Monthly Archives: April 2012

Occupy Everything: Breaking Down the Culture of Renting

Someone told me that people like top 10 lists as blog entries. I’ve been writing one for next Monday on things that people used to buy, but now rent instead. Writing the list has made me feel like something of a stodgy relic, thinking nostalgically about the old days… y’know, 5 years ago. Society has definitely shifted away from ownership and towards a culture where borrowing is more the norm.

The most telling shift is seen in Wikipedia’s historical definitions of the American Dream. Originally the concept referred to the low cost to buy farmland in the US. Now it is a “dream” of an equal chance for all to achieve success and prosperity. Success and prosperity are extremely subjective things, and even within that entry there’s some conflict over what indicates that one has succeeded and/or prospered. Is it a chance for equal education and a good job? If so, it’s got very little bearing on material items. However, in that same entry they state: “[h]ome ownership is sometimes used as a proxy for achieving the promised prosperity; ownership has been a status symbol separating the middle classes from the poor.” Personally, I would say that this is no longer true – rather, it now separates the upper class from the middle class, or it’s certainly heading that way. After all, the top 15 private landowners in the world are all either heirs, royalty or Ted Turner. (more…)

Landlording: What Are You In It For?

Property investors are all in it for the money. After all, why take such an enormous gamble with your finances if you didn’t stand to gain something substantial from it? The multifamily market in Chicago surged even as the residential and remaining portions of the commercial markets tumbled over the past several years. The Marcus & Millichap 2012 National Apartment Report (registration required to view) predicts continued rent growth through this year, although they do foresee sale prices easing off.

A landlord without a business plan is a disaster waiting to happen.

Even so, once you’re in the game a more subtle choice awaits in determining your motivation and business model going forward. I’ve observed landlords for several years and suggest that there are three main priorities you can have as a landlord, but only one will succeed in the long run for maximizing cash flow, occupancy rates AND resale value. (more…)

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