Overheard at Work

[starbuck]

Whomever posted the low-end Sears white fridge link? Yep, that's my fridge.

Mine too!

[jwilliams0215]

Co-worker just mentioned his wife purchased a $1,100+ purse while they were in Europe!! WTF?!

[dycker1978]

Co-worker just mentioned his wife purchased a $1,100+ purse while they were in Europe!! WTF?!

There is no way she need that... there is nothing to put in it.

[klystomane]

Co-worker just mentioned his wife purchased a $1,100+ purse while they were in Europe!! WTF?!

I don't get it...is he gloating?

If he is, in the world of purses, $1,100 isn't much....

[jwilliams0215]

We both had went to Europe around the same timeframe. He was curious to the total cost comparison.

He tried to exclude the $1,100 purse spend from his total. We spent $2K less, in our two weeks in Italy vs. his one week in Paris and Amsterdam, and that excludes the purse lol. They're both "good people", just have grown up with higher income parents in their families and a spending aptitude! 

No rationalization or gloating, it was just an another main expense of their trip.

[Sibley]

He's not going to rent to her. She had absolutely no idea why.

To be fair child support could be a lot of money.

I don't know the age of her kids, but so can daycare.

They way he told me, she really didn't have her finances together and was too ignorant to realize it.

This landlord is considering writing a book with all the stories accumulated over a decade plus.  I've often had tenants fill out an application, and their gross monthly income barely covers the rent.  So I ask, "how will you eat?"  Most common response is that a parent is subsidizing them.

I've had prospective tenants show up early and interrupt a meeting w/another prospective tenant b/c they were busy, ones who didn't want to pay the fees to run a credit check, and ones who asked what would happen if they changed their mind about moving in after handing over the non-refundable deposit.  All were denied tenancy, and all were upset and didn't understand why.  So many people don't look at it for what it is - a job interview.  If they aren't on their best behavior now, I can only imagine what a hassle they will be once they are settled in and their real personalities show!

I am grateful to those people for showing their true colors early - makes it easy to weed out w/confidence..

I agree! My parents have a rental, they're looking for a tenant right now. One woman came to see it, and was the classic stereotypical "pushy broad". Was in the wrong side of the basement and wouldn't leave, etc. Horribly rude person.

[mtn]

He's not going to rent to her. She had absolutely no idea why.

To be fair child support could be a lot of money.

I don't know the age of her kids, but so can daycare.

They way he told me, she really didn't have her finances together and was too ignorant to realize it.

This landlord is considering writing a book with all the stories accumulated over a decade plus.  I've often had tenants fill out an application, and their gross monthly income barely covers the rent.  So I ask, "how will you eat?"  Most common response is that a parent is subsidizing them.

I've had prospective tenants show up early and interrupt a meeting w/another prospective tenant b/c they were busy, ones who didn't want to pay the fees to run a credit check, and ones who asked what would happen if they changed their mind about moving in after handing over the non-refundable deposit.  All were denied tenancy, and all were upset and didn't understand why.  So many people don't look at it for what it is - a job interview.  If they aren't on their best behavior now, I can only imagine what a hassle they will be once they are settled in and their real personalities show!

I am grateful to those people for showing their true colors early - makes it easy to weed out w/confidence..

I'm curious on the credit check charge. I'd have a slight problem paying it--it is in your interest as the landlord to make sure that I will pay. I know I will pay, I have always paid (albiet a few times a few days late, but that has been due to me and my landlord not meeting up--we live next door). You don't know that. YOU should pay for this, not me.

I would be ok with a "We'll knock it off the first months rent if you sign after a clean check". It probably wouldn't stop me if it was by far the best or only option, but it would still honk me off.

[dividendman]

I'm curious on the credit check charge. I'd have a slight problem paying it--it is in your interest as the landlord to make sure that I will pay. I know I will pay, I have always paid (albiet a few times a few days late, but that has been due to me and my landlord not meeting up--we live next door). You don't know that. YOU should pay for this, not me.

I would be ok with a "We'll knock it off the first months rent if you sign after a clean check". It probably wouldn't stop me if it was by far the best or only option, but it would still honk me off.

I don't pay it either and have never had a problem getting a place to rent. I just bring my up to date credit report with me, as well as pay stubs, and proof of some cash. All of the landlords are always amazed i have all of the stuff on me when I'm looking. I'm also a no hassle tenant, I haven't talked to my landlord once and I've been living in the same place for almost 3 years now! I think he/she is also giving me a break on the rent increases due to this since I live in silicon valley but my rent is only going up a couple % per year.

[Sibley]

I'm curious on the credit check charge. I'd have a slight problem paying it--it is in your interest as the landlord to make sure that I will pay. I know I will pay, I have always paid (albiet a few times a few days late, but that has been due to me and my landlord not meeting up--we live next door). You don't know that. YOU should pay for this, not me.

I would be ok with a "We'll knock it off the first months rent if you sign after a clean check". It probably wouldn't stop me if it was by far the best or only option, but it would still honk me off.

As in, you think the landlord should pay for it? Well, if you have no skin in the game, then it doesn't hurt you to apply to multiple places you have no intentions of renting. You're just hurting the landlord. How is that fair? You're the one who wants to live on their property.

My parents split it the cost of the (legally required) background check.

[mtn]

I'm curious on the credit check charge. I'd have a slight problem paying it--it is in your interest as the landlord to make sure that I will pay. I know I will pay, I have always paid (albiet a few times a few days late, but that has been due to me and my landlord not meeting up--we live next door). You don't know that. YOU should pay for this, not me.

I would be ok with a "We'll knock it off the first months rent if you sign after a clean check". It probably wouldn't stop me if it was by far the best or only option, but it would still honk me off.

As in, you think the landlord should pay for it? Well, if you have no skin in the game, then it doesn't hurt you to apply to multiple places you have no intentions of renting. You're just hurting the landlord. How is that fair? You're the one who wants to live on their property.

My parents split it the cost of the (legally required) background check.

Like I said, I'm ok with it if it is refunded after signing. But my view is that it should be built into the rent. It is a cost of landlording.

[maco]

He's not going to rent to her. She had absolutely no idea why.

To be fair child support could be a lot of money.

I don't know the age of her kids, but so can daycare.

They way he told me, she really didn't have her finances together and was too ignorant to realize it.

This landlord is considering writing a book with all the stories accumulated over a decade plus.  I've often had tenants fill out an application, and their gross monthly income barely covers the rent.  So I ask, "how will you eat?"  Most common response is that a parent is subsidizing them.

I've had prospective tenants show up early and interrupt a meeting w/another prospective tenant b/c they were busy, ones who didn't want to pay the fees to run a credit check, and ones who asked what would happen if they changed their mind about moving in after handing over the non-refundable deposit.  All were denied tenancy, and all were upset and didn't understand why.  So many people don't look at it for what it is - a job interview.  If they aren't on their best behavior now, I can only imagine what a hassle they will be once they are settled in and their real personalities show!

I am grateful to those people for showing their true colors early - makes it easy to weed out w/confidence..

I'm curious on the credit check charge. I'd have a slight problem paying it--it is in your interest as the landlord to make sure that I will pay. I know I will pay, I have always paid (albiet a few times a few days late, but that has been due to me and my landlord not meeting up--we live next door). You don't know that. YOU should pay for this, not me.

I would be ok with a "We'll knock it off the first months rent if you sign after a clean check". It probably wouldn't stop me if it was by far the best or only option, but it would still honk me off.

I think in the past the credit check charge has been knocked off my first month's rent.

[Beaker]

He's not going to rent to her. She had absolutely no idea why.

To be fair child support could be a lot of money.

I don't know the age of her kids, but so can daycare.

They way he told me, she really didn't have her finances together and was too ignorant to realize it.

This landlord is considering writing a book with all the stories accumulated over a decade plus.  I've often had tenants fill out an application, and their gross monthly income barely covers the rent.  So I ask, "how will you eat?"  Most common response is that a parent is subsidizing them.

I've had prospective tenants show up early and interrupt a meeting w/another prospective tenant b/c they were busy, ones who didn't want to pay the fees to run a credit check, and ones who asked what would happen if they changed their mind about moving in after handing over the non-refundable deposit.  All were denied tenancy, and all were upset and didn't understand why.  So many people don't look at it for what it is - a job interview.  If they aren't on their best behavior now, I can only imagine what a hassle they will be once they are settled in and their real personalities show!

I am grateful to those people for showing their true colors early - makes it easy to weed out w/confidence..

I'm curious on the credit check charge. I'd have a slight problem paying it--it is in your interest as the landlord to make sure that I will pay. I know I will pay, I have always paid (albiet a few times a few days late, but that has been due to me and my landlord not meeting up--we live next door). You don't know that. YOU should pay for this, not me.

I would be ok with a "We'll knock it off the first months rent if you sign after a clean check". It probably wouldn't stop me if it was by far the best or only option, but it would still honk me off.

I think in the past the credit check charge has been knocked off my first month's rent.

Thing that amazes me is people who pay for the credit check even though they have horrible credit. I tell people up front what the requirements are: no bankruptcies, no delinquencies, etc, and if you fail it I'm not refunding the fee. Yet I've had people go ahead with the check even though they have debts in collections, they're 6 months behind on tens of thousands of payments, even have debt payments totaling more than their monthly income. It just blows my mind - total waste of their money and my time.

[mm1970]

I'm curious on the credit check charge. I'd have a slight problem paying it--it is in your interest as the landlord to make sure that I will pay. I know I will pay, I have always paid (albiet a few times a few days late, but that has been due to me and my landlord not meeting up--we live next door). You don't know that. YOU should pay for this, not me.

I would be ok with a "We'll knock it off the first months rent if you sign after a clean check". It probably wouldn't stop me if it was by far the best or only option, but it would still honk me off.

As in, you think the landlord should pay for it? Well, if you have no skin in the game, then it doesn't hurt you to apply to multiple places you have no intentions of renting. You're just hurting the landlord. How is that fair? You're the one who wants to live on their property.

My parents split it the cost of the (legally required) background check.

Like I said, I'm ok with it if it is refunded after signing. But my view is that it should be built into the rent. It is a cost of landlording.

I think it REALLY depends on the market.  I live in a very expensive rental market.  When we last rented (moved out of student housing), we looked at 3 or 4 of 2BR places, applied to one that we really liked.  There was another one that we liked that was kind of a back-up.  Well, the back-up place called US.  The first place ended up giving the duplex to the first applicant that passed the credit check.  The second place took our application, but we hadn't paid for the credit check.  Apparently she was not impressed with the remaining applicants and gave it to us.  (We hadn't applied because we were waiting on the first one.)

Well, nowadays the rental market is super tight.  Very hard to find a place, impossible if you have pets.  Landlords can be very picky.  You don't want to pay for a credit check?  Someone else will.  Case in point, there was an ad today on our local page of someone looking for a 3BR or 4BR for $2200/mo or 2500/mo.  She's been renting a 3BR at 1800 and a 4BR at $2400, but the house is being sold.  She also noted that she's been in her rentals for 7-8 years, and the rents have not increased.

Well, a 3BR is at least $3000/month, generally more.  There are many people willing to pay that. So landlords can require a credit check (that you pay for), can say "no pets", can limit the # of people living there (there are 650 sf studio apartments for rent that landlords say "1 person only", because they can).  Also: no Section 8, no smoking, etc. etc.

[skunkfunk]

Well, a 3BR is at least $3000/month, generally more.  There are many people willing to pay that. So landlords can require a credit check (that you pay for), can say "no pets", can limit the # of people living there (there are 650 sf studio apartments for rent that landlords say "1 person only", because they can).  Also: no Section 8, no smoking, etc. etc.

What do these places cost to buy?

You could build a nice 3BR out here for $150k including the lot. I'm wondering if these landlords are even making money, what's the capital involved here? Are renovations more expensive there as well?

[Linette]

For an outsider like me, how much does a credit check cost?

[Beaker]

For an outsider like me, how much does a credit check cost?

The outfit I use costs $25 for credit, background (ie, criminal) and rental history. I think that's about average - there are some that cost more and some that cost less.

A person can request their own credit check for free and just give a copy to the landlord. I used to offer that as an option, but nobody ever took me up on it so I stopped bothering.

[401Killer]

Overheard that someone's 19 year old nephew picked up a new car that was stickered somewhere in the $28,000 range. The terms was a 72 month loan at 25% interest and no money down. His payments are WELL over $700/month and will end up paying about $58,000.

I didn't even know that this kind of thing was possible.

[mtn]

Overheard that someone's 19 year old nephew picked up a new car that was stickered somewhere in the $28,000 range. The terms was a 72 month loan at 25% interest and no money down. His payments are WELL over $700/month and will end up paying about $58,000.

I didn't even know that this kind of thing was possible.

This sounds like predatory lending to me...

[stevedoug]

Nice watch. Very cool. I'll pass, though! I'll enjoy looking from afar. I am (unlike some here) glad that some people have the money to fund ... well, functional art.

on the topic of Frugality, many of these super high end watches, if purchased correctly will not lose value, and may even gain value over a period of 10+ years. That makes the operating cost (and unrealized losses) lower than other watches.

I know some (wealthy) who have watches insured and part of their investment portfolio (that you can wear)
Maybe we should start making VFINX watches that show current value at all times to wear around and show off our stache's?

That being said I daily wear a cloth band SEIKO.

[RWD]

Nice watch. Very cool. I'll pass, though! I'll enjoy looking from afar. I am (unlike some here) glad that some people have the money to fund ... well, functional art.

on the topic of Frugality, many of these super high end watches, if purchased correctly will not lose value, and may even gain value over a period of 10+ years. That makes the operating cost (and unrealized losses) lower than other watches.

I know some (wealthy) who have watches insured and part of their investment portfolio (that you can wear)
Maybe we should start making VFINX watches that show current value at all times to wear around and show off our stache's?

That being said I daily wear a cloth band SEIKO.

A $10k watch that does not lose value (let's say it tracks with inflation) is still going to be significantly more expensive than buying a new $50 watch every year. You could invest the $10k instead and beat inflation. In addition, if you're planning on wearing it you'll have to insure it against possible theft or damage or risk losing your "investment". I imagine it would cost some money to keep it maintained as well.

I'd venture to guess that picking a watch that will appreciate in value enough to make it a good investment is sort of like being able to pick an individual successful stock. Though I'm certainly no expert on watches, as I haven't worn one since I was in high school.

[gimp]

Doesn't help that probably every luxury watchmaker has multiple "limited edition" releases every year, all of which "might" appreciate in value because of their "rarity."

I probably would not consider as an investment anything that has no real value and no real use, whose only value comes from money other people might be willing to pay, because of the perceived value or rarity. Also one of the reasons I don't like gold as a form of / alternative to currency: it has no value beyond tradition, and its uses as decoration or in industrial / electronic / scientific applications. When times are tough, people trade gold family heirlooms for a day's worth of food or sturdy shoes.

And I mean, same goes for any art. Once bought, it's bought. Keep it. If you rely on its value as an investment... meh. As long as society prospers, you will probably do okay, but I admit to a little bit of schadenfreude watching people firesell art during economic downturns.

/offtopic

[dragoncar]

I'm curious on the credit check charge. I'd have a slight problem paying it--it is in your interest as the landlord to make sure that I will pay. I know I will pay, I have always paid (albiet a few times a few days late, but that has been due to me and my landlord not meeting up--we live next door). You don't know that. YOU should pay for this, not me.

I would be ok with a "We'll knock it off the first months rent if you sign after a clean check". It probably wouldn't stop me if it was by far the best or only option, but it would still honk me off.

As in, you think the landlord should pay for it? Well, if you have no skin in the game, then it doesn't hurt you to apply to multiple places you have no intentions of renting. You're just hurting the landlord. How is that fair? You're the one who wants to live on their property.

My parents split it the cost of the (legally required) background check.

No skin in the game?  I'm sitting there ready to sign the lease.  Happy to put down a deposit.  Hold up is on your end, bro.  U Mad?

Seriously, I don't pay it either.  No application fee.  Because there's absolutely nothing stopping a sleezy landlord from just collecting application fees all day and not renting the apartment to anyone.

[Tallgirl1204]

I'm curious on the credit check charge. I'd have a slight problem paying it--it is in your interest as the landlord to make sure that I will pay. I know I will pay, I have always paid (albiet a few times a few days late, but that has been due to me and my landlord not meeting up--we live next door). You don't know that. YOU should pay for this, not me.

I would be ok with a "We'll knock it off the first months rent if you sign after a clean check". It probably wouldn't stop me if it was by far the best or only option, but it would still honk me off.

As in, you think the landlord should pay for it? Well, if you have no skin in the game, then it doesn't hurt you to apply to multiple places you have no intentions of renting. You're just hurting the landlord. How is that fair? You're the one who wants to live on their property.

My parents split it the cost of the (legally required) background check.

No skin in the game?  I'm sitting there ready to sign the lease.  Happy to put down a deposit.  Hold up is on your end, bro.  U Mad?

Seriously, I don't pay it either.  No application fee.  Because there's absolutely nothing stopping a sleezy landlord from just collecting application fees all day and not renting the apartment to anyone.

We rent out two units-- one is a house, one a small studio apartment.  We run credit checks on each, and ask the applicant to pay for it-- we don't take more than one application at a time, so there's no way we're racking up any kind of profit on the effort, especially since it costs us $25 to have the credit check run.  Our best renters have shown up with pay stubs, references and even resumes in hand.   

We rent at about 10% below market so that we can be choosy (and $25 is way less than 10% of even one month's rent)-- so far we have ended up with excellent tenants, and our tenants know they're getting a great deal-- everyone is happy.  But if someone balks at paying $25 for a credit check, wants a break on the deposit, argues about the deal or is otherwise rude or unpleasant, we politely move on to other applicants. 

It may be mustachian to save $25, but there are times when demonstrating your ability to spend $25 without a fuss is a huge selling point.  If I don't know you, I don't know if you're frugal or maybe you can't afford $25 on short notice, and if you can't afford that, I can't afford to rent to you. 

[tofuchampion]

I bought a protein shake at the employee fitness center the other day, using my ID badge to pay for it, so it comes out of my paycheck. The guy behind the counter tried to tell me that those deductions are pre-tax, and didn't understand when I explained that they aren't. Someone else overheard and agreed with the first guy...

[LennStar]

It may be mustachian to save $25, but there are times when demonstrating your ability to spend $25 without a fuss is a huge selling point.  If I don't know you, I don't know if you're frugal or maybe you can't afford $25 on short notice, and if you can't afford that, I can't afford to rent to you.

YOU want a tenant. YOU want a credit check. Why shoudl anybody else then YOU pay for things YOU want?

If a landlord balks at paying $25 for a credit check, wants a up-front payment, argues about the deal or is otherwise rude or unpleasant, I would politely move on to other applicants. 

[Tallgirl1204]

It may be mustachian to save $25, but there are times when demonstrating your ability to spend $25 without a fuss is a huge selling point.  If I don't know you, I don't know if you're frugal or maybe you can't afford $25 on short notice, and if you can't afford that, I can't afford to rent to you.

YOU want a tenant. YOU want a credit check. Why shoudl anybody else then YOU pay for things YOU want?

If a landlord balks at paying $25 for a credit check, wants a up-front payment, argues about the deal or is otherwise rude or unpleasant, I would politely move on to other applicants.

Sounds like we agree: we would not be a good match.  Moving on to someone who is...

[phillyvalue]

Prospective tenant paying for credit check is just one of those societal norms that you deal with, and given its a small amount of money isn't worth worrying about. In the NYC market tenants also pay broker's fees, which is even more insane and a hell of a lot more money. But you just have to incorporate it into the effective cost of the apartment, as a cost of doing business in this market.

If you try to think philosophically about either, it makes little sense that the tenant should pay, but it's the way the market works. If you treat it as anything more than the $25 or whatever cost it is, then you are skewing your own cost-benefit analysis and potentially losing out.

[Mississippi Mudstache]

If you treat it as anything more than the $25 or whatever cost it is, then you are skewing your own cost-benefit analysis and potentially losing out.

I agree. When my wife and I applied for our current rental, we had to pay a $120 application fee - $60 for each adult. Yeah, it sucked, but the market here is tight, and the place was a great value compared to everything else that was available. I don't mind dropping $120 up front for a place that rents $100/month below comparable homes. If we had balked at the application fee, it would have just been rented to the next guy that showed up, and we would have ended up with something less desirable or more expensive.

[Tallgirl1204]

Nudging us back to the topic...  sorta...  my coworker had an intern come in for a 3-month stint.  The intern could NOT understand why he couldn't find anyone to rent a studio apartment to him for three months for $300/month (what he wanted to pay).  He couldn't understand why even a bedroom in a shared house was well over his budget.  Our town isn't super-expensive compared to the coasts, but it is a college town with a tight rental market, and bedrooms start at $500. 

"It's not like this where I'm from." 

My coworker, bless him, ended up letting the kid stay in his house for most of the time.  And the intern was otherwise a good kid, just new to the ways of the tight rental market.  Hopefully he will do his research another time-- or maybe he's just good at "working" coworkers. 

[MgoSam]

It may be mustachian to save $25, but there are times when demonstrating your ability to spend $25 without a fuss is a huge selling point.  If I don't know you, I don't know if you're frugal or maybe you can't afford $25 on short notice, and if you can't afford that, I can't afford to rent to you.

YOU want a tenant. YOU want a credit check. Why shoudl anybody else then YOU pay for things YOU want?

If a landlord balks at paying $25 for a credit check, wants a up-front payment, argues about the deal or is otherwise rude or unpleasant, I would politely move on to other applicants.

Sounds like we agree: we would not be a good match.  Moving on to someone who is...

As someone that is looking for a rental property, I can tell you that if is someone says something along the lines of, "YOU want a tenant. You want a credit check," my first thought is, 'thank you for your time, I hope you have a great day.'

[Hunny156]

I have up-front policies and pricing for the application fee.  There are no surprises.  If you don't want to pay the fee, no one is forcing you to, just don't apply and then complain about the fee!  It's more than just a credit report, as I do background checks and have to spend time to check your references and contact your employer to confirm what you said in your application.  You'd be surprised how many people flat out lie, so it's a waste of my time.

However, I did have ONE person show up w/a copy of their credit report, copies of pay stubs, and several reference letters.  In that case, I did waive the fee, since she did all the work for me.  I still made a few calls to confirm, but when someone shows up that prepared, it's usually a foregone conclusion that they are what they appear to be.

[Sibley]

It may be mustachian to save $25, but there are times when demonstrating your ability to spend $25 without a fuss is a huge selling point.  If I don't know you, I don't know if you're frugal or maybe you can't afford $25 on short notice, and if you can't afford that, I can't afford to rent to you.

YOU want a tenant. YOU want a credit check. Why shoudl anybody else then YOU pay for things YOU want?

If a landlord balks at paying $25 for a credit check, wants a up-front payment, argues about the deal or is otherwise rude or unpleasant, I would politely move on to other applicants.

So, should my parents break the law? Because where they are, it is legally required that all applicants for a rental submit to a criminal and credit check. The law also includes that the applicant must bear at least 50% of the cost. So my parents pay for 50% of the cost and the applicant pays 50%. My understanding is that most landlords in the area require the applicant to pay 100%.

The local regulation was put into place for a reason. City council was trying to ensure that the people moving into the area wouldn't immediately turn around and cause trouble (double digit increase in crime among other things), because that's what had been happening for several years and they were trying to address it.  A decent number (at least half based on my parents experience) of the applicants fall into at least one of the following categories: have outstanding arrest warrants, have other criminal background (but no current warrants), are unemployed, are drug addicts, or have multiple delinquencies on their credit.

This is in the Detroit area. Sometimes it's not so simple.

[Tallgirl1204]

However, I did have ONE person show up w/a copy of their credit report, copies of pay stubs, and several reference letters.  In that case, I did waive the fee, since she did all the work for me.  I still made a few calls to confirm, but when someone shows up that prepared, it's usually a foregone conclusion that they are what they appear to be.

Yep, I've done this too.  Another example of luck favoring the prepared. 

[mm1970]

Well, a 3BR is at least $3000/month, generally more.  There are many people willing to pay that. So landlords can require a credit check (that you pay for), can say "no pets", can limit the # of people living there (there are 650 sf studio apartments for rent that landlords say "1 person only", because they can).  Also: no Section 8, no smoking, etc. etc.

What do these places cost to buy?

You could build a nice 3BR out here for $150k including the lot. I'm wondering if these landlords are even making money, what's the capital involved here? Are renovations more expensive there as well?

3 BR houses are running about $900k-ish+.  The super low-end is about $800k.  A 2BR low-end would be $700k.  Renting is still WAY cheaper. 

A lot of folks complain about the slumlords gouging people.  But honestly, if you are a family that bought your house 10 years ago and have to leave town due to job loss and are renting it out?  $3000 will pay the mortgage and property taxes on a 2 BR house.  You'd probably be losing a couple hundred dollars a month.  That's not the case for long time landlords.  Many of them bought decades ago for $200k or less, and their property taxes are $1k to $2k per year (Thank you prop 13!)  Renovations are also pretty expensive, gotta love Coastal So Cal.

I have a friend who has a rental condo (he kept it when he traded up to a house), and he's losing a few hundred a month on it by renting it out.  However, long term he will probably be fine.  I expect it may be 5-10 years before rents catch up to where he will break even.  But he's only in his early 40's.  One might assume, that when he's retired at 65 or 70 and his kids have graduated from HS, that it will be a good part of his retirement plan.

And that's kind of what it is in this town.  To buy a house you need to have high incomes, or inherit money, or if you grew up here - inherit a house.  If you happen to time the market well, then you can maybe even get a rental unit.  I do not begrudge any of the landlords their income, "gouging" or not.  It's a business. Some of them have been raking it in for years, some had years of losing money.  Some of them have to deal with renters trashing their places.  I feel terribly bad for the lower income people who cannot find a place to live - it's awful, and it sucks to think about spending 50% of your income on rent, or commuting an hour, or leaving a town you grew up in.  But I don't have a solution to it.  If we ever left (no plans to), I would rent out my house, and you'd better believe it would be at market rate (~$2800+), which would still be a couple hundred dollars loss a month.

[skunkfunk]

3 BR houses are running about $900k-ish+.  The super low-end is about $800k.  A 2BR low-end would be $700k.  Renting is still WAY cheaper. 

That looks like a terrible investment. Even with a reasonable amount of leverage it's just a garbage return.

[MgoSam]

3 BR houses are running about $900k-ish+.  The super low-end is about $800k.  A 2BR low-end would be $700k.  Renting is still WAY cheaper. 

That looks like a terrible investment. Even with a reasonable amount of leverage it's just a garbage return.

Is this in Silicon Valley? I've read about how insane prices are rising, but with all the jobs and high valuations, it is a seller's market there.

[myhotrs]

SoCal, so maybe Hermosa Beach or something in the OC. I think a lot of LA (including where I live) buying to rent doesnt make sense. I'm paying $2k on a place that would cost 450k to buy (plus a 450/mo HOA). Most rentals were bought years ago and the owners think its better to rent out than sell and make nothing in the bank. My landlord paid something like $150k back in the mid-90's.

[dragoncar]

SoCal, so maybe Hermosa Beach or something in the OC. I think a lot of LA (including where I live) buying to rent doesnt make sense. I'm paying $2k on a place that would cost 450k to buy (plus a 450/mo HOA). Most rentals were bought years ago and the owners think its better to rent out than sell and make nothing in the bank. My landlord paid something like $150k back in the mid-90's.

This is true in much of california as long as you're fine with deferred maintenance.  La lla don't care to install insulation or double paned windows in drafty CA-style homes

[mm1970]

3 BR houses are running about $900k-ish+.  The super low-end is about $800k.  A 2BR low-end would be $700k.  Renting is still WAY cheaper. 

That looks like a terrible investment. Even with a reasonable amount of leverage it's just a garbage return.

Is this in Silicon Valley? I've read about how insane prices are rising, but with all the jobs and high valuations, it is a seller's market there.

Santa Barbara.  Prices aren't as high as SV, but neither are incomes, and the job market isn't that awesome either.

It is a terrible investment.  It's much better to rent.  I did the math once (a few months ago) on how much more we've spent by buying our house vs. renting, and it's not a pretty sight.  But hey, I bought my home to live in, not as an investment.

And I think that's why people rent out their homes. Once you leave and sell, it's terribly hard to come back.  So they hold on.  As far as my friend goes - he's not earning money on his condo, but he is earning money on a 2nd won he bought as a foreclosure.  And he could probably sell them for $400k (the foreclosure) to $600k if necessary.

[Zamboni]

I'll offer another perspective on the potential tenant background checks:

As a fellow tenant in the property (assuming a multi-unit dwelling or complex), those checks are also to protect ME!  I don't want a criminal of any sort living next door to me and my family, thank you very much. When I rented I paid the background check fee without batting an eye because I understand that the other existing tenants in that building are being protected by this, not just the landlord.  Any good tenant should appreciate that their landlord does not rent to known criminals or deadbeats who will trash the place and then be evicted, because the costs associated with crappy tenants ultimately end up being indirectly passed along to other renters.

Thing that amazes me is people who pay for the credit check even though they have horrible credit. I tell people up front what the requirements are: no bankruptcies, no delinquencies, etc, and if you fail it I'm not refunding the fee. Yet I've had people go ahead with the check even though they have debts in collections, they're 6 months behind on tens of thousands of payments, even have debt payments totaling more than their monthly income. It just blows my mind - total waste of their money and my time.

The same happens with criminal background checks in job applications.  Someone I know runs a home visit healthcare company, and he is not going to hire someone with multiple counts of theft to go to homes of his elderly and/or infirm clients. He has an obligation to protect the clients. Yet an alarming number of applicants pay for the background check only to have this kind of history revealed.  Do they think it just won't show up?

[RyanAtTanagra]

Yet an alarming number of applicants pay for the background check only to have this kind of history revealed.  Do they think it just won't show up?

Sometimes yes.  I have a drug possession charge from 10 years ago that was dropped (no conviction), that's not supposed to show up, last time I filled out a rental application/background check form, it showed up for the first time ever (or at least no landlords or employers have mentioned it).  I was able to explain it and still got the apartment, but threw me off when they asked me about it.

[BlueHouse]

YOU want a tenant. YOU want a credit check. Why shoudl anybody else then YOU pay for things YOU want?

If a landlord balks at paying $25 for a credit check, wants a up-front payment, argues about the deal or is otherwise rude or unpleasant, I would politely move on to other applicants.

I felt the same way when I was the prospective tenant and rented from large apartment complexes.  I would not pay it and always have had it waived.  Now as a landlord (I've only ever rented to one person), my agent gave me boilerplate info that I followed.  The application said they would pay and no one balked at it.  It only took 2 before I accepted one of them.  If anyone had balked, I'm sure I would have waived it, but then I would have learned my lesson. 
This will be my last renter (first and last).  As soon as he's ready to move out, I'll put it up for sale.  I just don't have the stomach to be a part-time landlord and my condo is a loser investment property.   

[cavewoman]

I just paid for our credit check fee this week.  I didn't even think of printing off our reports and trying to come in prepared to get it waived!  Next time.  Up until now I just figured it as a cost of seeking a rental.

[jinga nation]

It may be mustachian to save $25, but there are times when demonstrating your ability to spend $25 without a fuss is a huge selling point.  If I don't know you, I don't know if you're frugal or maybe you can't afford $25 on short notice, and if you can't afford that, I can't afford to rent to you.

YOU want a tenant. YOU want a credit check. Why shoudl anybody else then YOU pay for things YOU want?

If a landlord balks at paying $25 for a credit check, wants a up-front payment, argues about the deal or is otherwise rude or unpleasant, I would politely move on to other applicants.

It depends on the market. Tampa Bay is a landlord's market, so renters pay. In 2000, I remember my parents and I (having moved to FL) had our rental application fees waived, there were lots of apartment complexes advertising "No Application Fee, First Month Free, Security Deposit 1/2 Off". I haven't seen that in the last few years. That was a good renter's market with deals.

[dragoncar]

It may be mustachian to save $25, but there are times when demonstrating your ability to spend $25 without a fuss is a huge selling point.  If I don't know you, I don't know if you're frugal or maybe you can't afford $25 on short notice, and if you can't afford that, I can't afford to rent to you.

YOU want a tenant. YOU want a credit check. Why shoudl anybody else then YOU pay for things YOU want?

If a landlord balks at paying $25 for a credit check, wants a up-front payment, argues about the deal or is otherwise rude or unpleasant, I would politely move on to other applicants.

It depends on the market. Tampa Bay is a landlord's market, so renters pay. In 2000, I remember my parents and I (having moved to FL) had our rental application fees waived, there were lots of apartment complexes advertising "No Application Fee, First Month Free, Security Deposit 1/2 Off". I haven't seen that in the last few years. That was a good renter's market with deals.

It obviously depends on the market.  McDonalds could try to charge a $10 application fee to buy a burger, and require all diners to pay $25 for a background check.  But as consumers, we typically expect businesses to handle their own costs of doing business and incorporate it into the final price.  We get mad that Ticketmaster wants to charge us a $5 convenience fee to print our tickets at home, and likewise we get mad when landlords want to charge us $25 to run a credit check that benefits them alone.

[mm1970]

It may be mustachian to save $25, but there are times when demonstrating your ability to spend $25 without a fuss is a huge selling point.  If I don't know you, I don't know if you're frugal or maybe you can't afford $25 on short notice, and if you can't afford that, I can't afford to rent to you.

YOU want a tenant. YOU want a credit check. Why shoudl anybody else then YOU pay for things YOU want?

If a landlord balks at paying $25 for a credit check, wants a up-front payment, argues about the deal or is otherwise rude or unpleasant, I would politely move on to other applicants.

It depends on the market. Tampa Bay is a landlord's market, so renters pay. In 2000, I remember my parents and I (having moved to FL) had our rental application fees waived, there were lots of apartment complexes advertising "No Application Fee, First Month Free, Security Deposit 1/2 Off". I haven't seen that in the last few years. That was a good renter's market with deals.

It obviously depends on the market.  McDonalds could try to charge a $10 application fee to buy a burger, and require all diners to pay $25 for a background check.  But as consumers, we typically expect businesses to handle their own costs of doing business and incorporate it into the final price.  We get mad that Ticketmaster wants to charge us a $5 convenience fee to print our tickets at home, and likewise we get mad when landlords want to charge us $25 to run a credit check that benefits them alone.

It doesn't just benefit them alone though.

One house goes up for rent for $2500 a month.
40 families apply for it.
How do you choose the right family?  Through applications.  How do you ensure they are solvent?  You run a credit check.  You going to pay to run 40 credit checks?  Or 20?  No.

Around here, housing is so tight that if you want the house or apartment, you pay.  If you are going to be picky about it, you aren't going to have a place to live.

[RyanAtTanagra]

We get mad that Ticketmaster wants to charge us a $5 convenience fee to print our tickets at home

Which is why I refuse to buy from ticketmaster.  I'll drive out of my way to go to the box office, or if I can't/don't want to, I'll forgo the show.  The full ticketmaster fee was $2, which included real tickets in the mail, when I started going to concerts.  That wasn't that long ago (I'm only 35).  I hate ticketmaster with a passion.

[jordanread]

I'll offer another perspective on the potential tenant background checks:

As a fellow tenant in the property (assuming a multi-unit dwelling or complex), those checks are also to protect ME!  I don't want a criminal of any sort living next door to me and my family, thank you very much. When I rented I paid the background check fee without batting an eye because I understand that the other existing tenants in that building are being protected by this, not just the landlord.  Any good tenant should appreciate that their landlord does not rent to known criminals or deadbeats who will trash the place and then be evicted, because the costs associated with crappy tenants ultimately end up being indirectly passed along to other renters.

Thing that amazes me is people who pay for the credit check even though they have horrible credit. I tell people up front what the requirements are: no bankruptcies, no delinquencies, etc, and if you fail it I'm not refunding the fee. Yet I've had people go ahead with the check even though they have debts in collections, they're 6 months behind on tens of thousands of payments, even have debt payments totaling more than their monthly income. It just blows my mind - total waste of their money and my time.

The same happens with criminal background checks in job applications.  Someone I know runs a home visit healthcare company, and he is not going to hire someone with multiple counts of theft to go to homes of his elderly and/or infirm clients. He has an obligation to protect the clients. Yet an alarming number of applicants pay for the background check only to have this kind of history revealed.  Do they think it just won't show up?

We get mad that Ticketmaster wants to charge us a $5 convenience fee to print our tickets at home

Which is why I refuse to buy from ticketmaster.  I'll drive out of my way to go to the box office, or if I can't/don't want to, I'll forgo the show.  The full ticketmaster fee was $2, which included real tickets in the mail, when I started going to concerts.  That wasn't that long ago (I'm only 35).  I hate ticketmaster with a passion.

I probably quoted the wrong stuff here, but as an actual criminal, I view the requirement as a way of stating that they won't accept me, regardless of my money/income/rental history. I wouldn't rent to me...I'm a bit of an asshole :)

[dragoncar]

It doesn't just benefit them alone though.

One house goes up for rent for $2500 a month.
40 families apply for it.
How do you choose the right family?  Through applications.  How do you ensure they are solvent?  You run a credit check.  You going to pay to run 40 credit checks?  Or 20?  No.

Around here, housing is so tight that if you want the house or apartment, you pay.  If you are going to be picky about it, you aren't going to have a place to live.

No, it's only benefiting the landlord.  I don't benefit from my LL running a credit check on me, the LL does.  He wants to "choose the right family."  He wants to make sure his tenant is solvent.  He wants he wants he wants.

[Indexer]

Where I live the background check fee was considered the deposit.  You fail, you are out, the LL keeps the fee.  You pass, it counts towards the security deposit. 

If your score is really good and no criminal history(me) then they completely waive the security deposit all together and the BC fee counts towards first month's rent.

I figure that is fair.