Interest Rates Dear Mr. Berko: In February of 2009, I wrote you for advice on how to invest $60,000 for safety and appreciation, and you told me to invest $6,000 each in AFLAC, United Health, Toyota, Federal Express, Panera Bread, Chevron, Boeing, Chubb, Eli Lilly …Read more. Scared of Market Fluctuations Dear Mr. Berko: I'm 54, a self-employed engineer, married and have over $897,000 in my retirement plan that was worth $1,050,000 at the end of 2015. I'm scared of this market and my wife thinks I should sell and buy U.S. Treasury bonds. Our broker …Read more. Shake Shack Dear Mr. Berko: I was considering opening a Shake Shack unit. So I visited several Shake Shack locations in Philadelphia and NYC and those were good experiences. But at age 66, I decided that operating a unit would be too much for me. So last May, …Read more. Dollar Tree & Consumer Spending Dear Mr. Berko: Last year I thought you were arrogant, cruel and insulting when you said that people on food stamps should only shop at Dollar Tree stores. My 37-year-old daughter and her husband have four children, use Dollar Tree, and save about $…Read more.more articles
Moving to Sunny Skies
Dear Mr. Berko: Our 35-year-old son and his wife buy homes in St. Petersburg, Florida, for $40,000 to $100,000. They fix them up and spend about $10,000 and $15,000 in materials. They have one helper, and my son made $123,000 last year fixing and selling five homes. They have two children and want us to move to St. Petersburg so Grandma can watch the grandchildren while I help my son. I'm 62, a master plumber and electrician and can repair anything if I have the tools. We figure that adding my investment money we could get bigger homes ($200,000 plus) to make more than twice as much. I understand you live in that area. What do you think of the housing market? Is it strong enough for my wife and me to move to Florida where the weather is better than here in Detroit? DL: Detroit, Mich.
Dear DL: Nope!
Lots of "semi-retireds" would to move to Florida in a heartbeat if they could find part-time employment to supplement their pensions. And you'd be happy as a stoat in slop flipping a couple of homes every year to cover your rent and associated costs. Several years ago, flipping homes was a cakewalk, but today it's like running a race on a peanut butter-covered track wearing lead boots. Now real estate agents believe home prices in St. Pete may be hitting that proverbial wall. They worry about a housing bubble, especially downtown where there's a beehive of buzzing, frenetic condo activity. The "want" is there; however, growing doubts about consumer affordability worry builders, bankers, new buyers and the ubiquitous condo flippers — the speculators who pimp for builders. Flippers buy condos at pre-construction prices a year or two before completion, sell at higher prices to other flippers, who unload the units at even higher prices to other flippers and eventual to an owner/occupier. Flipping, a game of musical chairs, increases price by 50 to 60 percent, and the last man standing loses. Seems easy as pie! But the big scare is that a stalling economy that could turn a potential bubble into a bad blister.
A new, two-bedroom, 1,100-square-foot downtown condo costs $500,000 plus. An older 450-square-foot downtown rental unit leases for $1,300 a month plus 7 percent state sales tax, cable, phone, utilities, maintenance, parking and insurance.
Florida pros are nervous about the sustainability of the real estate market. They're concerned about higher rates, a slowing economy and that borrowers are having difficulty qualifying for mortgages. And there's a concern that those who haven't bought homes yet can't be future buyers because their stagnant incomes, low credit scores and record-high debt exclude them from mortgage consideration. Most stuff is gone; you'll have difficulty finding affordable fixer-uppers today and more difficulty finding buyers who qualify for a mortgage.
St. Petersburg's public schools are called "failure factories." And a prodigious population density of 4,000 residents per square mile (four times that of Miami-Dade county or Broward county) exacerbates the classroom problem. The tourist blitzkrieg between November and March changes St. Petersburg from a caring community of families with similar expectations to a crowded, rancorous, retail metroplex of noxious outlanders. Toxic traffic jams and dysfunctional drivers morph into nasty tantrums while a superfluity of uncoordinated and overlong traffic lights create angry intersection bottlenecks. Tourist season is synonymous with crowded stores, exasperating lines at theatres, banks and post offices, inadequate parking and jam-packed doctor's offices. Tourist season means hotels and restaurants temporarily increase prices. Tourist season means grating waits at your neighborhood restaurants, car washes, Walgreens' prescription counter and barbershops. Many longtime Floridians resent the intrusion of snowbirds because their steadily increasing numbers are becoming a bleeding, royal pain in the gluteus maximus. Over 100 million tourists visited Florida last year. Include Florida's 20 million residents, and, during the winter season, Florida is home to 40 percent of the U.S. population. It's a tight fit.
Please address your financial questions to Malcolm Berko, P.O. Box 8303, Largo, FL 33775, or email him at email@example.com. To find out more about Malcolm Berko and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate website at www.creators.com.
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