Who's pay's $1,300 for rent?
Delaware City, DE · Member since 2016 · 25 posts · 13 votes
Who's pay's $1,300 for rent?
Most Popular Reply
Investor · Atlanta, GA · Member since 2013 · 3k+ posts · 3k+ votes
9yLocation, location, location
When I lived in California I paid $ 2400 and that was a bargain, because I was 30 miles south of L.A. And no, I couldn't have bought with that money. Same in the SF Bay area.
Maybe it's a lot for rent in Delaware City, but it might not be somewhere else.
138 Replies
- Investor · Tampa, FL · Member since 2016 · 679 posts · 288 votes9y
@Tyler Ansell, Hello from Tampa. You mean that you are looking to Rent a 3/2/2 house in a C+ area which to me would maybe say its on the East Side of I275, which I consider the War Zone? If I were going to Rent the 3/1.5 house that I am just Selling down by the Base, I would try to get $1200 after renting it for $1000 a month for ten years because the neighborhood is being built out with $250K Town Homes. My tenants are usually, paid by the Hour workers and none of them can afford $1350 a month for rent. In Tampa, my experience was that if you can afford $1000 a month in Rent, you were more of an Educated Manager type who would be looking to Buy rather than Rent. This does not seem to be the situation right now, even with rock bottom Interest Rates, as no one seems to be able to save any Money for a Down Payment. This is why I never ask for a First, Last and Security Deposit. Everybody is broke and living paycheck to paycheck. After 30 years of Renting I have no Faith in any new Tenant to follow through with any of the considerations on the Contract. I am waiting for this new President to try and do what he is going to do and the latest warning from H. Dent is that six months from now the phoney Employment number is going to be cut by 50,000 workers who are Retiring from the Labor Market by 10,000 or more a month. We are counting the different nails being driven in our Economy until the next downturn. C+ for $1,350? Big house in the wrong area?
- Twinsburg, OH · Member since 2016 · 1 post · 0 votes9y
I see three trends that support an increase in demand for rentals in the $1200-$1400 range. These are making me get excited about real estate investing following the BRRRR model.
- Much of my generation (I’m in my mid-40s) and younger generations don’t have the skill set to do common repairs or remodeling so they have to pay labor costs for every repair or update.Those who realize they don’t have the knowledge, skills or desire to maintain or renovate a house are renting.
- Renting makes sense for an ever increasing portion of the population. As mentioned in other posts, not many people live in a house for 20 or 30 years.They may be uncertain how long a job will last or want to move again once the kids graduate. All of these and other reasons lead people to rent. In a neighboring city, $100k can buy a 3 BR ranch in decent condition and 3 or 4 are always on the market. Yet the apartment complex that rents 3 BR for $1,200 - $1,400 a month has a waiting list.
- My parent’s generation is going to start renting more. Many of the baby boomers have money or equity, but are tired of handling repairs and updates.They want to rent so they can be closer to their kids or spend their time traveling or taking care of personal needs (ailing spouse, medical issues, etc.) rather than keeping up a house. Others have downsized so they can also rent in warmer climates. For some, if they have to move out of a house with stairs they don’t want to buy again because they anticipate moving into assisted living in a few years or moving in with their children (my criteria will be house with 1st floor master or ranches)
These are all simply my observations and I would value any critique or confirmation.Once I work out some other obligations and figure out where I’m going to land with private school tuition for my son I hope to buy my first project later this year.
- Investor · Pueblo West, CO · Member since 2014 · 310 posts · 213 votes9y
I live on Kauai right now. A modest single family home with 3 beds on Kauai rents for $2,000/month
When I lived in San Diego in 2001, we paid $2900/month for a 5 bedroom house. I'm guessing it rents for $4000-$5000/month today.
I have lived in San Diego (CA), Encinitas (CA), Fort Collins (CO), Erie (CO), Breckenridge (CO), Fort Myers (FL) and Kauai (HI). The average rent across all of these cities for a 3 bedroom house is probably $2300/month.
The cheapest place I have lived has been Fort Myers, FL. I have a 3 bed/2 bath house at the median house price (225K). It rents for $1700/month.
In my entire adult life, I have never experienced a 3 bedroom house that would rent for as low as $1300/month.
Two niches for rentals are young professionals that haven't settled down yet and college students. Some young professionals don't want to buy a house because they could get a job offer with 50K more pay in different city or state. One of my friends makes about 300K/year and rents.
I have college rentals and I try to make them nicer than the competition. Parents and their children with more expensive taste take notice. I have 3 parents on every lease. Each parent household probably makes 150-200K. As a result, I have 450K-600K of income to pay $1700/month in rent.
- Rental Property Investor · Oakalla, TX · Member since 2015 · 67 posts · 24 votes9yI pay $1300 for rent which is cheap. I have great credit but just have no desire to live in a house that I buy. I understand I can save that money but in NY it only goes so far.
- Fort Lauderdale, FL · Member since 2016 · 214 posts · 95 votes9y
Originally posted by @Irwin Haddox:
If you have $1,300 rent why not buy?
Our rent is well over that amount. Having owned a home, no thanks. I don't much care for yard work, maintenance, I like to travel, we have a great view of the city, & there is SO MUCH included with our rent. Electric, water, garbage, repairs, all included. Why would I want a home? Plus, if we want to move tomorrow, we can. Having moved across multiple state lines, owning property isn't worth the hassle.
"The things you own, end up owning you." -- Tyler Durden - Fort Myers Beach, FL · Member since 2016 · 225 posts · 124 votes9yI currently pay 2300 in rent and my duplex investment is 1300 a side which is reasonable in this market for an 3/2/2.
- Investor · San Marcos, TX · Member since 2015 · 272 posts · 360 votes9y
My rentals in the Austin area are between $1,500 and $2,200. I have regional managers and transplant tech employees as an example. They all have different reasons for not buying. One has poor credit but makes a lot of money and is probably my best tenant. What I hear a lot is "I want to be in this neighborhood". Not everyone is broke and out of options. It is not the right time for them to buy and they can afford better neighborhoods.
- Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes9y
Originally posted by @Irwin Haddox:
So location, down payment, credit and commute is that it?
Size, age, condition and amenities play into this too. My city has some of the lowest housing rates in the country and if you want to rent a newer twin home with 3-4 bedrooms, then you are over $1300. Even older houses that have 4-5 bedrooms will easily go for over $1300. Like I said, my city is one of the lowest priced places to live in the country so it gets way worse in hotter markets.
- Investor · Tampa, FL · Member since 2015 · 293 posts · 175 votes9y
@Michael Haynes Hey Michael,
The house I currently rent is what I was referring to. It's in Temple Terrace just south of USF and the homes in the area are selling for $150k+, by no means a warzone.
Just for example: $18/hr x 160 hours a month = $2880 income. AKA 46% of income towards rent for a single earner household. I don't think any individuals are renting a 3/2/2 by themselves anyway but IDK.
- Beloit, OH · Member since 2016 · 49 posts · 13 votes9y
When I rented on Oahu, most places were $2500 and up for a nice home/condo. Here in Annapolis the house I currently rent is $1800, knowing both places are just a temporary home I don't want to invest in either place, I rather buy land/property in my home town. It seems that most young professionals have a lot of debt, car, student, possible cell phone and adding another payment such as a home just cant work, so instead they rent.
- Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes9y
@Irwin Haddox These are good questions, but having read some of your other posts you are overthinking this a bit. I sense that you are reluctant to go into real estate investing unless you are sure that everything is foolproof. It is not. You can lose money doing this. Some people do lose money on real estate (yours truly included, thankfully not recently!).
The key to buy & hold (what you want to do) is buying at the right price, in the right area, with the right exit strategy (someone will want to sell that place one day). You might not be able to rent for $1300 in your area (actually you can - my sister lives nearby is how I know), but that doesn't really matter if you can buy a house for $50k that rents for $1000. You can rent properties for $4k or more in San Fran, but so what? You need a million to buy the place. Your biggest (not your only, of course) concern is your margin.
Skyline Properties - Investor · Northern, VA · Member since 2016 · 1k+ posts · 904 votes9y
@Irwin Haddox - Please tell me this is not a serious post. You gotta be either kidding me or must be still stuck in the 1950s. I am renting one of my SFHs for $2400 in Fairfax county, VA. No this is not mid town Manhattan. Lot of people rent for lot of reasons, and not everyone likes to live in a dumpster. And how does one get a VOTE on such a post is what I want to know.
I heard Payton Manning (remember that dude who sits in Diners all day long, and spends rest of the evening talking to strange men in parks.. LMAO) was renting Mike Shanahan's chateau for over 5 figures when he was still playing for Denver. Now I admit that everyone is not Manning, although a lot of us aspire to be, in character and as a player both, but my point is that a lot of people have very valid reasons for renting - people from all walks of life and people at every income level.
- Real Estate Attorney · New York, NY · Member since 2016 · 1 post · 0 votes9y
Some people just do not want to be home owners. I know many wealthy individuals who are perfectly happy renting. If something breaks or goes wrong, they call the landlord. Why do some people lease cars and why do some people buy cars? I invest in real estate in areas and at prices that you would think anyone could afford to buy but the reality is that many are not in a financial position (credit, down payment, etc) to own a home. Finally, I'd say the numbers sometimes work in the favor of renting vs owning (depending upon your location, market factors, how long you plan to live there, etc). There have been times in the past when "market analysts" would recommended that people sell their houses and rent instead - you can compare the costs and see what works best for you - owning (downpayment, closing costs, taxes, interest payments, maintenance, repairs, etc) vs renting (monthly rent).
Michael G. Cassidy, Esquire
- Tax Strategist| National Tax Educator| Accepting New Clients · Member since 2014 · 3k+ posts · 4k+ votes9y
Originally posted by @Manuel Fortes:
I would put emphasis on down payment. Most people can't come up with 20-50k.
This is pretty low on the reasons list.
Most first time home buyers can do a 3.5% down, or a 0 down loan.
- Vendor · New York, NY · Member since 2017 · 217 posts · 88 votes9yI come from the investment banking background and I've met many individuals who are considered high-to-ultra net worth, and many of them have the capability to buy multiple houses in NYC but few do. Their reasoning is that it is less of a headache - i.e. insurance, mortgage, etc. - which is very accurate. Keep in mind these folks pay $10K+ in rent probably. Now as a landlord of several properties, $1300-1500 is what I've seen typically in smaller cities that I own 3-4 BDRs. Rent also correlates with how well the properties are maintained though... I've also seen areas that pay $100/month, and those places are worse than homeless shelters!
- Real Estate Investor · Baltimore, MD · Member since 2015 · 24 posts · 10 votes9y
My husband and I rent a 2br/1 bath condo in northern Virginia (30min drive to downtown DC, 45 min metro ride) for $1500 a month. It is a fully renovated condo in an old building, is not in a luxury brand new high rise as you would imagine based on the price, if that were the case you would be looking at $1600 a month for a studio!
This condo where we live is for sale for $220k, if we bought it our mortgage would put us $600 above our current rent price because of HOA and other fees! Doesn't make sense to buy.
@Andrey Y. I totally agree with you!
My husband and I rent but also own 1 rental in Baltimore soon will be 2, which cover the mortgage, provide us money for the maintenance, vacancies, etc and we pay our current rent from our salaries, both full time employed which allows us to save for future down payments for more rental properties.
A house in this area of Virginia or in Maryland that is this close to DC starts at $500k, if you rent a basement (with bath and kitchen and independent entrance) would cost you $950 a month.
The DMV area is so expensive!!!! I wanted to give people this real example because I feel like the Washington DC area is not talked about often enough. When people talk about expensive states they mention NY and California, if I wanted to get a rental property in a decent area in DC I would have to pay $600k for an old building (and not in a hot trendy neighborhood) without any rehab work. Maybe one day we'll be able to in the meantime we are slowly growing our rental business :)
- Syracuse, NY · Member since 2016 · 9 posts · 2 votes9yI pay 1800 per month for rent (utilities included). Currently trying to buy. Don't want to stay in the area. Didn't have money saved for a down payment at the time. Had horrible credit
- Software Developer · Vidor, TX · Member since 2015 · 922 posts · 639 votes9y
People who want the house with out the down payment, higher note than anticipated due to PMI and the responsibilities (maintenance and etc...).
The day I find a house for rent in my area that's of the same quality as my rentals, I'll rent too. Hell, I'll sign a 10 year lease. Home ownership is for the birds.
- Investor · Emerald Coast, FL · Member since 2013 · 45 posts · 11 votes9yI have several tenants who pay that much. It depends on the area and how long the person wants to stay in that area. I have had some tenants who wanted to do a short term lease until they were able to locate a permanent home to purchase. Lots of factors go into the decision.
- Rental Property Investor · Oakland, CA · Member since 2016 · 341 posts · 643 votes9y
Like previous members have stated...location, location, location.
I pay $1300 and rent a room in a 3 bed/1 bath house plus I have 2 roommates paying the same amount! Hurray for Bay Area living!
Definitely can't buy right now with all my neighboring home values at $1M.
- Baltimore, MD · Member since 2014 · 145 posts · 65 votes9y
I paid $3000 per month in rent in Hawaii, because I was only going to be there two years and I didn't think I could recoup my investment. Four years and 10+% price appreciation later, we're thinking we should have bought. Oh well.
Some people just don't want to commit to the time and investment. My generation is not that in to home ownership.
That being said, I'm now a homeowner, and I'm spending money at Lowe's twice a month on small projects here and there. That's in addition to the 5-10 hours a month I spend on fixing minor things, updating things, etc. Sometimes, it's just nice to move into a place and not have to worry. - Residential Real Estate Broker · Beaufort, SC · Member since 2016 · 4 posts · 2 votes9y
Irwin,
Who pay's $1300 per month in rent? The military...that's whom. Here in Beaufort, SC, we have two military bases and a Naval Hospital. Military personal rotate in and out of Beaufort annually, bi-annually and tri-annually. Here at Beaufort Property Management we numerous multi-year lease's at that monthly amount.
Kevin
- Investor · Libertyville, IL · Member since 2015 · 2 posts · 6 votes9y
In my area (northern Chicago suburbs) $1300 will get you a nice but not luxurious one bedroom apartment. My wife and I rent our home even though we could easily afford to buy if we wished. And we pay substantially more than $1300 monthly.
Your question "If you have $1,300 why not buy" implies that you believe that buying is always more desirable and being a tenant is something people only grudgingly do if they can't afford to buy.
Nothing could be further from the truth. While certainly many tenants wish they could buy, many people (myself included) choose consciously to rent. There are many reasons for this but here are some of the main ones:
1. If you move frequently closing costs and agents fees will eat you alive buying and selling.
2. A house of the kind you want in the location you want may be a great place to live but a bad investment.
3. Owning a house entails major risks: high repair costs, drop in value, etc. Renting is risk free. Each month you pay for the use of the property and that's it.
4. Tenants don't have the headaches of ownership. When something breaks they don't have to hunt down a repair person and whip out a checkbook. They just call the landlord.
5. In some (not all!) locations, it costs less to rent than to own. "Owners build equity, tenants build a shoebox full of useless receipts" is a half truth. Mortgage interest + taxes + insurance + repairs - tax deductions +/- appreciation/depreciation = the cost to own. Rent = the cost to rent. One is not always less than the other. You need to do the math on a case by case basis.
6. A purchase ties up capital in the form of down payment plus equity you build. A rental only ties up your (far lower) security deposit. Some people have no capital; others want to use it somewhere else (e.g. a business) or feel that they will get a better return on investment putting their money into something other than their residence.
7. If you experience adversity (disability, loss of job, divorce, etc.) it's way easier to weasel out of a rental than a mortgage. The consequences of breaking a lease are far less than defaulting on a six figure mortgage. The loss of a security deposit is nowhere near as devastating as the loss of the down payment and other amounts you sank into a house or condo.
Hope this makes sense to you.
- New Haven, CT · Member since 2016 · 90 posts · 99 votes9y
I own now, but $1,300 would get me a nice 1 bedroom in the ghetto.
- 9yJana CainPro MemberEnrolled Agent · Richmond, CA · Member since 2016 · 225 posts · 148 votes
@Ed Garrison You make many, many valid points, but I wouldn't go so far as to say renting is "risk free". As a renter, you are beholden to the desires of the property owner. Everything is fine and dandy until you arrive home to find a "notice of intent to sell" on your door. :-) Yes, repairs and maintenance can be hassle free, until you have to gently remind the landlord about the maintenance request you made x days/weeks ago. And then there's the annual rent increase, which can be substantial if you're not living in a rent controlled unit (like when my rent went up $200 after they did some major upgrades throughout the [224 unit] property including a new redwood deck for my unit).
I find the renter/landlord conversations so fascinating on this forum, as they often remind me why I look forward to homeownership. I've been a renter due to not being in sound financial position to own. But as someone who has specific personal tastes, I look forward to not being at the mercy of what the landlord thinks my environment should be (per my lease I can't paint, or change fixtures, or swap out the appliances, and, and, and...).
@Irwin Haddox Bringing it back to the original question, just about everything safe in the Bay Area is over $1300.
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