Delaware City, DE · Member since 2016 · 25 posts · 13 votes
All,
I often see on here landlords that charge around $1,300 for rent but I personally don't know anyone who pays such high rent. If you have $1,300 rent why not buy? I know people usually say that they don't want to settle in the area for long so they don't buy but i'm sure if the deal was good enough then they could sell with instant equity. Also I hear people don't have good credit so they can't buy, but some landlords screen out bad credit tenants. Obviously if they live in NYC I understand but 1,300 buys a lot of house in other areas. So what I want to know is who is paying all this rent after all?
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.
It was reported that Christopher Meloni of Law & Order rented a Beverly Hills home for $20,000/mo (Then it sold for $8M)! But he was able to cover the rent by renting out his own NY 3 bed home for $55k/mo to a Saudi Prince while he was out of town!
There is a rental market at every socio-economic level.
For many it's a matter of not having to worry about maintenance. Some people simply do not want to own a house. Some will even knowingly pay more rent than they would for mortgage to avoid the hassle of maintenance.
Another big one is down payment. Many people can afford their everyday bills but need to rent for a few years to save up that big down payment.
I'm currently renting in the Bay Area, Ca until I get orders to my next base...I pay $2,115 for a 2/2 1100 sq/ft apartment. I'm not going to lie, I get nauseous a little every time the 1st rolls around.
I would say my tenants have rented mainly to remain "fluid." Their desire to rent temporarily has been for several different reasons including waiting on a suitable home to purchase, until their children finish school in a certain neighborhood, they don't want the bother of repairs, or as a separated parent to stay in the same vicinity as the ex for the kids' sake before setting roots in a more desirable area. Our market in Ontario is no where near where many of you rent. A good home can be rented for $800 plus, upwards to $2000/month for waterfront. I can't imagine paying more but I guess it's all relative to employment in different regions.
Rhonda, keep in mind that your numbers don't represent Ontario, they represent Sarnia. I'm renting out a B townhouse (very nicely finished) for $1200 in London and that is chump change compared to what the same place would fetch in Toronto. I knew a girl ten years ago renting a 2-bed apartment in a downtown London building for $1600/mo.
My renter made it very clear to me why they rent. It isn't income because she makes as much as me. When I screened her she had enough in the bank to put a deposit on the house. She just doesn't want to own a house. She pointed that out one day when I was soldering new taps on the laundry water supply due to a leak. She likes that she can just call and the problem goes away. She's also 100% liquid - two months notice and move (if you're reading this, please don't, you're the best tenants ever).
Hey fellow Canuck! Thank you for the correction...certainly not representative of Ontario as a whole, simply my area.
That's actually very low, I used to pay that for a studio here in Orange County, CA but then again california has arguably the highest cost of living in the country. That being said it is absolute to be above the $1300 price point in many markets. Every market is different so don't assume, always look at the facts(numbers)
In my area in CT, a typical 2/1 rental will easily be $1100-$1500 and houses will rent for $1500-$2200, so I'll take this question as why are people renting for more than what it would cost to own. I agree with all the above. A couple things not mentioned:
Divorcees - often these are people who have ruined their credit in the process and at least 50% of the parties involved will need a new residence.
Immigrants - Lots of high income earners move into the states for jobs and can't buy right away and don't know how they will like the area or how long they will stay.
Currently I'm paying $1600 for rent, and this is one of the best deals I've had on rent in a long, long time. This is for a four-bedroom house; in the past I was paying $1775 for a 700-square foot apartment. (We will be closing on our first home next week, though, if all goes well...and our mortgage will be $2200, by the way.)
Rents depend entirely on your location. And whether a person can buy a home yet or not depends on a wide variety of factors, including savings (it's HARD to save up enough money to buy if you live in a high-rent area, and if you can't leave that area because your job is there...well...what should you do?), credit score, employment history, debt to income ratio, etc.
Your residential propery is not an asset, which is the biggest lie, it's a liability! I agree with uncle G Grant Cardone!
I live in an owner occupied duplex, totally understand why some people shouldn't and don't want to own residential property, mobility, flexibility, don't have to deal with mortgage, n tax, insurance, maintenance expenses and so on ...
Go to college, get a job, buy a house, save 401k, retire after working in corporate for 40 years... Lies, lies, lies... Work towards your financial freedom baby!
I asked the same question when I started out. In rural areas or secondary markets this is a very real issue. The median home in my area would have a PITI of less than the median house rent. I lose tenants to home ownership all the time. What keeps some of them from owning is their debt to income ratio. They might have good credit because they're making the minimum payments, but can't get a loan due to the expensive new truck payments, credit card, or student loan debt they have.
I decided to focus on multiunits that spread out my vacancy risks and units that rent for lower than a house payment so that I can meet the needs of low income working people. Fast food workers and call center operators have to live somewhere too!
Like @Rob Lane, most of my properties in Tulsa range from $1300 and up. I have several dozen houses in the suburbs of Tulsa and I think my average is closer to $1,600/mo with $2,300 on the high end. I don't offer all the other amenities, but my belief is that with lending requirements more difficult today than 10 years ago coupled with higher rates in major events that impact one's credit (including divorces, medical debt, student debt, job losses, foreclosures/short sales, etc), it only makes it harder. I also have a lot of tenants doing shorter term job relocations (traveling nurses, department managers, etc that are on rotations for several years at a time).
@Monica Marusic DMV pricing is insane. DC area counties has the highest median incomes, 3 of which Loudon, Fairfax, and Arlington—all in Northern Virginia—are the only counties in the USA where median incomes exceed $100,000 per year (as of 2014)! Must be the concentration of Federal employee/contractor population and extremely high median income that pushes rent prices so high. Perhaps the new change in politics will lead to a cut in federal spending (and area federal jobs) which could lead to shrinkage in supply of renters in the area. Not that I want people to miss out on jobs but... realistic pricing wouldn't hurt.
Go to college, get a job, buy a house, save 401k, retire after working in corporate for 40 years... Lies, lies, lies... Work towards your financial freedom baby!
I know what you are thinking. You drank the Kool-aid. But, It. Won't. Make. You. Happy. ;)
In Atlanta rent for $1,300 is not far fetched. We see rents going from $750-$1400 regularly.
Anton, I have an Atlanta question for you. Some listing agents are telling me Sec 8 will pay $850-900 of the rent and the tenant pays additionally-- up to $1200-1300 or more in not so great areas. Is this a bunch of nonsense, or have you seen this?
In Atlanta rent for $1,300 is not far fetched. We see rents going from $750-$1400 regularly.
Anton, I have an Atlanta question for you. Some listing agents are telling me Sec 8 will pay $850-900 of the rent and the tenant pays additionally-- up to $1200-1300 or more in not so great areas. Is this a bunch of nonsense, or have you seen this?
thanks in advance,
p
So its not far fetched. Section 8 you generally get 850 and non section 8 depending on area you can get all the way up to $1450. Some really nice areas over $2000. Of course that renter pool is much lower but it does happen
I scour the MLS for buy and holds, and I usually go thru the list agent initially because I have certain questions I like to ask. I have come up against some list agents who are too busy or can't be bothered to show their listings that do not have a contractors lockbox.
I am looking for an agent to show just a couple of props/week average and make a commission. If interested, PM me.
Full disclosure: am a licensed VA Broker and would look for a a 25% referral fee back to myself.
In Seattle there is such a lack of inventory that even if you have 20% down and a good credit rating you aren't going to find a house to buy so you end up renting. A few years ago I had bought a house but couldn't stand my neighbors and just really had to move. There wasn't anything on the market, it was a lot cheaper back then but there just wasn't much to choose from. So, after months of looking we bought a duplex figuring we could at least live there until we found something. We had friends who were renting a house but one of their roommates moved and it was too expensive for them ($2000) so they took our unit of the Duplex ($1300) and we moved into the rental house while we tried to find a SFR for us to move into. We were essentially breaking even for those nine months.
I have a friend who got divorced and rents out her house (2bd./1ba.) in Seattle for $2000/mo. and rents a studio apartment for herself for $1300. The problem here is lack of inventory and a lot of people with $. Sure, you can sell your place for a small fortune but where do you go after? I have two friends/clients in this situation. One of them sold her townhouse in Fremont after her co-owner wanted out and she thought she could get something smaller and have $ leftover; we put in at least 25 offers (20%+ down, 800 credit score, government employee, most offers were 10% over asking). over a 12 month period, didn't win any of them. She finally decided to take a break and just keep living with her boyfriend; in a rental. The other house was in Ballard and she could have sold for a pretty good profit (bought as a foreclosure in 2010) but she still felt like she would've needed to make an extra 10-20% profit in order to be able to move.
Currently, I'm getting $1500 for an 1100sf unit and $850 for a 900sf unit. They pay all their own utilities and each unit has 2 parking spots, storage and a yard. I could probably get 15 -20% more but all the tenants are friends and I don't have to worry about anything; they maintain the yard, try to fix things themselves before having to call a repairman, heck, they even took out the old carpet and laid new laminate flooring, I just paid for materials, dump fees and made them a lasagna! I was lucky and bought it in 2013 and the rents cover my mortgage and general upkeep whilst the value has gone up almost 50%. The good, the bad and the ugly of the Seattle market!
I often see on here landlords that charge around $1,300 for rent but I personally don't know anyone who pays such high rent. If you have $1,300 rent why not buy? I know people usually say that they don't want to settle in the area for long so they don't buy but i'm sure if the deal was good enough then they could sell with instant equity. Also I hear people don't have good credit so they can't buy, but some landlords screen out bad credit tenants. Obviously if they live in NYC I understand but 1,300 buys a lot of house in other areas. So what I want to know is who is paying all this rent after all?
-Irwin
uh, where.... maybe in depressed areas. Any area with jobs, $1,300 is low. However, rent does not mean anything.. home price/rent ratio is what determines if a person can buy a home.
I have tenants paying $1400 a month. Their credit is bad, they live paycheck to paycheck and it is unlikely that they will ever be able to save up a down payment or qualify for a mortgage. I'm sure you're probably wondering why I would rent to them if their credit is bad, but they make rent a priority over every other bill they have.
The plus side for me is that since their credit is bad, they are less likely to leave because it will be more difficult for them to find another place. There's a good chance they'll still be there 5 years from now.
I have taken my chances on some people with pretty bad credit and so far it has worked out for me due to low turn-over rates. I'm not recommending renting to people if their credit is bad because it is risky, but sometimes it works out. I think a lot of people who are paying a lot for rent are in situations similar to my tenants. They make decent money but aren't great at saving and don't have good enough credit to get a mortgage