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[{"id": "hakrcom", "text": "I\u2019m hoping that some industrial buyers start looking back at residential. But that\u2019s a fools hope.", "replies": [], "depth": 1}, {"id": "hal679x", "text": "There should be a ton of remodeling being done thanks to the dickheads who, upon being thrown out of their units, take it out on their landlords and steal all the faucets and shower heads.\n\nThat and....rents are going to go up ***substantially***.\n\nAll those smaller landlords are going to wake the fuck up and say \"*No More Mr Nice Guy*\"....everything will be done by the book, and rents in these smaller complexes are going right up to 99.999999% of market rate.\n\nAnd all the middle and larger rental firms are going to say \"*shit oh dear...there's no easy money rentals anymore....time to go for some long overdue 10%, compounded annually, increases*\".\n\nYou can mark *this* post for review in 36 months: Rents will be up across the board by 40+% in less than 3 years.", "replies": [{"id": "halcu3e", "text": "In many markets they already are up big:\n\n[https://www.washingtonpost.com/business/2021/07/09/rent-prices-rising/](https://www.washingtonpost.com/business/2021/07/09/rent-prices-rising/)\n\n[https://www.nytimes.com/2021/07/22/business/economy/rising-rents-inflation.html](https://www.nytimes.com/2021/07/22/business/economy/rising-rents-inflation.html)", "replies": [], "depth": 2}, {"id": "hb9gvqw", "text": "Brutal analysis.  The one hole, I think, is that it's possible demand has been boosted by stimulus and the eviction moratoriums.  Vacancy is crazy low, which enables the rent jumps we've seen this year.  But I saw something just today that said Goldman is expecting 750K evictions (hidden in the article is the fact that something like 50% of evictions actually go through).\n\nBut if we use 375K units as a baseline for number of units that will vacate, and then consider the gradual withdrawal of UI and stimulus, I gotta figure demand takes a hard, hard hit, and vacancy rebounds as new supply comes online (Producer price index for lumber crashed for July data; most other inputs are still elevated, but I think supply will continue coming to market at a reasonable pace).  Now I'm not Mr. Doomsday the other way, I'm not calling for major rent losses, just a return to relatively normal rent growth.  \n\nThere's a million ways I could be wrong, and there's a million ways I could be wrong, but still get a relatively correct answer.  But basically my thoughts boil down to this; demand growth will not stay this high.", "replies": [{"id": "hbaxhbq", "text": "Keep in mind; During the great recession, rents fell by about 8 - 12% across the country, while RE values fell by upwards of half.\n\nThen add in all the big players entering the rental market (which I'm told, even today, they're offering premiums to do so...which doesn't make sense to me), all of whom expect a solid 10 - 20% cash on cash return, and no less than a 5 - 8% return overall.\n\nBig investors have been wrong before but, I think one thing that has always been true is...when politicians tell you (a thing) isn't happening....that means they've already done (that thing).\n\n\"*Inflation is temporary / transitory*\".\n\nEvery investor worth his salt has been asking....\"*where's inflation*\" ever since Reagan started filling the punch bowl, raising the debt from 900 billion to nearly 4 trillion in just 8 years.\n\nThe inflation forecasts today are completely wrong, and the big investors understand this).  Whether we're heading for a quick blast of 10 - 18% inflation in a few years, or a far longer period of 4 - 8% inflation, I think it's fairly clear, the governments of the world realize how bad this mess is, and they are going to inflate their way out (largely because it's the easiest way out, and the easiest way to tax you and I), and the big players, understanding the message being sent, are saying as clearly (with their checkbook):  \"*Buy hard assets fast*\".\n\nIt's the only historically viable way to protect their existing assets (cash). Over a 20 year period...it's never failed.\n\nEven if RE values fall for a while, we've already seen (since 2008) precisely how the govt. will accommodate this: Lower rates....fill the punch bowl.\n\nRates already low? Negative rates.  Can't be done legally?  We all know better than that.\n\nRents will rise if only for the purest aspects of inflation, which will (inflation) raise wages by default, which will in turn prove the efficacy of the trade: Buy hard assets (now).", "replies": [{"id": "hbh26wn", "text": "Yeah, I agree with you that negative rates are probably on the table eventually.  No idea about legality. And I generally support hard asset purchase (obviously don't buy an obsolete manufacturing building; just saying not *every* hard asset is a winner).  But I wouldn't be in this forum if I didn't think there was a lot of value in RE and things like infrastructure.\n\nBut I'm not as sold on inflation, I do think there's a lot of supply chain issues holding things up.  Take a look at the producer price index for softwood lumber.  I am basically saying you're going to see the same pattern in a bunch of inputs over the next 5 months.  \n\nI think demand was propped up by stimulus and without it the supply/demand imbalance is going to normalize.  That should hold inflation in check.", "replies": [{"id": "hbhlngk", "text": "&gt;I think demand was propped up by stimulus\n\nNo argument there.", "replies": [], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "halmv7z", "text": "That really depends on the location and product type, in California, that is not going to mean much for you.", "replies": [{"id": "hambe5v", "text": "In California there is still a state eviction moratorium so nothing has changed", "replies": [{"id": "hamcivs", "text": "There is state but it is ending soon. I just made an assumption since he said moratorium ending\\*", "replies": [], "depth": 3}], "depth": 2}, {"id": "hb0jmgn", "text": "Bay Area industrial, demand is coming back. There\u2019s actually opportunities to terminate tenants behind on rent and near eviction if you can find a direct deal to replace them at market rent. You get an un-budgeted bump in NOI, a stronger tenant, and avoid the costly and ridiculously long process of eviction.", "replies": [], "depth": 2}], "depth": 1}, {"id": "hauxmzk", "text": "when's it ending?", "replies": [], "depth": 1}, {"id": "hb3lff5", "text": "Section 8\n\nThese people getting evicted will have to live somewhere.", "replies": [], "depth": 1}]