patrick.net

Ok 3br 1ba house within 2 blocks of downtown mnt. View. For $3000 or less.

Folks -- if this thread isn't the most compelling argument against the better-off-renting mindset, then truly nothing is.

Personally, I'm nearing the point I would rather reach up my asshole and pay for a place with part of my spleen than enrich my miserably cheap, soul-starved, balding, flab-gutted, penny-loafer-wearing, khaki short-sporting, bottom shelf cereal-eating, LIVE STRONG bracelet-wearing, Zig Ziglar/Warren Buffet-worshipping, penny chiseller of a landlord with any more of my precious lucre.

That, and engaging with any human being so stinking drunk with the fear of poverty every month is just...depressing.

I also think 10% all at once might be too much. Try something lower, like 5%, then reevaluate again next year.

Austinhousingbubble says

Folks -- if this thread isn't the most compelling argument against the better-off-renting mindset, then truly nothing is.

I moved to Denver 2.5 years ago and rented a SFH for $1500/month -- we figured it was $200-$300 under market when we rented. We got a year lease and once that expired the landlord only wanted to do month to month, so we knew the situation was tenuous (we also knew that the neighbor with the same landlord had been month to month for 10 years)

A few months back he emailed us to let us know that the rent was going to increase from 1500 to 1750, then to 2000, and then to 2250....all with improvements, and all within a 9 month time window.

In the end he gave us notice that he needed the place for himself, so we had to move. We had a few months, but given the rental market in the area, we jumped on the first thing we found (4 days later). The move totally sucked.

Was it stressful? Yes! The uncertainty, the move, the suddenness of it all...all stressors. Would I do it differently? Probably not. In the 30 months we lived there we probably saved on the order of $7500 in rent, which is about 1/2 year of 401K savings. Our savings over buying a comparable house is harder to estimate (and we wouldn't buy a comparable house anyway), but we came out way ahead financially. At the end of the day I feel like we did the right thing given our situation. We can't afford a house in this school district, my employment situation is tenuous (so buying a house didn't make sense), and pre-emptively moving to a more expensive place just to avoid some uncertainty didn't make sense to us.

So, no, this is not a convincing argument against renting for my situation and tolerance for uncertainty, etc. A convincing argument would be if rents went up, or if prices went down, making it a clear financial benefit to own.

Austinhousingbubble says

Personally, I'm nearing the point I would rather reach up my asshole and pay for a place with part of my spleen than enrich my miserably cheap, soul-starved, balding, flab-gutted, penny-loafer-wearing, khaki short-sporting, bottom shelf cereal-eating, LIVE STRONG bracelet-wearing, Zig Ziglar/Warren Buffet-worshipping, penny chiseller of a landlord with any more of my precious lucre.

Wow. Deep breath.

Does not seem to be a shortage of homes for rent in that area. There is a whole list of different properties for rent that were listed today.

http://sfbay.craigslist.org/pen/apa/3015976089.html

http://sfbay.craigslist.org/pen/apa/2991660230.html

http://sfbay.craigslist.org/pen/apa/3016039504.html

http://sfbay.craigslist.org/pen/apa/3015268102.html

http://sfbay.craigslist.org/pen/apa/3004160812.html

Andy S says

Does not seem to be a shortage of homes for rent in that area. There is a whole list of different properties for rent that were listed today.

http://sfbay.craigslist.org/pen/apa/3015976089.html

http://sfbay.craigslist.org/pen/apa/2991660230.html

http://sfbay.craigslist.org/pen/apa/3016039504.html

http://sfbay.craigslist.org/pen/apa/3015268102.html

http://sfbay.craigslist.org/pen/apa/3004160812.html

Those aren't even in Mnt. View. East Palo Alto is low income + high crime...the other listings here are 2br condos?

If you do the search for 3br in Mnt. View there are 15 total for rent and Most are apartments.
http://sfbay.craigslist.org/search/apa/pen?query=&srchType=A&minAsk=&maxAsk=&bedrooms=3&nh=81

E-man says

Toothfairy,

Losing a good tenant over a couple hundred bucks is not worth it in my book. Instead of raising the rent $300, why don't you raise it $100 and call it a day?

Learn from your victory. Prosper from your failure.

actually they're not perfect tenants. If I only raise the rent $100 these are the type of people who would just find $100 more dollars worth of things to fix each month.

Raising someone's rent from $3,000 to $3,300 is not something to be taken lightly. Personally, I always felt that paying over $1,600 a month in rent is ridiculous regardless of how it compares to if one "owned" the same dwelling. Obviously, many people do not share the same point of view. I know someone who paid close to $4,500 a month to live in mission san jose district in fremont. I believe at the time the market value of the place was $1.2 million. So yeah, while it may have been better to rent than own same pad, I still would never pay that much in rent. I guess you need to find out if you are likely to replace the renters within 30 days. If so, you will come out ahead.

toothfairy says

actually they're not perfect tenants. If I only raise the rent $100 these are the type of people who would just find $100 more dollars worth of things to fix each month.

"the type of people" that would demand premium service for premium rates. Danm them!

dublin hillz says

Personally, I always felt that paying over $1,600 a month in rent is ridiculous regardless of how it compares to if one "owned" the same dwelling

Except since I don't live in CA my acceptable rent number would be much lower then 1600/month

swebb says

So, no, this is not a convincing argument against renting for my situation and tolerance for uncertainty, etc. A convincing argument would be if rents went up, or if prices went down, making it a clear financial benefit to own.

I both understand and sympathise, Swebb. In fact, I would add that I think rents are presently enjoying an anomalous and ultimately temporary boost from a confluence of unique factors in the marketplace. My point was, the overall tenor of this thread and others like it has induced some serious misgivings (gag reflex) in me as a renter/host. I am convinced there are at least as many vested interests lobbying for the rent-vs-own argument as there are behind the buy-now/be-priced-out-forever crowd. Increasingly, it seems like little more than a choice between two different taxonomies of parasite.

Yes, I have saved a prodigious amount of money renting my little granny shack, and in a way, I feel I've become addicted to watching my decimal stuff grow. However, as you well know, renting does suck, and moving really sucks. I guess as prices slowly drift downward and my savings/compensation gradually increases, the greedy machinations of all these genius infesters have left me feeling at least a little more philosophical about the premiums of buying.

BTW - Denver's corrected quite a bit since you moved there, no? Prices do seem to be going down, and rents do seem to be going up there. Nice part of the country -- congratulations.

Austinhousingbubble says

, renting does suck, and moving really sucks.

Where does this notion come from that renters are constantly moving?

Growing up, I had two friends whose parents rented. One lived in the same apartment for 10 years. The others lived in a SFR in Monterey Park that they rented for over 20 year.

Everyone making an argument against renting keeps citing the "fact" that renters have to move all the time. Do renters really move more often than home debtors(who move every 7 years, yes yes?)

dodgerfanjohn says

Where does this notion come from that renters are constantly moving?

In my instance, it's an empirical observation.

dodgerfanjohn says

o renters really move more often than home debtors(

They do if they want to enjoy the leverage that renting allows vs owning where housing costs are concerned. When rent rises, most probably pay it to avoid the stress of moving -- even despite the likelihood that a comparable rental for less is available nearby.

dublin hillz says

So yeah, while it may have been better to rent than own same pad, I still would never pay that much in rent

You are paying that much and more to rent money. Either from yourself if you paid all cash or from the bank if you didn't. I don't see any difference except renting for 4500/mth saves you more money. Now, if you are gambling on the house appreciating then all bets are off. Be honest.

ok rents are just going batshit insane now. Look at this!

it seems that landlords are just setting the price ridiculously high and seeing if anyone bites.
http://sfbay.craigslist.org/pen/apa/3017822124.html

or you can rent this townhouse for $5300 per month

http://sfbay.craigslist.org/pen/apa/3017734266.html

toothfairy says

ok rents are just going batshit insane now. Look at this!

it seems that landlords are just setting the price ridiculously high and seeing if anyone bites.

http://sfbay.craigslist.org/pen/apa/3017822124.html

They can do what they want. It has no effect on my rent. None. Wishful thinking in a down market. These people are probably so far underwater and they are going to lose the house unless they get this rent. $6k/mth sounds like about the cost of ownership, so they are trying to break even. Good luck with that.

toothfairy says

ok rents are just going batshit insane now. Look at this!

it seems that landlords are just setting the price ridiculously high and seeing if anyone bites.
http://sfbay.craigslist.org/pen/apa/3017822124.html

or you can rent this townhouse for $5300 per month

http://sfbay.craigslist.org/pen/apa/3017734266.html

Sheesh, that is pretty wild. Talk about rent-seeking!

Mountain View has gotten really nutty in the last 18 months. I was negotiating rent DECREASES in summer 2010. Last year, I think that Google's 5000 person hiring spree really threw a wrench into the gears, along with generally increased demand for rentals since RE in this area is priced above many people's comfort zones, but they still want a short commute (me me me). I expect this year to be another one where rents go up in the area, overall. However, I am seeing a lot of very large complexes go up all around here, and investors are turning RE into rentals left & right. Combine those hitting the market and rents possibly violating enough people's comfort zones, and I think that next summer will see rents flatten out or decrease. This is all with respect to MV, Sunnyvale and adjacent parts of SC & SJ.

bmwman91 says

Last year, I think that Google's 5000 person hiring spree really threw a wrench into the gears,

Imagine what happens the day Google does its first layoff. Kaboom!

dodgerfanjohn says

Growing up, I had two friends whose parents rented. One lived in the same apartment for 10 years. The others lived in a SFR in Monterey Park that they rented for over 20 year.

Well if odds are you are staying put for 10-20 years you might as well buy.. The downside risk is minimal. Even people who bought 10 years ago in LA are about even with most renters in most scenarios. And if they took out equity on their home during the bubble days and invested it all into Apple stock then they made a killing. I doubt any renters were able to qualify for a $100K in equity loan in 2005-2006 to invest in Apple.

I keep hearing stories about "opportunity cost" hurting homeowners... But "opportunity cost" can turn into "opportunity loss" just as easily for a homeowners as a renter...

bmwman91 says

Mountain View has gotten really nutty in the last 18 months. I was negotiating rent DECREASES in summer 2010.

Lower rents in summer of 2010 were due to the residual effects of the "fear of end of the world" that was still very real since March 2009 lows. Once the "world isn't going to end" fear subsided.. rents went back up.

BoomAndBustCycle says

Lower rents in summer of 2010 were due to the residual effects of the "fear of end of the world" that was still very real since March 2009 lows. Once the "world isn't going to end" fear subsided.. rents went back up.

Yeah that makes sense. I assume that the various tax credits for house buyers also suppressed rental demand. Aaah, those were the good days lol.

Meanwhile on the tennants of scumbag landlord forum so and so is posting.

Is it unreasonable for me to rip out the copper wire and pour concrete in the toilets, when a landlord wants to raise my rent, because he's playing the numbers?

Jerry says

How can that be? Prices are falling. Duration has nothing to do with it.

Ok, scenario for you...

Buy in 2012...

2017.. home prices hit bottom. (Officially in every big metro)

2023 home prices recover back to 2012 prices...

2030 new housing bubble starts a brewing and prices start rising toward 2006 bubble levels...(If you believe our BOOM AND BUST society will not be fixed) Then our Millennial generation has their student loans paid off and are ready to buy a house before they are too old...

Sure i missed out on the 2017 absolute bottom.. But you have something to sell in 2030.. vs. nothing to sell as a renter.

RentingForHalfTheCost says

dublin hillz says

So yeah, while it may have been better to rent than own same pad, I still would never pay that much in rent

You are paying that much and more to rent money. Either from yourself if you paid all cash or from the bank if you didn't. I don't see any difference except renting for 4500/mth saves you more money. Now, if you are gambling on the house appreciating then all bets are off. Be honest.

I would not rent for $4,500 or buy for $1.2 million. Either option is completely insane.

dodgerfanjohn says

Where does this notion come from that renters are constantly moving?
Growing up, I had two friends whose parents rented. One lived in the same apartment for 10 years. The others lived in a SFR in Monterey Park that they rented for over 20 year.
Everyone making an argument against renting keeps citing the "fact" that renters have to move all the time. Do renters really move more often than home debtors(who move every 7 years, yes yes?)

Good question. I only have my own experience go draw on, but having owned two houses and rented countless other dwellings, I would say that my average duration was about the same (both houses were

And for the record, renting doesn't suck. Are there downsides? Absolutely! But on balance I find it to be a pretty good deal. When I do need/want to move, it's a whole lot easier being a renter. I think a big part of it is that it is a choice. I may be in a small group, but I could easily afford to buy/qualify for/pay the monthly payments on a nicer house than I am currently living in. I don't do this for a variety of reasons, but it's my decision...And it being my decision makes it easier than if I just had no choice but to rent. I guess.

EDIT: Why do my comments keep getting clipped? (fixed)

dublin hillz says

RentingForHalfTheCost says

dublin hillz says

So yeah, while it may have been better to rent than own same pad, I still would never pay that much in rent

You are paying that much and more to rent money. Either from yourself if you paid all cash or from the bank if you didn't. I don't see any difference except renting for 4500/mth saves you more money. Now, if you are gambling on the house appreciating then all bets are off. Be honest.

I would not rent for $4,500 or buy for $1.2 million. Either option is completely insane.

Agreed on the insanity of either option.

What was the old rule of thumb, maximum of 33% of gross income for a mortgage or 25% of gross income for rent?

$4500 a month rent should then be $216K gross, its not one-percenter income, but its in the top 5%.

Does 1 in 20 (5%) of households pay $4500 a month or more? I would think not.

^^^^^

This is interesting.

I pay just over 25% gross in rent.

I do not believe I could find a place I want to live in at the moment for 33% gross....

Theres areas I like that are or we're pushing that point, but now there's zip as far as inventory.

swebb says

And for the record, renting doesn't suck.

Ha! I'm wondering when it will become the thing to start spamming such comments with Landlords are Liars.

For me, renting is a means of wealth preservation. As a control freak who's sensitive to his surroundings, that's the best argument I can make for renting over owning.

BoomAndBustCycle says

if they took out equity on their home during the bubble days and invested it all into Apple stock then they made a killing

LOL, they didn't buy AAPL with it, they squandered it on Pergo floors, stainless steel appliances, granite countertops, and a tropical vacation.

BoomAndBustCycle says

Sure i missed out on the 2017 absolute bottom.. But you have something to sell in 2030.. vs. nothing to sell as a renter.

Except all the stocks and bonds you accumulated over the years. Enough to buy two or three houses with cash.

Philistine says

BoomAndBustCycle says

if they took out equity on their home during the bubble days and invested it all into Apple stock then they made a killing

LOL, they didn't buy AAPL with it, they squandered it on Pergo floors, stainless steel appliances, granite countertops, and a tropical vacation.

Not to mention paying of the ballooning credit cards and getting that new motorcycle and ski boat. Oh, and that overpriced 1 month vacation in Europe. All while their salaries just barely beat inflation. Can you see the bubble? Nah, forget it.