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It's all well and fine to invest the house payment in the stock market because you aren't paying a mortgage, but you have to live somewhere and your rent payment is most likely to be higher than your mortgage payment apples to apples. Rent takes care of what you think you might save by not having a mortgage.
Unless you are living with rent control, the rent keeps going higher and higher while the mortgage remains the same, for all 20-30 years of it.
And sorry, but when you are renting, you are paying the taxes, the water bills, and for the maintenance and repairs. It's all baked into the rent. You aren't getting all that stuff for free.
If you prefer renting to owning, that's fine. it's your choice, but you don't seem to have a complete grasp about living expenses.
Well, for starters - mortgage is not "staying the same". I mean a bigger part of it is, but the taxes go up, the utilities go up, the cost of repairs and maintenance goes up.
And all I have to say, do your math and if you are not set to live in the same neighborhood for next 20-30 years, but are likely to move somewhere else in 5-7 years, then do you really want to have a nice overhead of downpayment and other closing costs when you initially buy your house and then real estate commission fee when you sell it?
I personally own 3 houses and don't plan to sell any. But it's because I live in the area where price on the houses did not go through the roof. All I wanted to say is "do your math".
BTW, I bought my first house in 2005 and sold it in 2007 (lucky, huh, just a few months before the crash). I lost on it about $30K and spent another 5 years paying the debt off.
There are a quarter million new residents being added to the USA every month, most if them very low income, so there is huge demand for rentals on the low end of the price scale.
Quote:
Originally Posted by oregonwoodsmoke
We are not talking about the birth rate.
But if you want to talk birth rate, then another 300,000 or so lives are added to population every month. Those are too young to be add to the demand for rental housing for a few years yet.
Where are you getting your data? The US population grew less than a quarter of 1% over the past few years.
So true. I think many people do not understand this. A renter literally pays everything - taxes, repairs, maintenance and the mortgage.
Yes, I absolutely agree. Because this is the case, I would say that the tenant, for want of a better description, is what "feeds" everyone who makes money off of the property including the landlord and his/her contractors. Without the tenant being in the rental property, no one makes any money on the property. The tenant is the basis for all of this.
This leads me to the question as to why good tenants are not highly valued by landlords and tradesmen who perform the maintenance on rental properties. What I have seen time and time again is that landlords do not place much value on tenants, even very good tenants. They seem more concerned about their contractors than they do their tenants. Why is that?
Yes, I absolutely agree. Because this is the case, I would say that the tenant, for want of a better description, is what "feeds" everyone who makes money off of the property including the landlord and his/her contractors. Without the tenant being in the rental property, no one makes any money on the property. The tenant is the basis for all of this.
This leads me to the question as to why good tenants are not highly valued by landlords and tradesmen who perform the maintenance on rental properties. What I have seen time and time again is that landlords do not place much value on tenants, even very good tenants. They seem more concerned about their contractors than they do their tenants. Why is that?
Well since I work in the hotel industry, the mantra is a body in the bed. So long as someone is funding it, who cares!
Trust that the titled owner is vetting , yet based on reality. They are only getting... Who's gonna pay all my tax, mortgage ,repairs. The ' silent' investor funneling it to the owner...legally at that.
Been both a landlord and a tenant. I was though personable and cognizant of my tenants . Being appreciative of how hard they had to work while I tended to the legal side of following the tenant /landlord dynamic.
With the recent slow down of the inflated real.estate market... Some of our developers have brought the homes value down 15-20%... To move the inventory. Cuz I think the average buyer started seeing the hyped and inflated values as a money grab. Our slum area even got in on the uptick in price. These buildings were at 45k with liens ... Then suddenly moved up to 80k with liens.... What a joke.
My projection is folks will either be gullible in this real estate market or choose alternatives in residency. I'm sometimes half tempted to buy an RV and call it a day.
So true. I think many people do not understand this. A renter literally pays everything - taxes, repairs, maintenance and the mortgage.
So wrong, I’m afraid. Where I have a house, the Zillow suggested rent is not cheap but it is 0.35% of the house price. It would pay about 80% of the mortgage itself (based on owner having put 20% down). It would NOT cover the taxes or insurance at all. And repairs? Not a penny. The only way an owner could make money renting it out is if the value of the house goes up a lot. When that happens, the owner might have a profit but first he needs to sell the house with 6% to the realtor, capital gains tax, and return of some of a mandatory depreciation deduction.
Read the IRS rules, then calculate how much real profit there is, unless it’s a highly desirable area or so bad that the house was purchased dirt cheap.
So wrong, I’m afraid. Where I have a house, the Zillow suggested rent is not cheap but it is 0.35% of the house price. It would pay about 80% of the mortgage itself (based on owner having put 20% down). It would NOT cover the taxes or insurance at all. And repairs? Not a penny. The only way an owner could make money renting it out is if the value of the house goes up a lot. When that happens, the owner might have a profit but first he needs to sell the house with 6% to the realtor, capital gains tax, and return of some of a mandatory depreciation deduction.
Read the IRS rules, then calculate how much real profit there is, unless it’s a highly desirable area or so bad that the house was purchased dirt cheap.
My renter pays $2,300 a month, 10% of which goes directly to a property manager. My mortgage and monthly association fees (and property manager fees) bring my monthly total expenses to over $3,000. Taxes are included, too, but Hawaii has some of the lowest property taxes in the country, so I only pay $1,400-$1,500 a year in property taxes. The tenant definitely subsidizes the cost of ownership so to speak, but there is still a decent chunk that I cover out of pocket.
My renter pays $2,300 a month, 10% of which goes directly to a property manager. My mortgage and monthly association fees (and property manager fees) bring my monthly total expenses to over $3,000. Taxes are included, too, but Hawaii has some of the lowest property taxes in the country, so I only pay $1,400-$1,500 a year in property taxes. The tenant definitely subsidizes the cost of ownership so to speak, but there is still a decent chunk that I cover out of pocket.
Well, if you are losing money on this rental property, why not sell it?
Yes, I absolutely agree. Because this is the case, I would say that the tenant, for want of a better description, is what "feeds" everyone who makes money off of the property including the landlord and his/her contractors. Without the tenant being in the rental property, no one makes any money on the property. The tenant is the basis for all of this.
This leads me to the question as to why good tenants are not highly valued by landlords and tradesmen who perform the maintenance on rental properties. What I have seen time and time again is that landlords do not place much value on tenants, even very good tenants. They seem more concerned about their contractors than they do their tenants. Why is that?
I value good renters but in the Phx metro rents have jumped quite a bit over the past two years. An $1800 a month home is now $2400 or $2500. An extra $7000 grand helps cover the cost of renovations.
I won't lose a good renters over a couple of hundred dollars but $600-$700... they've got to go. It's no use asking them for more money because I know they can't afford it. So, I give them a 90 days notice to vacate which I can do in AZ.
The Phx metro is one of the fastest growing metros in the country. I have no problem finding good renters and I usually market my property $100 under market rate so I can attract a lot of interest.
My renter pays $2,300 a month, 10% of which goes directly to a property manager. My mortgage and monthly association fees (and property manager fees) bring my monthly total expenses to over $3,000. Taxes are included, too, but Hawaii has some of the lowest property taxes in the country, so I only pay $1,400-$1,500 a year in property taxes. The tenant definitely subsidizes the cost of ownership so to speak, but there is still a decent chunk that I cover out of pocket.
Are you planning to live in the property at some point in the future? Do you feel it has room for additional appreciation?
If no, why do you keep it?
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