history. Judaism differed from Christianity and Islam in that its prohibition was only meant to be between individuals of the Jewish faith. This is one of the reasons that Jews were persecuted. From the mid-12th century, charging interest was forbidden to all of the Christian faith (as it had been to Christian clerics since the 4th century). 'The Merchant of Venice' is a literary example of the members of the Jewish faith being sources of capital to Christians at a time when charging interest was still officially forbidden for members of the Christian faith.

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        • #34
          Originally posted by uptoolate View Post

          I think you should dig a little deeper and look a little more critically. All three of the major monotheistic religions basically forbade interest payments on loans of money at some point in their history. Judaism differed from Christianity and Islam in that its prohibition was only meant to be between individuals of the Jewish faith. This is one of the reasons that Jews were persecuted. From the mid-12th century, charging interest was forbidden to all of the Christian faith (as it had been to Christian clerics since the 4th century). 'The Merchant of Venice' is a literary example of the members of the Jewish faith being sources of capital to Christians at a time when charging interest was still officially forbidden for members of the Christian faith.
          If we start expecting religious people to live by the strict word of their faith, then this country is going to look very different, for better and worse, but also for the trivial. I won't wade in any deeper than this, but for a superficial point, Lululemon stock will go to zero for sure and our food selection will look very different. "You shall not sow your field with two kinds of seed, nor shall you wear a garment of cloth made of two kinds of material." Leviticus 19:19.

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          • #35
            Originally posted by VentAlarm View Post

            Respectfully, as a Christian, I think you’ve made an incorrect assessment on nearly all accounts. There is nothing against a free economy and capitalism in the Bible. No mental gymnastics necessary. But you do need to understand the stories told.

            I think you’re greatly misunderstanding the context of Jesus and the merchants. He flipped tables because of a couple reasons, none had to do with selling something or making profit. The people I’m question we’re selling animals to be sacrificed for the atonement of sin at the steps of a holy place. They were ripping off poor people for the forgiveness of sins. It wasn’t strictly that a business transaction occurred, it was how and where it was occurring that was the problem. Jesus was a carpenter - by definition, he participated in building a product and selling it. Pretty hard to make an argument that he is against selling a good or service for a price.

            I’ve never heard of Christians being unable to charge interest. I think you have this confused with Islam. Quite the opposite is true. There is a parable of different servants getting different sums of money from their master while he is away. Two put the money to work and multiplied it. One buried it. The two that had more when the master came back we’re favored and the one who buried it was not, because he had used his money unwisely.

            There’s a lot in the Bible about being a good steward. We believe all we have is a gift from God and we are only stewards. Similar to what Ramsey was talking about, if you are charging under market rent, you are not being a good steward.

            And finally, someone doing something awful in the name of Christ means they are applying the faith wrong, but that the faith is wrong. The transplant surgeon who burned his initials into a patients liver means that he sucks, not that liver transplantation is wrong.
            what you just did is deliver us your interpretation of a very old book. others have different interpretations which are equally valid as yours because they are also opinions, and there is absolutely no reason to value one of those opinions over another.

            i personally think the new testament is essentially a road map for living in spiritual communes with no worldly possessions, shared ownership of goods, and very little attention paid to anything other than relentless evangelism.

            in what sense am i wrong? because i am interpreting a confusing and contradictory message differently and someone needs to explain their interpretation to me?

            q.e.d.

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            • #36
              I'm wondering where all the government overreach folk are. This isn't unique to any religion as it's not a religious issue.

              This whole interest charging rule is a construct developed by humans to control humans. The administration/powers that be created this to control their subjects and conveniently use their prevailing superior entity as the source of truth.

              The Catholic Church is notorious for this. Clergy to disavow all lands and title and give to the Church. Purchases of indulgences are right up there to fund its government

              This is human on human issue led by humans to humans.

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              • #37
                If you decide to do direct ownership of rental properties, the quality of your tenants is important in so many ways. Good tenants who take care of the property and who pay rent in a timely fashion make your life easy. Bad tenants make landlording torture.
                We purchased rental real estate with the perspective of “what type of tenants will this property attract?“ And so we bought rental properties in quality school districts that would attract young families. While these are upscale communities, we tried to purchase properties that would cash flow and be in the upper middle market for the community.

                Landlord/tenant relationships are a two-way street. When we get a new tenant, we directly welcome them to the property. We tell them that we hold ourselves to high standards, responding to any issues efficiently and timely is a top priority. We also tell them that we hold our tenants to high standards regarding good communication, and partnering with us to take quality care of the property. This has worked out exceptionally well. Our tenants will show the property and help us find quality new tenants when they move. They tell the new tenants what a phenomenal landlord they have. It becomes a win-win situation.

                Over time, we are transitioning most of our rental properties to professional management. But we have just enough self managed properties for my spouse to qualify as a real estate professional. The self management of this handful of properties in our portfolio has allowed us to qualify for REPS and to save millions of dollars in taxes.

                We recently had a tenant break their lease after being with us for several years. They purchased a house. We told them we would fully refund their security deposit, despite breaking their lease, if they would partner with us to find a replacement with no gap and no vacancy. They showed the house, found new tenants for us, and we gave them all of their security deposit back. Again, I win-win situation. The new tenant is working for google making 700k per year, so they can easily afford the rent at $5,950 per month.

                As the bonus depreciation deductions will sundown beginning in 2023, we will transition all of our portfolio to professional management in preparation for our retirement years. The real estate portfolio provides quality housing to so many families. We have affordable apartments renting for 1200/month to nurses and residents. We have SF homes renting for about 2000 per month in solid, middle class communities, and we have properties in upscale communities renting for 6k-7k per month. Our goal is to run this as a profitable business, and at the same time provide high-quality, well-maintained housing for quality tenants. This portfolio of properties provides a generous physician level income in a relatively passive fashion. We likely won’t need to touch our taxable or retirement accounts, given the real estate cash flow.

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                • #38
                  If you want to be successful in investment RE that you hold directly unless you are flipping properties it’s a long game. You make your money over time by appreciation of the property, pay down of the mortgage, and gradual increase of the rents. You are much better off not being friends with your tenants and treating it as a business. One of the big disadvantages of renting over the long term is that your rent will increase while a mortgage will stay relatively flat. This is also an advantage to the investor. If you are not prepared to raise rents and draw a hard line over late payments you should not invest in that space. I don’t see where religion fits into this. Even in direct RE there are different market strategies. The owners of the apartments in Brooklyn with the tragic fire had a business model of poor maintenance and low income tenants and no doubt juiced their returns by limiting their maintenance expense. My model is nice and safe properties at market or even above market rents. I’ve found tenants will pay a premium for granite counters and stainless appliances. I don’t care to interact with my tenants and use a property manager. If you own VNQ there may be a building like the one in Brooklyn in your portfolio. Just saying.

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                  • #39
                    Originally posted by White.Beard.Doc View Post
                    If you decide to do direct ownership of rental properties, the quality of your tenants is important in so many ways. Good tenants who take care of the property and who pay rent in a timely fashion make your life easy. Bad tenants make landlording torture.

                    We recently had a tenant break their lease after being with us for several years. They purchased a house. We told them we would fully refund their security deposit, despite breaking their lease, if they would partner with us to find a replacement with no gap and no vacancy. They showed the house, found new tenants for us, and we gave them all of their security deposit back. Again, I win-win situation.
                    Perfect example of being a good landlord and profitable and fair market pricing.

                    Can probably find bad landlords in the same neighborhoods of WBD.

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                    • #40
                      Originally posted by Molar Mechanic View Post

                      If we start expecting religious people to live by the strict word of their faith, then this country is going to look very different, for better and worse, but also for the trivial. I won't wade in any deeper than this, but for a superficial point, Lululemon stock will go to zero for sure and our food selection will look very different. "You shall not sow your field with two kinds of seed, nor shall you wear a garment of cloth made of two kinds of material." Leviticus 19:19.
                      Completely agree. I was just pointing out that there have, in the past, been quite strict rules against loaning money at interest in response to earlier posts. I am not a church goer but certainly consider myself a 'Christian'. The world would be a much better place if people would live by 'The Golden Rule', versions of which exist in all major religions, or perhaps even better the so called, new and improved, 'Platinum Rule' - 'Do unto others as they would want done to them'. And add in some humane version of the Three Laws of Robotics for good measure. One can dream.

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