Own vs. rent?

[jeff2006]

Quote:

Originally Posted by kcowan But we know people who also downsized to a condo and they often encounter problems with their condo council. In fact, they are often amazed at what we can do that their condo council prohibits.

Keith -- this is very interesting. Would you elaborate some based on your experiences? thanks very much . . .

[mathjak107]

here in new york city renting is far the better deal right now..rents vs cost of ownership are way out of proportion

[kcowan]

Quote:

Originally Posted by jeff2006 Keith -- this is very interesting.* Would you elaborate some based on your experiences?* thanks very much . . .

The landlord allows sublets and home swaps without pre-approving the new tenant. For a vintage collector vehicle, they have a special lockup away from the daily drivers. Also boat storage. They are flexible on allocating their common storage lockers to those that have the need. They provide separate locked bicycle storage. They lend ladders and tools for personal projects.

Some of these might be common to certain condos, but they are not universal. They even fed our cats once when we were unexpectedly detained out-of-town.

[jeff2006]

Quote:

Originally Posted by kcowan The landlord allows sublets and home swaps without pre-approving the new tenant. For a vintage collector vehicle, they have a special lockup away from the daily drivers. Also boat storage. They are flexible on allocating their common storage lockers to those that have the need. They provide separate locked bicycle storage. They lend ladders and tools for personal projects. Some of these might be common to certain condos, but they are not universal. They even fed our cats once when we were unexpectedly detained out-of-town.

Thanks for your reply. Sounds like a good situation.

[lazygood4nothinbum]

Quote:

I would LOVE the RV lifestyle (my husband & I did a lot of that while he was alive), but I don't think that's a wise thing for a woman to try alone.

not too long ago, while clicking through and landing i think on pbs, i watched part of a program on rving. if memory serves correctly it was about, or featured in part, older single women rv'ers. there was one much old gal who was particularly inspiring. the film showed her sliding down from the rv driver's seat, which was kind of funny. not sure how she got back up there.

apparently these lady road warriors either drive together in a caravan or they break off and meet up with each other here & there. looked like they were having a great time.

i just tried to find it on a web search but apparently pbs has a bunch of listings featuring rving. if you want to search i believe i saw the program within the past 6 months. or you might search women rv single etc. for more info. good luck in whatever you decide.

[haha]

Here are some links to RV singles groups, and RV women's groups. I am sure that there would be lots of challenges, but it sounds like loneliness would not be one of them!

Ha

http://www.skally.net/solo-net/rv-clubs.html

[ERD50]

I have a question on rent versus buy. Some posters here have commented that in certain markets/times, rents are a bargain compared with home purchase. I've also read that elsewhere.

So, can someone explain that? I would think that if home prices went up, rents would also be driven up, as they are in many ways, in competition with each other. Landlords own the property, and need to make a suitable return, or they would sell (putting pressure on home prices and bringing things in balance), and put their money elsewhere. Likewise, if rents get very high compared to purchase, some of those renters will decide to buy, and some investors will buy up housing to rent it out (driving up home prices and bringing things in balance).

And with dropping property values, landlords are able to drop rents and still make a good return - so competition will tend to lower rents.

It seems to me normal market forces would keep rents and property values at some sort of parity.

Am I missing something? Or are they really different markets with their own supply/demand, since many rental units are just not in the same market as, say, single family homes?

TIA - ERD50

[mathjak107]

well heres an example...a co-op i own as a rental sells for about 160,000 here in nyc...i can get about 1000-1100 a month rent...the maintaince is 600 a month which includes taxes and the buildings share of the mortgage...if the building didnt have its own mortgage then the apartment would sell for that much more....anyway anyone buying that apartment today would have costs way over 1,000 a month.........my tenents are way ahead investing the difference and paying rent

[ERD50]

Quote:

Originally Posted by mathjak107 ...anyway anyone buying that apartment today would have costs way over 1,000 a month...

OK, so the only reason anyone would buy the building is if they were expecting significant appreciation of the property. Otherwise, why sink $160,000 into something with no/negative return.

The renters, in this case, may be paying less for housing, but are giving up a chance (and risk) of capital appreciation (depreciation).

Another way to look at is the renters are funding the landlords 'gamble' in real estate? So each gets something out of the deal.

-ERD50

[Andre1969]

I had thought about renting my condo out back in 2002. At the time, it might have sold for $100-105K, but I could've probably rented it for $1200. I sold it in late 2004 for $185K, and I think an equivalent unit like that would go for around $240-250K today. However, it would probably still rent for about $1200 per month.

One thing that might keep rents down is people who hang onto property for a long time. For instance, if I had rented out my condo, I would have made a small profit, as $1200 per month would easily cover the mortgage and condo fee. But then, I only paid $84K for it back in 1994. However, someone who bought an equivalent unit for $240-250K would lose money renting it for $1200 per month. However, since that's what many equivalent units go for, he has no choice but to rent at a loss. Otherwise the place will just sit, vacant.

I'm sure a lot of people are renting now because they sold a house, bagged the profit, and are sitting on the sidelines. However, there are other people who simply can't afford to buy a house, and their income will only go so far. So even if the value of the real estate is shooting up, you're not going to be able to get significantly more from the renters, because that's like trying to bleed a turnip or whatever the cliche is.

I'm guessing that a lot of rental property ends up getting sold and taken out of the rental cycle when values really skyrocket. With fewer rental properties available, that might drive up prices. Or it might just drive out the renters, who move to a more affordable neighborhood.

[kcowan]

Quote:

Originally Posted by Andre1969 ...I'm sure a lot of people are renting now because they sold a house, bagged the profit, and are sitting on the sidelines.* ...

We are renting now and very happy. During the current housing boom, many renters are leaving to inhabit their newly-purchased homes. Our landlord is investing heavily in improvements to try to attract new tenants. The boom has not stopped here yet. When it does, then much of the condo inventory from the flippers and others that cannot pay their ARMs will start competing with rentals keeping the rates down.

We prefer REITs and builders stocks (not now) as our way to keep an exposure to the real estate sector. Much more liquid.

There is a period in the trough between booms that rentals are in demand when rents increase - about a 2-year period every 7 years of so.

[ShokWaveRider]

We just went out to Craigslist last June, Posted a Rental Wanted Add, giving a brief history of Myself and DW ... ER'd, owned a home for 25 years in SoCAL, No kids or pets, went sailing for 2 years, Engineer, Educated, blah blah blah... looking for a Furnished accomodation 2 or more bedrooms in Xyz location. Got a few responses, dealt with two, explained that we would prefer to have utilities included and were prepared to pay $Xyz per month. One was a broker with many other properties. I seem to remember turning down here offers 10 - 15 times before she finally quit calling me. The other said we could talk about it in detail when we met and set up an appointment (1 phone call). We ended up paying approx $150 less than what she was originally asking after we arrived for the meeting and moved in 2 days after. No Broker, No contracts, no security deposit etc. We have been here over a year. I still get calls from the other broker she now wants to offer me property at the same price as I am paying now. But I refuse to deal with her. She simply does not get it.

Simply put, if you do not use a broker (Brokers do not really care about the tennants only their check book, my landlady told me this as she herself is a realtor Broker and handles some rentals, but for HER property things were different)

She stated that good renters are really hard to find and when you get them you make sure they are happy. To make me happy you charge me less money. In return I pay you 2 to 3 months in advance in cash, keep your place as if it is my own and keep my word. She, has no worries, can drop in if she likes and can stay when I leave for a vacation if she likes. I even offered her the spare room over night once when she was travelling through. She never took us up on it, but is coming in August for a couple of days when we go to DC for a visit.

Sooner or later she will want to sell the property and will let us know, then we will have to decide whether to rent again or buy, most likely we will rent. We will have 60 days to find another place as we also negociated that termination agreement both ways. I will go back to Craigs list or the newspaper place and add and in the largest letters available state ABSOLUTELY NO BROKERS!

SWR