Wednesday, April 02, 2008

High Gas Prices Might Help Property Values

A friend of mine has a duplex in Minneapolis. I escaped Minneapolis because my property taxes tripled and the rent I could charge in my then-duplex was driven down by all the affordable housing projects they put in. This put me into loss territory, thank you commie bastards of Minneapolis.

However, my friend was able to rent out his one bedroom apartment for almost $200 a month more than he charged the previous tenants.

The reason why?

Two fold;

One, he allows dogs.

Dogs are honorable, noble beasts created in Heaven to protect the good and fight evil. And therefore make better tenants than cats.

Two, high gas prices he surmises is making people think long and hard about how far they want to commute to work or school. And since his property is near the University of Minnesota and St. Thomas and downtown, he was surprised with just how many applicants he received (dogless or not).

Since cash flow is one of the three valuation techniques used by appraisers and cash flow is the true driving value of property, this might provide more upward support for property prices than we previously thought.

That being said, I think my call to mandate corporations to allow all employees that can to telecommute would do more to save gas.


Anonymous said...

He shouldn't have a dog bigger than small. Dogs create plenty of damage and judges usually factor that in as reasonable damage. The $200 extra a month may not be worth it.

Anonymous said...

They might help some property values. With gas being more expensive, living further out becomes less desirable.

Then there's the matter of whether higher prices are "help" or not. Personally, I'd like to see prices approaching zero, because I'm a tenant instead of a landlord.

Unknown said...

Good point...inner city properties should be positively affected, while those out in the 'burbs will suffer.

The outskirts here in houston are getting ridiculous. Many of the new communities are 40+ miles out, and the highways leading to them might as well be parking lots during 'rush hour' which should nowadays be referred to as 'rush half of the day.'