patrick.net

Face Reality said: Renting may work if you can find a good rental house that fits your needs and you can stay there as long as you wish. Unfortunately, that’s not how rentals typically work. It becomes hard to move your family every year or two, and to keep finding new places.

This is not my experience. Not at all. I have always selected my rentals (usually SFH's) carefully, and so far I have always been able to stay as long as I wanted--usually 4 years at a time. Typically I move to get a shorter commute and other conveniences and intangibles. Typically I do not see a rent increase over the 4ish years I live in a place--I am a good renter, pay on time, and rent for individuals rather than agencies. Typically when I move I do not see a big increase, either--I do not move when the rental market is hot.

Renting is not bad. In fact, I rather like being able to move when the job moves, or when we want a new town.

Face Reality Says:

> Renting may work if you can find a good rental
> house that fits your needs and you can stay
> there as long as you wish. Unfortunately, that’s
> not how rentals typically work. It becomes hard to
> move your family every year or two, and to keep
> finding new places.

Then Eliza Says:

> This is not my experience. Not at all. I have always
> selected my rentals (usually SFH’s) carefully, and
> so far I have always been able to stay as long as I
> wanted–usually 4 years at a time.

Anyone that “has to move every year or two” is either the unluckiest guy in the world or is not asking the right questions when they rent. You want to rent from someone that has been a landlord for a long time “and” who plans to continue being a landlord for a long time.

My parents have owned all their rental homes on the Peninsula for over 30 years and have never asked anyone to move and like most landlords keep the rent below market for good tenants in the hope that they won’t move.

FormerAptBroker Says:
Another study founds that the United States well is ahead of virtually all wealthy countries in actual “work”…
The more time people are on 8 week vacations, maternity leave, paid sick days or breast feeding the less time they are actually “working”…

Does that define quality of life then? Those things are all legitimate work entitlements. Anyway, you're in good company with Lesotho, Liberia, Swaziland and Papua New Guinea. ;)

Is there a link to the youtube 'Mortgage gangsters' clip that works? It is marked as private...

My parents have owned all their rental homes on the Peninsula for over 30 years and have never asked anyone to move and like most landlords keep the rent below market for good tenants in the hope that they won’t move.

I've only rented in complexes from corporations. Is it better to rent houses instead?

Also, 1st generation immigrants act very differently from 2nd gen. What’s ironic is, 2nd gen are usually disgusted by their parent’s thrifty behavior and go entirely insane once they become financially independent. 1st gens are mostly thrifty, there are exceptions of course, but very few spend like a typical American.

That's why we need to clamp down on immigration. These 1st gens are making things worse for everyone by insisting on working hard and saving. :(

I have a cheap knock off Christian Dior bag. It's a very handy size and shape for me. Plus, I don't think many people recognize the brand. It's almost as if I was carry a brand X bag. The meta implication of this bag amuses me whenever I carry it.

I always wondered why BMW has such nice key chains, I guess it's all an extension of what I will now call the "handbag theory of consumerism."

I always wondered why BMW has such nice key chains, I guess it’s all an extension of what I will now call the “handbag theory of consumerism.”

Competition too - the lexus and infiniti are pretty slick.

spike66,

That place needs to rent for approx. $7,000 just to cover their costs.

re: auto discussions

I bought my first car a couple years ago (used 2000 VW) just as we were discussing selling the house. I have no interest in a car other than it's ability to get me from A to B and carry stuff. Before the purchase it was all walking, bicycles, public transit, taxis and rental cars. Those modes of transit work perfectly fine in Chicago. I guess with the inflated value of the house I was feeling a little flush so we bought a car. It's nice to have but along with less exercise comes the weight gain, ouch.

Face Reality Says:
By the way, one of the reasons for my confidence that Cupertino prices will not tank is that they haven’t actually gone up that much over the last six years. The median SFH price went up from $871,400 in 2000 to $1,103,000 in 2006. This is an appreciation of only 4% per year. There seems to be a misconception that prices there went up a lot more than they actually did.

That's not an entirely accurate way of putting things in a perspective. The bubble started in BA around 1998. That's when I first heard of bidding wars. Then after dot com bust prices actually dropped. 2003 was a net -ve year for BA. For a while it seemed to me that prices will be back to fundamentals. But thanks to the credit bubble, the bubble resumed in earnest.

For a detailed discussion on this and contribution of immigrants to this bubble, check out
http://www.safehaven.com/article-6795.htm

Paul,

I commend you! I believe the temperature in Chicago this weekend is hovering around 0 F.

spike66,

I sometimes wonder if Ms Cochran isn't a Sulzberger cousin. Oh, and I especially loved 'lenient policies'.

I loved the couples - two cases of he's (relatively) rich and she's (relatively) hot. I'm eagerly awaiting the bitter recriminations when they divorce and have to divvy up the responsibilities for their soon to-be-underwater cunning property.

burrrrrrrrr

GO BEARS!

http://128.121.214.229/

Eburbed said: "like most landlords keep the rent below market for good tenants"

Sounds like my son's landlord. I guess it's more common than I realized. He always pays on time, takes IMMACULATE care of the place, and very rarely complains.....and then only if it's a major deal. If there's something along the lines of normal M & R, he'll do the work, document, and forward so the landlord has what he needs to know what was done and it was done correctly.

In return, should something require the landlord's attention, they have somebody take care of it before the sun goes down. My son is happy with his stable rent and the landlord is delighted with his tenant and wants him to stay for as long as possible.

It seems like SF has "professional" renters.....something rare or unheardof in other parts of the country. I had a rental years ago and could not dump it fast enough. People are no damn good and will steal the paint off the wall if they could.....that, after not paying the rent.

Every time I read about all the dipshit REI's talking about their spreadsheets, I laugh my butt off. They have NO idea what they are in for. I'd love to hear their tune after a year or two.

Do you think a rotting piece of chicken would work?

I recommend squid myself. Comes in convenient rings and easily suspended from the float shaft.

Yeah, there is definite value to being a good renter in the Bay Area. Pay rent on time, keep the lawn mowed and the garden pretty, let owners know about major issues but take care of them yourself and forward the bill...these things keep the rent low and the relationship sweet, truly they do, and they also make living in a rented home more pleasant.

The landlord role is probably least fun in a rent-controlled area with strong tenant law.

At the height of a housing bubble, which is what we are in right now, being a good renter can secure amazing deals from long-time landlords.

The reason is because all marginal prospective buyers have gotten loans and become "homeowners", the rental market is inundated with people who cannot qualify for a mortgage loan, i.e. undesirable renters, and very few bubblesitters like people on this site who CHOOSE not to buy. Therefore, there are lots of landlords chasing after few good renters.

Unless the long-time owner passes away, or for some reason needs a serious portfolio reshuffle, he has very little incentive to sell his place in California (ask FAB's parents!). His house is entirely paid off, his property tax is in the thousands, whatever he get from the rent is entirely positive cash flow. If he sells his house, he will have made too much to pay capital gains tax, he will have troubles finding another investment to park his money, and since he is a long-time owner, he is usually at an advanced age who prefer to do things the old way. He is willing to make substantial concessions to keep a good renter.

This is obviously not the case for the new landlords who are suffering from serious cash flow anemia.

Taxes

Done

The KID!

It's always been important for me to get this out of the way before tax hell starts. Fully funded SEP/IRA and had enough left over to start HSA (health savings account)! God that feels GOOD!

"bone-deep stupidity" LOL!

spike66, God love you sir!

Paul,

I have a CPA friend in Salem, OR that grew up in Greenburg, IN and went to Northwestern, there's NO WAY this guy can lose! Any truth to the Vegas line being Colts by 7?

Oh and GO BEARS!

OO,

That's a great point. Older long time landlords are very likely to hold their property until they die to give their estate the step up in basis.

spike66,

Well, I'm just trying to wrap my mind around paying $8,000 a month just for housing. When I flip through advertised co-ops, I've seen $500,000 places with $2,000+ monthly maintenance, so $7,000/month is probably way too low as carrying cost. Even $7,000/month is more than any of the women in the article pulls in gross.

spike66,

With "himbo's" like that working there....... no wonder you left. You haven't done your "research" until you've been a regular on this site!

Seriously, "researching" NY is one thing, and like you say, since we all know it's the center of the universe what happens elsewhere couldn't possibly be of any consequence right? I understand Roz and Lucianna's motivations but what wigs ME out is the guys seemed to be an equal or greater influence in the decision making process.

What's with the vanity already? What happened to traders that ate, slept and drank the market? I used to love the guys that were washing the puke off of the tie they wore the night before in the men's room after sleeping in their car! Now these guys want "cushy" right out of the gate.

Reading an article today in the "BOregonian" about "e-d" and how doctors are now perhaps considering asking patients about (God forbid) their sex lives!

Believe me I feel for medical professionals! People DO NOT like discussing such matters. My question is.... what's worse for you long term? Physical OR financial impotence?

astrid Says:

> I loved the couples (in the NY Times)
> two cases of he’s (relatively) rich and
> she’s (relatively) hot.

(relatively) rich and (relatively) hot couples in NY are almost as common as (not that) rich and (kinda) chunky couples.

In nicer neighborhoods you see a lot of (super) rich and (smoking) hot couples and in poor areas you generally see (no chance of ever getting) rich and (super) chunky couples…

spike66

I have no intuition how much these NY apartments / co-ops should go for, but they look rather inexpensive compared to the luxury apartments being sold in HK.

The lower-to-middle level ibankers in HK make the same amount of dough as their NYC counterparts but they pay a total of 15% tax only, I guess the savings in tax all go to the luxury trophy apartments.

well, it may not apply to these folks in the NYT, but many bankers made serious dough in the last 3 years, that is a fact. We went a class reunion last year and I was completely dazzled by the money flowing around and wondered if we happened to be among the few "losers" in the crowd.

It seems like many people in the hedge fund industry scored big time, and they were not afraid to flaunt their wealth in front of their classmates, writing $200Ks, $300Ks to alumni fund, and talking openly about their multi-million dollar bonus. I don't know enough about the banking industry, but it seems like most people in that industry are able to do very well in good years, actually they make far more than enough in the good years to carry them through the bad years. I know, the street has swifter and deeper cutbacks, but hey, if you can make several hundred grands to millions in a good year, that is not a bad deal at all.

OO,

I have a friend here in BA who works for an investment house. Even the IT engineers were awarded minimum 2x annual salaries in bonus. Being at the right place at the right time, is all that matters.

Don’t feel very good, AMT bites again, I am by no means rich, but fits the description, 2 kids, mortgage, high property tax. When are they going to repeal this?

AMT has its pluses too. If they don't change it for a some more years, then I guess every middle class family will be hit by it. It's as close to flat taxation as it can get. So when that happens I will like it. Secondly, if you are already in the highest tax bracket, isn't the marginal tax rate on the incremental earning less than normal ? So if you get a bonus / or a short term cap gain, aren't you better off in AMT ? I could be wrong,

Is property tax deductible under AMT ?

I think we are getting a credit for last year's AMT. It is wreaking havoc with my taxes this year though; even down to the income adjustment for my state income tax refund. You have to recalculate last year's taxes. It is a major headache.

zidane2 Says:
If we assumed the vacation policies of the wealthy nations (Germany, Austria, Holland, etc etc) our entire economic system would collapse in the US. In the US we have a massive 3rd world population (Africans, Central/South Americans etc) that the wealthy nations dont have to support. It is a real problem and hinders our standard of living. Imagine if the problem could be solved with repatriation.

You are the wealthy nation, with the exception of Switzerland, which is an unusual case due to nature of business, small size, etc. Have a look at the CIA handbook of countries for per capita GDP. These countries aren't doing so well. Further, France, Germany, Spain, England all have massive illegal immigration or recent legal immigration as well, also from Africa, East Europe, Middle East, etc. Hence the recent riots in Paris. (And they don't 'support' them when they are working low paid jobs, now do they?)

However, reading OO's descriptions, you can see that there is more inequality in the US, more money going into fewer hands all the time...

OO Says:
Well, it may not apply to these folks in the NYT, but many bankers made serious dough in the last 3 years, that is a fact. It seems like many people in the hedge fund industry scored big time, and they were not afraid to flaunt their wealth in front of their classmates, writing $200Ks, $300Ks to alumni fund, and talking openly about their multi-million dollar bonus.

StuckInBA Says:
I have a friend here in BA who works for an investment house. Even the IT engineers were awarded minimum 2x annual salaries in bonus. Being at the right place at the right time, is all that matters.
-----
I wonder exactly where all this dough is extracted from, and to what use it's put. Any insights?

DS,

There's a certain irony in zidane2 fulminating about 3rd world immigrants, given that zidane1's Algerian parents emigrated to France. IIRC from the World Cup bio's, Zinedine Zidane grew up in a VERY poor and tough neighbourhood.

People keep saying that Cupertino has good schools.

I think they mean, high scores on standardized tests.

Unless you're genetically wired to think that high marks on standardized tests means the same thing as "good education" (perhaps from centuries long tradition of civil service exams), well, most people with common sense know that there's more to good schools and good education than high scores on standardized tests.

I forgot the rule "Google first, ask later" and wrote :
Is property tax deductible under AMT ?

The answer is obvious no. That's a big OUCH !

So let's take these oft-quoted 2 income tech couples. In CA 200K of income virtually guarantees AMT due to high state taxes. (That's an irony in itself, but let's tackle it some other time.) I hope people realize this before buying.

So if they buy a house for 1M, the approx 12K of property tax WILL NOT be deductible as they will be hit by AMT. I will pay 22K on rent this year. Even if I win the lotto and get 1M, by buying the house, I will only "save" 10K per year on housing costs, assuming NO costs like HOA and insurance. And not get 30K of SAFE interest after tax.

Buying a house at this time at these prices never made any sense. But AMT makes it even worse.

Anyway. Looking forward to the game tomorrow. I am rooting for Colts. I have heard enough of this Peyton Manning cannot win big game BS.