patrick.net

elliemae,
That make me hate them even more.

Note: Though it doesn't apply to me personally, I am renting from a friend who bought in the 70's with traditional loan. They paid it off long time ago. The house was like $200k and I'm paying $850 to rent the whole place. My point is: Luckily, I'm avoiding to get milked by any homedebtors in any way I can.

Cheers.

My point is that you're paying for their expenses, which includes taxes & insurance. Mine is due annually in November and is quite affordable. I don't have a McMansion. But renters are paying for the owner's expenses and profit. No offense meant here.

Pragmatism. Is that all you have to offer?

If I buy the house I'm living in, I'd have to pay $2500.

Now I only paid $800 per month for rent. No maintenance, "owner fix all" (garage door, water pipes, electrics, heater etc), no HOA, no Mello Roos, no Property tax, no home insurance. I paid month by month. Who's the sucker?

Suck to own unless housing become truly affordable again.

"Time is up, pay up the property tax! Sucker homedebtors. ha ha."

If I had to buy the house I currently own, it'd cost $1,050 a month. I could rent it for about $1,500. My current payment is $800.

That includes everything. I've lived here 10 years, have few repair bills (average over the time I've been here - $20/month). There's no such thing as Mello Roos here, taxes are included, insurance is included.

I realize that renting is right for you. But if the owner of the home you're in wants you out, you're gone. And if his costs increase, your rent increases. You're lucky that you have a good landlord. Many people don't.

My mortgage is $1200 a month. the home would rent for $1600 a month. Oh yeah, also my debt drops $2000 a year. I'm pretty good at fixing most things, but I'm sure it could use carpet and painting in a few years... (been here for 5 years so far)

Now, if someone had bought this home in 2006 their mortgage would be twice mine. Or if someone hadn't had 20% down... whatever...

quit gloating. Also, why would someone rent you a home for $800 that has a market rate of $1500 a month? either its bs, a family member or well... non cash remuneration.

To be fair, some of you folks probably rolled a nice big chunk of your bubble equity from one bubble-era house sale into the houses you currently own.

By the way, rent is not dictated by the whims or expenses of a landlord, but by local average rents, which are dictated by demand/local salaries/wages. If you're renting a place out at negative cash flow, you are not really a landlord -- just a speculator, using a renter as a stopgap while you wait for the property to appreciate. A proper landlord owns a place flat out, and can't help but make positive cash flow.

One of the killing factors to me as a home debtor were the property taxes. It was $8,000 per year, and I didn't/couldn't save it up monthly, so, you guessed it, I wasn't able to pay them at the end of the year, either. Frickin math. lol

Equity loan BS is what kept me alive, but obviously not for long. My career as a home debtor lasted less than ten years.

stocksjustgoup says

One of the killing factors to me as a home debtor were the property taxes. It was $8,000 per year, and I didn’t/couldn’t save it up monthly, so, you guessed it, I wasn’t able to pay them at the end of the year, either. Frickin math. lol
Equity loan BS is what kept me alive, but obviously not for long. My career as a home debtor lasted less than ten years.

Sad thing is that there was another person right behind you in line waiting to live in your home. Actually abou 200 people behind you.....the emotional weight of a home buy overpowers any common sense people have when making a business decision.

My taxes are due? Thanks for the reminder. I will just call up the tenant and have him pay my taxes.

Oh Noes! I need to pay my property tax!
Guess what, in 15 years i'll be paying property tax, insurance and maintinance but no mortgage. I will be paying less than you pay in rent....
I didn't buy at the peak of the bubble, I put money down (albeit a small %) and I sure as hell didn't get a McMansion :P

Taxes are based on what a city requires, in general. Of course that doesn't always follow the rule of thumb, and cities will spend whatever they can get away with.

But if every house went up to 200M tomorrow, your taxes would be the same on that house, because the % would decrease because the city wouldn't need 200X the incoming they're currently getting.

What I find amusing is that there was no concern in the housing price prop-up propaganda about the effect of lower housing prices for county. Their lower property tax intake from low priced resales will crush them.

The lower taxes will be corrected by changing the % they charge on houses.

Also, why would someone rent you a home for $800 that has a market rate of $1500 a month?
In Prop 13 land, for some it can be about preserving an asset that will be passed on to their heirs. The quality of tenant is more important than maximizing profit as they are already making money hand over fist with a paid off asset and low tax basis.

Thank you big time for the reminder. This totally slipped my mind. I probably would have realized it when I started doing my federal taxes and by then I would owe a late penalty.

Thanks again for the reminder.

50% off is not worth the money for a good tenant. You could hire a management company that would likely only take 20-30% and you would still be 20% above AND not have to do anything regarding tenants anymore.

If you rented for 1 year at $1500 you could have it left open for another without a tenant before you were in worse shape.

Those are massive numbers. If it was 15-20% difference, that could be worth it. close to 50%? No way. That isn't a landlord giving a break to a good tenant, that's a LL that has no clue what they're doing.

You could hire a management company that would likely only take 20-30% and you would still be 20% above AND not have to do anything regarding tenants anymore.
I'm sorry, but the management company doesn't give a rats *&$%! about preserving the asset for future generations. If Mayasako isn't pulling our leg, I'd say its a combination of willful ignorance of the market, doing Mayasako a favor, and preserving the asset for their heirs. Admittedly, most of the cases I've seen reported are usually in the $2,000+ rental range.

$2000 rental instead of $4000? That would be $24000 a year. That is a lot of fixing, and asset preserving money.

I don't disagree. I'd say a 47% discount is near the upper limit! BTW, were you serious about changing the % they charge on houses? I don't see Prop 13, at least for primary residences, changing any time soon. Some parcel taxes, maybe...

They don't need to change the % on old houses, only new ones. Houses change hands enough that increasing the limits will simply put more prop 13 properties further behind on their taxs, and push more of the tax burden onto new home buyers, but they can do it.

If they increase taxes to get more from the ones with the lower prices, then they are screwing over the ones that paid a higher price. I guess they can come and devalue their assessment for those properties.

Better yet, why don't they just send people a bill for whatever amounts they like? That seems to be how it works anyways =b

"Congrats, homedebtors!

Your mac-mansion property taxes are due!! Pay up, suckers!!

A happy debt-free renting friend of yours,
Masayako"

I'm glad you're happy paying rent. I'm not. So I did something about it. I bought a cheap place for cash "at peak" - 3bdrms, detached garage, on about 1/3 of an acre. My property taxes are about $120
a *year*. No mortage, no HOA/POA/SID fees, no "common charges", just $10 a month "rent"(property taxes) + utilities. I could rent the place out for $300-350 per month plus utilities, if I wanted to.

There's "buying stupid"(overleveraged McMansion) and "buying smart"(cash or at most, 3-5 year personal loan) for an inexpensive, low-tax place well beneath your means.

Rents historically go up. If you're renting to save money to buy, that's great. But if you're renting as a long-term/perma-strategy, I predict it will suck to be you come retirement-time, when you have no equity in anything, and will be forced to pay market rent on a fixed(and increasingly dicey sources of) income.

A happy, debt-free, rent-free friend of yours,
Soeren

masayako says

elliemae,
That make me hate them even more.
Note: Though it doesn’t apply to me personally, I am renting from a friend who bought in the 70’s with traditional loan. They paid it off long time ago. The house was like $200k and I’m paying $850 to rent the whole place. My point is: Luckily, I’m avoiding to get milked by any homedebtors in any way I can.
Cheers.

"Only" $850 a MONTH? Vat a bahgain! $850 pays my "rent"(property taxes) for SEVEN *YEARS*. Clue: You ARE getting milked, LOL!

My SS statement says I can look forward to a whopping $850 or so per month if I retire in 10 years at 62(assuming I even live that long,and assuming the USSA hasn't gone the way of the USSR by then).
Do I wanna be paying $10(or even $40) a month(*if* my property taxes *quadruple* in the next 10 years), or do I wanna be paying market rent(which could easily be well over $850 a month by that time, with inflation)? I don't know about you, but I'll happily pay my property taxes, and know that,not only will I have a roo(however modest/humble) over my head, but as a bonus, I'll be able to keep the lights, water and heat/AC on, and eat, as well. No such guarantee if I'm a renter.

I will be paying less than you pay in rent….

If Masayako is smart, he's salting away what he isn't paying on a puffed-up home mortgage and will buy outright well before 15 years. It can be done.

There's special place in hell, for the idiot paid 300% more in 06, and or bought the silly notion that it was the bottom in 08-09 for that matter, than the same house was worth in 99.

The pathetic part is those bastards are also Voters.
And our current government reflects that.

I get outraged when I hear a Congress critter, bitching about home prices falling, because it's apparent that he was one of those very Idiots.

My property tax and insurance bill isn't HUGE. Mortgage payment isn't all that big either and WILL BE PAID OFF NEXT YEAR. Sorry dude. You can't blame me for the bubble. I'm not underwater. It's been many years since we bought our current house, and we didn't buy more than we can afford. Property taxes are self escrowed. The funds actually earn me a hundred or two each year in a 4% account. Paying that bill when it comes isn't a hardship.
Sorry, your point was?

Exactly. I'm saving for a big downpayment. I'm not against buying smart, I'm against buying beyond one's mean.

Austinhousingbubble says

I will be paying less than you pay in rent….

If Masayako is smart, he’s salting away what he isn’t paying on a puffed-up home mortgage and will buy outright well before 15 years. It can be done.

You are not really in house debt and you don't have a massive property tax bill to pay, so this thread is not directing to you. Why get defensive? Nobody's talking about you.

Payoff2011 says

My property tax and insurance bill isn’t HUGE. Mortgage payment isn’t all that big either and WILL BE PAID OFF NEXT YEAR. Sorry dude. You can’t blame me for the bubble. I’m not underwater. It’s been many years since we bought our current house, and we didn’t buy more than we can afford. Property taxes are self escrowed. The funds actually earn me a hundred or two each year in a 4% account. Paying that bill when it comes isn’t a hardship.

Sorry, your point was?

The point being: Don't forget when they offer you that big loan, to bid against the other eager beavers on that overpriced home, it means the taxes will be hundreds of dollars per month and THEY NEVER END.

It will be interesting to see the next Real Estate valuation in my County which the mill levy is based on. I am expecting it to go down since the last time was 2 years ago near the top of the bubble. Logic has it that it will go down and the institutions such as schools, road dep't, police, etc. that get funded by this evil taxation will be hit hard. Too bad they have to face economic realities of declining budgets after a long streak of annual increases while the RE bubble was growing.

Property tax is a great evil. You don't own your property - it is ultimately owned by the local gov't with their forceful taxation. It is the breaking of one of the 10 Commandments - Thou shalt not steal. It is a violation of the principle of "a good man builds up inheritance for his children's children".

masayako says

You are not really in house debt and you don’t have a massive property tax bill to pay, so this thread is not directing to you. Why get defensive? Nobody’s talking about you.

This thread is directed toward people who own homes, is it not? And people who pay taxes? Therefore it actually applies to him. Once it's out there, it's open territory.

My house isn't huge, but it's bigger than some and the amount of square footage per person is 1700+. I owe on the place and pay taxes. It applies to me too.

Thanks for pointing that out elliemae.
masayako… Are you angry at homeowners just because they are homeowners?
Homeownership is not inherently evil. Neither owning or renting is smarter or better.

I think people should make choices that are right for them, within their ability to manage those choices. We did that when we bought our first, and subsequent homes. Owning may not always be the right choice for me. As this house gets older it consumes more maintenance dollars. I know that if I sold my house, the proceeds would pay my rent for many years. So I am considering that option when I retire.

For you, renting is the right choice for now. You’ve got a good deal.

It works for your landlord too. He is able to rent at a price that is easy to collect. He owns the house outright, so there is profit in that $800 rent, over and above the property tax, insurance, maintenance, and income tax.

I dont mind paying property taxes so much. I get to deduct it on my tax returns plus hopefully the money is put to good use which will help increase my property value.

I view maintenance the same way less of a burden more of an opportunity.

toothfairy says

I dont mind paying property taxes so much. I get to deduct it on my tax returns plus hopefully the money is put to good use which will help increase my property value.
I view maintenance the same way less of a burden more of an opportunity.

I dont mind paying my prop tax, i do mind the jackasses buyers who overpaid for their home by $1m and
are crying how unfair Prop 13 is. I keep telling them, if you didnt over pay to begin with
you wouldnt be paying so much in prop tax. Dumb and freaking dumber!

I"ll get back to you as soon as ClaraCoCo embellishes her avatar a hair more...

458e says

I’m Jennifer Raff by name. I live in USA,

The OP references some anomalous and extraordinary rental agreement that puts him considerably under market value to make his point.

Post fail

I don't have a McMansion, it would not be within Christian principles. Taxes are too much

BUY,NEVER RENT!
Some overpaying fool will make you rich when you sell.