Author Topic: Any other planned lifelong renters?  (Read 21813 times)

FIRE_HELP!

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Re: Any other planned lifelong renters?
« Reply #50 on: August 05, 2014, 11:30:52 AM »
renting is great for ppl who are not sure what the future holds

if one is planning on staying in a specific place for an extended period of time (7 yrs or more) buying almost always comes out ahead - and unlike buy and hold stock investing with the downpayment, there is much less market risk in terms of when you actually get in

frugalnacho

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Re: Any other planned lifelong renters?
« Reply #51 on: August 05, 2014, 12:11:17 PM »
We're already aware that rents will rise.  Your claim was that your mortgage payment is "locked in", but Beric is pointing out that's not true because your property taxes will increase.  So your payment will also rise.  There's no free lunch here.

And as I pointed out above, when you invest the large difference between a mortgage payment and a rent payment, your investments should easily be able to cover these rent increases.  (note - may not apply to the area where you live, but definitely applies to the high COL areas where a 2br condo starts at $400K+)

Property tax bills are separate from the mortgage payment.  Renters and home owners both end up paying when property taxes increase, but home owners mortgage payments (which are a substantial fraction of the overall housing payment) won't increase.  The lunch isn't free, it's just locked in at a certain price for 30 years, so it will not be inflation adjusted in the future.  You start out comparing dollars to dollars, but each year into the mortgage you are still using the value of the dollar at the start of the mortgage while your rent contract is going to be pegged at the new value whenever a new lease agreement is signed.  Of course if you can get rent cheap enough and invest the difference and make enough return to cover the difference then you are good, but that is not the case where I live...

I find the inverse to be true in my area.  I would be paying about the same amount in rent for a substantially smaller place.  To get a place of the same size would cost me several hundred dollars a month more than owning, even when factoring in home repairs and upgrades.   Not only have I saved thousands over the years by owning instead of renting, but I have thousands of dollars of equity in my house (That will be paying me in free rent one day). 

marblejane

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Re: Any other planned lifelong renters?
« Reply #52 on: August 05, 2014, 12:18:49 PM »
For your specific situation, sure, the property taxes are separate. My mortgage company requires me to make escrow payments towards my annual property tax bill, so my taxes are included in my mortgage payment. However, the apples to apples comparison is to include a monthly payment towards property taxes in the rent vs. buy decision, whether or not that payment is rolled into your mortgage payment.

W/r/t to the 30-year fixed payment, again, that is specific to the financing tool in your specific situation. Not everyone chooses a 30 year mortgage. And again, since we are looking at PITI, you have to account for insurance and tax increases.

In your particular area, it may make more sense to buy. I guess the more interesting question is, all else equal (ie the rent vs buy financial decision is pretty much a tie), would you prefer to rent or buy in FI? Some of us may still prefer to rent for lifestyle/personal reasons.

frugalnacho

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Re: Any other planned lifelong renters?
« Reply #53 on: August 05, 2014, 12:52:42 PM »
For your specific situation, sure, the property taxes are separate. My mortgage company requires me to make escrow payments towards my annual property tax bill, so my taxes are included in my mortgage payment. However, the apples to apples comparison is to include a monthly payment towards property taxes in the rent vs. buy decision, whether or not that payment is rolled into your mortgage payment.

W/r/t to the 30-year fixed payment, again, that is specific to the financing tool in your specific situation. Not everyone chooses a 30 year mortgage. And again, since we are looking at PITI, you have to account for insurance and tax increases.

In your particular area, it may make more sense to buy. I guess the more interesting question is, all else equal (ie the rent vs buy financial decision is pretty much a tie), would you prefer to rent or buy in FI? Some of us may still prefer to rent for lifestyle/personal reasons.

Mine actually are rolled into one monthly payment to my mortgage company, but they are listed as separate items.  I'm pretty sure I could drop my escrow account and pay the taxes and insurance on my own (as I have known others to do), but I see no incentive to go through the trouble.   But my point was that any increase in property taxes will affect only the property tax I have to pay and not the portion of my mortgage that goes towards principal and interest.  The PI are fixed (unlike rent), while the TI will adjust every year (same as rent).   My total PITI will not rise as fast as a rent because of this. 

I realize not everyone will get a 30 year mortgage, but you have to include your entire lifetime expense into the calculation.  If someone gets a 1 year mortgage, their 1st year PITI will no doubt by substantially more than rent for something comparable, but they will only have TI payments for the rest of their life after that. 

All things being financially equal I would still prefer home ownership. 

I dislike that I am responsible if anything breaks.  It would be nice to just call a land lord and tell him to fix my hot water heater with no additional expenses to me.  I also dislike that I will have to do regular maintenance and upgrades like getting my carpet redone instead of simply moving into a new place that is already done up fresh.

However I love that I can do anything I want and don't have to answer to anyone.  It's mine and I can drill holes where I want, and do any modifications I want with no permission, I can put in a garden, I can put in a fire pit.  I also love that I have a back yard.  I have to cut the grass and take care of weeds, but I like doing that stuff on a small scale - totally worth it to have a backyard imo (although I suppose I could still get this if I rented a house).  I also like the stability that it provides.  I know that I won't be forced to move out at the end of of a lease.  I can probably live in this house my entire life if I want with no fear of ever having to move unless I choose to. 

MrsPete

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Re: Any other planned lifelong renters?
« Reply #54 on: August 05, 2014, 02:08:32 PM »
We're already aware that rents will rise.  Your claim was that your mortgage payment is "locked in", but Beric is pointing out that's not true because your property taxes will increase.  So your payment will also rise.  There's no free lunch here.
No, no points for property tax arguments. 

1.  My property taxes this year are $970.  Even if they go up, there's no comparison between property taxes and paying rent. 

2.  Renters are also paying property tax -- and will pay more when those taxes increase.  Anyone who says otherwise isn't stopping to realize that these costs are included in the monthly rent. 

CanuckExpat

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Re: Any other planned lifelong renters?
« Reply #55 on: August 05, 2014, 02:12:30 PM »
It sounds like people are arguing rather fiercely and maybe emotionally for their preferred choice, and not really answering the OP's question anymore. I thought the Bogleheads Wiki sums it up quite nicely:
Quote
There is no definitive answer for owning vs. renting a home. There can be a financial answer as to whether it is cheaper to buy or rent. However, other considerations such as emotional, environmental, and flexibility can sometimes outweigh decisions that may not be financially justified.
http://www.bogleheads.org/wiki/Owning_vs_renting

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Re: Any other planned lifelong renters?
« Reply #56 on: August 05, 2014, 02:13:40 PM »
To add a wrinkle to the argument - size.  They average house size continues to balloon and with more house you have more square feet of air to heat/cool.  My 350 square foot studio in Orlando, Florida has me MAXING out my electric bill at $66...in the summer.  I couldn't keep the bills that low in a larger house. 

Also, the houses in my area that meet the criteria for buy/rent calculator to make purchasing the better financial option (under $100k) are far from work (no biking) and in very sketchy areas of town.

As a life long renter up until now (and probably far into the future) I maintain three important directives: 1. I don't own it so I don't fix it, call maintenance  2. the lease is a business contract, do your research and be a damn bulldog when it comes to potential rent increases 3. do your research, read the neighborhood reviews, and seriously consider all options in your target location

MrsPete

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Re: Any other planned lifelong renters?
« Reply #57 on: August 05, 2014, 02:14:11 PM »
I think that's a college town specific problem.  I remember doing that too back in the day (signing in the winter for next fall), but in my experience, that just doesn't happen in a major city.  I can't imagine signing a lease even a month before moving, and I'd think two weeks or less is closer to the norm.
I've heard similar things from my co-workers who rent though.  Example:  One of my fellow teachers was in a panic near the end of last school year because her roommate was getting married and moving.  She wanted to find a cheaper place anyway, but the place she wanted didn't have an opening until June -- leaving her homeless for two months.  She ended up moving in illegally with a friend in another apartment for that short time.  She worried the whole time about whether the landlord would figure out she was crashing, and she had some trouble with parking. 

No, moving from rental to rental does require some effort, planning and luck.

Live in a major city?  No thank you. 

AlanStache

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Re: Any other planned lifelong renters?
« Reply #58 on: August 05, 2014, 02:23:17 PM »
I too have my bank automatically send one check per month to cover principle/interest & escrow taxes.  The taxes currently are about 12% of the total minimum payment (dont quote me but is something of that magnitude).  So if my taxes jumped 5% my total monthly payment would only go up a bit.

BS numbers
800$ payment for principle/interest
120$ local taxes

say taxes go up 5%
120$ * 1.05 =  126$
old monthly total payment 920$, new monthly payment 926$.  In my expert engineering opinion I am willing to casually refer to that as unchanged, or "fixed" with an asterisk.

Also taxes are determined by assessed home value times a multiplier the city sets.  Generally the home value will change about with inflation and the city multiplier will only change a bit.

In high COL areas it may be best to rent, I would not argue that, but when home owners say there costs are fixed you can see here what they mean.  This does half assume the owner (borrower) does not own in a property bubble area where tax might compound on it self with each re-assessment at ever higher values.

Edit: Also may over pay/pre pay so any tax increase is not visible, ie I might put 1200$/mon when mortgage+tax totals 920$ so adding 6$ in tax is invisible to me.  I am still paying it but I dont see it without looking at it.
« Last Edit: August 05, 2014, 02:40:02 PM by AlanStache »

Eric

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Re: Any other planned lifelong renters?
« Reply #59 on: August 05, 2014, 02:32:26 PM »
1.  My property taxes this year are $970.  Even if they go up, there's no comparison between property taxes and paying rent. 
But you're in a cheap area where it's already advantageous to buy over rent, so the comparison is skewed.  Because of that, even if your tax rates were the same, your home isn't worth much [comparatively, I'm sure it's very nice :) ], so of course your taxes will be lower.  I just looked it up and $970 is about the monthly property tax payment on a $1MM property, which is what (small) houses cost where I currently live.

2.  Renters are also paying property tax -- and will pay more when those taxes increase.  Anyone who says otherwise isn't stopping to realize that these costs are included in the monthly rent.

No argument here.  The point was only that payments for owning aren't simply fixed as mentioned previously.  (Granted, more fixed than rent, but not without increases)

frugalnacho

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Re: Any other planned lifelong renters?
« Reply #60 on: August 05, 2014, 02:33:40 PM »
To add a wrinkle to the argument - size.  They average house size continues to balloon and with more house you have more square feet of air to heat/cool.  My 350 square foot studio in Orlando, Florida has me MAXING out my electric bill at $66...in the summer.  I couldn't keep the bills that low in a larger house. 

Also, the houses in my area that meet the criteria for buy/rent calculator to make purchasing the better financial option (under $100k) are far from work (no biking) and in very sketchy areas of town.

As a life long renter up until now (and probably far into the future) I maintain three important directives: 1. I don't own it so I don't fix it, call maintenance  2. the lease is a business contract, do your research and be a damn bulldog when it comes to potential rent increases 3. do your research, read the neighborhood reviews, and seriously consider all options in your target location

I view the size opposite to you.  My house is 1300 sq ft with a basement.  My last electric bill was $53 (I live in mi so I haven't been running the AC all summer).  My heating costs in the winter are well under $100 per month, even with the brutal winter we just had.  The utility increase for me to go from 350 sq ft to 1300 sq ft is negligible when compared to the total cost of rent/mortgage, but the space increase is huge.  Maybe i'm not as minimal as everyone, but I enjoy having 2 bathrooms, and a guest bedroom for friends and relatives, and a separate room to hang and play my guitars without disturbing everyone in the house, and space to have friends and family actually hang out while cooking dinner etc.  I could never do all that in a 350 sq ft apartment. 

Zikoris

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Re: Any other planned lifelong renters?
« Reply #61 on: August 05, 2014, 02:34:57 PM »
If anyone is interested in some specific numbers, I can provide my own for my city.

Over the last 8 years I've lived in four apartments in Vancouver. Moving is a bit annoying, but not too much work when you have limited stuff. It probably helps that I don't set my mind on moving into a specific building and resort to going homeless when they don't have a convenient opening (Seriously? Why would someone do that?), but that's besides the point. Pretty much any city has some combination of Craigslist, bulletin boards, phone books, and internet access, which is all you really need to find a place.

My rent has gone from $600 + utilities (about $50/month) + transit pass ($81/month at the time) to $755 including utilities, + 1 book bus tickets/moth ($21/month) over the last 8 years, though the last two apartments were a SIGNIFICANT quality upgrade from the first two.  My only housing-related additional expense is mandatory renters insurance, which is $15/month.

The cheapest, smallest condos in the city start at around $250,000, + utilities/garbage/sewage/whateverelsethecitycharges, + MUCH more expensive insurance, + $200 at least in strata fees, + maintenance, etc etc. The second you have something serious that needs to be fixed with the building, bam, special levy, for pretty much any amount - my boyfriend mentioned a building he knows of where it came to $100,000 per unit, all at once, for major critical work.

Mathematically, I just don't see how you could possibly come out ahead by buying rather than renting here.

Eric

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Re: Any other planned lifelong renters?
« Reply #62 on: August 05, 2014, 02:42:26 PM »
It sounds like people are arguing rather fiercely and maybe emotionally for their preferred choice, and not really answering the OP's question anymore.

I was thinking the same thing.  Considering that there are very few of us around here who will either rent their whole adult lives until FIRE, or possibly their whole adult lives, this seemed like a good place to build some camaraderie and/or commiserate with each other.  Home owners, no need to justify your purchases to us.  None of us renters are questioning your decision.  We'd simply like the same courtesy extended to us.  We're good at math too.  If owning made sense for where we live, we'd do it.

Eric

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Re: Any other planned lifelong renters?
« Reply #63 on: August 05, 2014, 02:44:39 PM »
My rent has gone from $600 + utilities (about $50/month) + transit pass ($81/month at the time) to $755 including utilities, + 1 book bus tickets/moth ($21/month) over the last 8 years, though the last two apartments were a SIGNIFICANT quality upgrade from the first two.  My only housing-related additional expense is mandatory renters insurance, which is $15/month.

Is that the total amount of rent for the apartment or just your portion?  Just curious.

Zikoris

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Re: Any other planned lifelong renters?
« Reply #64 on: August 05, 2014, 02:51:26 PM »
My rent has gone from $600 + utilities (about $50/month) + transit pass ($81/month at the time) to $755 including utilities, + 1 book bus tickets/moth ($21/month) over the last 8 years, though the last two apartments were a SIGNIFICANT quality upgrade from the first two.  My only housing-related additional expense is mandatory renters insurance, which is $15/month.

Is that the total amount of rent for the apartment or just your portion?  Just curious.

Total. I guess technically it's been half that much for my share. No roommates, just boyfriends who moved in with me.

frugalnacho

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Re: Any other planned lifelong renters?
« Reply #65 on: August 05, 2014, 02:52:05 PM »
Mathematically, I just don't see how you could possibly come out ahead by buying rather than renting here.

That always seemed crazy to me.  Who is buying these places up and renting them when rent is lower than the cost of a mortgage? How those landlords make money if purchasing is so much more expensive than rent?

CanuckExpat

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Re: Any other planned lifelong renters?
« Reply #66 on: August 05, 2014, 03:14:49 PM »
If anyone is interested in some specific numbers, I can provide my own for my city.

Mathematically, I just don't see how you could possibly come out ahead by buying rather than renting here.

For what it's worth, I plugged your numbers into the NYT calculator, I had to assume 5% annual home price growth to make buying come out ahead of renting with your numbers after 15 years (assuming 2.5% rent increase, 4.0% investment growth, 2.5% inflation rate).

That always seemed crazy to me.  Who is buying these places up and renting them when rent is lower than the cost of a mortgage? How those landlords make money if purchasing is so much more expensive than rent?

They are counting on appreciation, not cash-flow, or they just want a "stable" place to park funds.
Also, most people don't purchase their own personal residence evaluating the cash flow the same as they would a rental..

frugalnacho

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Re: Any other planned lifelong renters?
« Reply #67 on: August 05, 2014, 03:25:03 PM »
If anyone is interested in some specific numbers, I can provide my own for my city.

Mathematically, I just don't see how you could possibly come out ahead by buying rather than renting here.

For what it's worth, I plugged your numbers into the NYT calculator, I had to assume 5% annual home price growth to make buying come out ahead of renting with your numbers after 15 years (assuming 2.5% rent increase, 4.0% investment growth, 2.5% inflation rate).

That always seemed crazy to me.  Who is buying these places up and renting them when rent is lower than the cost of a mortgage? How those landlords make money if purchasing is so much more expensive than rent?

They are counting on appreciation, not cash-flow, or they just want a "stable" place to park funds.
Also, most people don't purchase their own personal residence evaluating the cash flow the same as they would a rental..

Won't it appreciate regardless of whether it is owned by a land lord or a home owner?  And if it appreciates enough for the land lord to come out ahead, couldn't someone just have bought it themselves and come out ahead?

Zikoris

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Re: Any other planned lifelong renters?
« Reply #68 on: August 05, 2014, 03:43:07 PM »
If anyone is interested in some specific numbers, I can provide my own for my city.

Mathematically, I just don't see how you could possibly come out ahead by buying rather than renting here.

For what it's worth, I plugged your numbers into the NYT calculator, I had to assume 5% annual home price growth to make buying come out ahead of renting with your numbers after 15 years (assuming 2.5% rent increase, 4.0% investment growth, 2.5% inflation rate).

That always seemed crazy to me.  Who is buying these places up and renting them when rent is lower than the cost of a mortgage? How those landlords make money if purchasing is so much more expensive than rent?

They are counting on appreciation, not cash-flow, or they just want a "stable" place to park funds.
Also, most people don't purchase their own personal residence evaluating the cash flow the same as they would a rental..

Did you include $200-$300/month strata fees? That seems to be the thing that really throws the numbers in favour of renting. I also put inflation lower when I run numbers - I feel like 1% is pretty generous, from my own record keeping. For example, I've been buying groceries all the way back since I used to shop for my family when I was 13 (14 years ago), and I spend substantially less now. My small rent increases have all come with drastic quality improvements, so not much real increase there over the last decade. And so on.

CanuckExpat

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Re: Any other planned lifelong renters?
« Reply #69 on: August 05, 2014, 04:39:21 PM »
Won't it appreciate regardless of whether it is owned by a land lord or a home owner?  And if it appreciates enough for the land lord to come out ahead, couldn't someone just have bought it themselves and come out ahead?

I should say I was just speculating on what makes someone buy a rental in a market like that. I can't actually read people's minds (nor predict future appreciation).
You can see posts in the landlording section of this forum that some people buy strictly for cash-flow and avoid high-cost cities like the plague, others are very happy with the appreciation they have been seeing. Different strokes for different folks. I was just trying my best to answer your original question with my best guess.

Did you include $200-$300/month strata fees? That seems to be the thing that really throws the numbers in favour of renting. I also put inflation lower when I run numbers - I feel like 1% is pretty generous, from my own record keeping. For example, I've been buying groceries all the way back since I used to shop for my family when I was 13 (14 years ago), and I spend substantially less now. My small rent increases have all come with drastic quality improvements, so not much real increase there over the last decade. And so on.
Yes. I put $250 in "monthly common fees" in the calculator.
As for inflation, it seems that the NYT puts 2.3% as the default, I should have probably just left it at that but I figured 2.5% is what most central banks target. We can argue about what someones personal inflation rate is, but that is really hard to estimate. It doesn't seem to make a big difference either way, and a lower inflation rate would make buying slightly more advantageous I think (less of an opportunity cost bite for all those funds tied up in home equity). The other difference is probably that I used the default mortgage rates from the calculator, which are based on American numbers. The (not as heavily government backed) Canadian mortgage situation might be different.

I don't have a particular horse in this race. I was just curious what your numbers would give you.
Waiting 15 years and having to bank on 5% appreciation is a big burden to overcome though...

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Re: Any other planned lifelong renters?
« Reply #70 on: August 05, 2014, 04:54:31 PM »
Are you sure you can find a new rental any time you please?  A place in a good location with reasonable rent?  If you want just a one-bedroom, it might be easier than if you need something to house a family.  And if you have special requests like a good-sized pantry, proximity to public transportation, or a specific school district, you're limited to a very small number of rentals.  Once you find a place, will it be available when you want it?  To give an example, in January my above-mentioned daughter committed to a two-bedroom apartment starting in August -- people who wait 'til school's out typically can't get a place.  Almost before the ink was dry on her lease, her roommate learned that a high school friend is transferring to their school next year, and the two girls agreed that they'd love to switch their two-bedroom for a three-bedroom /include the third girl.  NOPE.  They were open to taking a four-bedroom and searching for a fourth person.  NOPE.  Though the complex had just "opened the dates" for the fall semester a week before, they were already sold out -- no three bedrooms were available.  The moral:  Rentals aren't all that easy to find just anywhere. 

I think that's a college town specific problem.  I remember doing that too back in the day (signing in the winter for next fall), but in my experience, that just doesn't happen in a major city.  I can't imagine signing a lease even a month before moving, and I'd think two weeks or less is closer to the norm.

oh yeah. renting in a college town is pretty much hell. especially if you have to move at a time of year other than May or August... and/or you have a dog... you are probably fucked.

As a life long renter up until now (and probably far into the future) I maintain three important directives: 1. I don't own it so I don't fix it, call maintenance

would that it were that easy! I still can't believe I'm the only person in this thread to complain about this. seriously one of the biggest things I hate about renting. am I just really bad at identifying terrible landlords/property managers before I move in?

To add a wrinkle to the argument - size.  They average house size continues to balloon and with more house you have more square feet of air to heat/cool.  My 350 square foot studio in Orlando, Florida has me MAXING out my electric bill at $66...in the summer.  I couldn't keep the bills that low in a larger house. 

Also, the houses in my area that meet the criteria for buy/rent calculator to make purchasing the better financial option (under $100k) are far from work (no biking) and in very sketchy areas of town.

As a life long renter up until now (and probably far into the future) I maintain three important directives: 1. I don't own it so I don't fix it, call maintenance  2. the lease is a business contract, do your research and be a damn bulldog when it comes to potential rent increases 3. do your research, read the neighborhood reviews, and seriously consider all options in your target location

I view the size opposite to you.  My house is 1300 sq ft with a basement.  My last electric bill was $53 (I live in mi so I haven't been running the AC all summer).  My heating costs in the winter are well under $100 per month, even with the brutal winter we just had.  The utility increase for me to go from 350 sq ft to 1300 sq ft is negligible when compared to the total cost of rent/mortgage, but the space increase is huge.  Maybe i'm not as minimal as everyone, but I enjoy having 2 bathrooms, and a guest bedroom for friends and relatives, and a separate room to hang and play my guitars without disturbing everyone in the house, and space to have friends and family actually hang out while cooking dinner etc.  I could never do all that in a 350 sq ft apartment.

yeah... I tend to rent houses because I have dogs and I like entertaining outside. the big downside to renting a house is you are very limited in what energy efficiency improvements you can make. our rental house is old and our electricity bill BLOWS.

anyway, I love the convenience/cost savings of renting if you aren't planning on being somewhere for a long time, which is where I'm at now. but god damn I hate almost everything else about it. y'all sound like you have had way better experiences than me :)

OSUBearCub

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Re: Any other planned lifelong renters?
« Reply #71 on: August 05, 2014, 05:38:33 PM »
y'all sound like you have had way better experiences than me :)

I think it's being open to the idea that renting is a viable option - the root of this thread.  When you consider it a business arrangement like any other and you lay the proper ground work, build the relationship from the first moment you show interest in a place, and then continue to be a decent tenant, it's not hard to find a good experience renting. 

In Orlando, the properties close enough for me to bike to work are all in the same coveted neighborhood.  So for me to buy, I either need to figure out all cash financing to be competitive against flippers (there are a LOT), buy a house that needs no TLC and is too big for my needs and will be expensive to heat/cool, or look to areas that I'm not willing to live in due to blight and crime.  Saving an additional $150,000  nest egg earning 4% and withdrawing 700 per month will last 31 years without touching my FIRE reserves.  That's also precisely the time I'll qualify for subsidized old folks communities with exactly the amenities I'll need as a jazzy senior citizen. :-)

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Re: Any other planned lifelong renters?
« Reply #72 on: August 05, 2014, 06:26:13 PM »
Mathematically, I just don't see how you could possibly come out ahead by buying rather than renting here.

That always seemed crazy to me.  Who is buying these places up and renting them when rent is lower than the cost of a mortgage? How those landlords make money if purchasing is so much more expensive than rent?

The condo rental market and the lower cost rental market are completely different here, basically. If you own a nice condo, you can rent it out for a couple thousand a month and break even - though people I know who have done this seem to regret it and barely be breaking even, or even slightly losing money but hoping the place appreciates.

The low cost rental market is mostly very old heritage apartment buildings, old houses that have been converted into multiple suites, and strange things that are hard to classify but rent for cheap. I imagine this would be a very difficult market for a potential landlord to get into, as most of these units have been owned by the same people/companies forever.

If you live in one of the low cost rentals, you don't really have a housing equivalent to compare to for buying - you have to look at the condo market for comparison, since that's all there is.

Freedom2016

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Re: Any other planned lifelong renters?
« Reply #73 on: August 05, 2014, 07:17:01 PM »
But that's not true -- not long term.  Yes, you're locked into your rent for one year (the likely lease period), but after that the rent can (and probably will) increase.  Year after year after year.  Example:  My daughter is about to move into a college apartment.  She and her roommate will EACH be paying roughly what my college roommates and I paid TOTAL 25 years ago.  And we're in the same area.  Prices definitely will go up.

While I agree with you in theory, it doesn't actually square with my experience as a renter. I lived in one apartment for 5 years and never once did my landlord raise the rent - and we were month-to-month from the beginning. Currently, DH and I are renting a house out of state while I work here and when we asked our landlord about staying beyond our year lease, he enthusiastically said yes, with no change to the terms or rent. ("Stay as long as you like!")

Having said that, we do have friends that were "forced" out of their rental by a landlord who increased rent 50% all at once. But I suspect that's an anomaly at the other end of the scale.  I suspect many, if not most, landlords are happy to have good tenants and not to raise the rent at every single opportunity, lest they lose a good tenant and have to spend time and money searching for a new one.

Having said all that, DH and I are homeowners now and will almost certainly buy again in a few years.

rocksinmyhead

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Re: Any other planned lifelong renters?
« Reply #74 on: August 05, 2014, 08:06:48 PM »
y'all sound like you have had way better experiences than me :)

I think it's being open to the idea that renting is a viable option - the root of this thread.  When you consider it a business arrangement like any other and you lay the proper ground work, build the relationship from the first moment you show interest in a place, and then continue to be a decent tenant, it's not hard to find a good experience renting. 

I think I may be misunderstanding your statement and may be inappropriately offended by it, but I literally don't know how I could be a better tenant. I have never paid a month of rent late in my life, never damaged a property, never broken a lease... are there other things a tenant is supposed to do? if courteously requesting reasonable maintenance, like fixing a broken dishwasher or a hole in the bathtub, makes me a bad tenant, I don't wanna live in that world. LOL. I'm not sure how I would "build a relationship from the first moment I show interest," other than by being communicative and paying everything on time, which I already do.

it's obviously a totally viable option, and I've had a few great landlords and really loved some of the properties I've rented, but I've also had at least two landlords that were absolutely terrible and I have no idea how I would have known that before I signed a lease :/

But that's not true -- not long term.  Yes, you're locked into your rent for one year (the likely lease period), but after that the rent can (and probably will) increase.  Year after year after year.  Example:  My daughter is about to move into a college apartment.  She and her roommate will EACH be paying roughly what my college roommates and I paid TOTAL 25 years ago.  And we're in the same area.  Prices definitely will go up.

While I agree with you in theory, it doesn't actually square with my experience as a renter. I lived in one apartment for 5 years and never once did my landlord raise the rent - and we were month-to-month from the beginning. Currently, DH and I are renting a house out of state while I work here and when we asked our landlord about staying beyond our year lease, he enthusiastically said yes, with no change to the terms or rent. ("Stay as long as you like!")

Having said that, we do have friends that were "forced" out of their rental by a landlord who increased rent 50% all at once. But I suspect that's an anomaly at the other end of the scale.  I suspect many, if not most, landlords are happy to have good tenants and not to raise the rent at every single opportunity, lest they lose a good tenant and have to spend time and money searching for a new one.

yeah, I will say this seems to be one downside of renting that is overblown, although maybe it's different in different markets... I've never had the rent raised on me, either.

Beric01

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Re: Any other planned lifelong renters?
« Reply #75 on: August 05, 2014, 09:47:30 PM »
I think I may be misunderstanding your statement and may be inappropriately offended by it, but I literally don't know how I could be a better tenant. I have never paid a month of rent late in my life, never damaged a property, never broken a lease... are there other things a tenant is supposed to do? if courteously requesting reasonable maintenance, like fixing a broken dishwasher or a hole in the bathtub, makes me a bad tenant, I don't wanna live in that world. LOL. I'm not sure how I would "build a relationship from the first moment I show interest," other than by being communicative and paying everything on time, which I already do.

it's obviously a totally viable option, and I've had a few great landlords and really loved some of the properties I've rented, but I've also had at least two landlords that were absolutely terrible and I have no idea how I would have known that before I signed a lease :/

I would say a big part of not getting screwed by a bad landlord is just doing your research before renting. I did my research on my current apartments - I read Yelp and other website reviews, I came in for a tour and asked questions, etc. You gotta do your due diligence and you'll be fine.

And I really think people are really overreacting on the rent increase issue. Landlords simply aren't allowed to do that mid-lease. If you are notified of an upcoming rent increase (I think they have to give you at least 30 days, if not more), and you think it's unreasonable, move out rather than getting screwed. Don't sign a new lease. Also, show your landlord you've always paid on time, you're a reliable client, etc. and they may let you keep your current rate. Just paying your rent on time and being a reasonable person goes a long way.

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Re: Any other planned lifelong renters?
« Reply #76 on: August 06, 2014, 03:07:26 PM »
I think I may be misunderstanding your statement and may be inappropriately offended by it, but I literally don't know how I could be a better tenant. I have never paid a month of rent late in my life, never damaged a property, never broken a lease... are there other things a tenant is supposed to do? if courteously requesting reasonable maintenance, like fixing a broken dishwasher or a hole in the bathtub, makes me a bad tenant, I don't wanna live in that world. LOL. I'm not sure how I would "build a relationship from the first moment I show interest," other than by being communicative and paying everything on time, which I already do.

it's obviously a totally viable option, and I've had a few great landlords and really loved some of the properties I've rented, but I've also had at least two landlords that were absolutely terrible and I have no idea how I would have known that before I signed a lease :/

No offence intended!  I meant that doing exactly what you've been doing generally leads to good renting situations.  When I say managing the relationship from the start, I mean it's a business relationship.  I keep this idea front and center when dealing with landlords and leasing agents. 

I keep emotions completely out of the picture whenever possible.  I do all my research and bring it with me - reviews, rents I've been offered at nearby locations, floor plans, "amenities", a survey of the number of vacant properties on the rest of the street, etc.  I politely explain that I've done my research and clearly state my price range and requirements.  I'll negotiate a lower rental rate in that first meeting and if they wont play ball, they're clearly not smart business people so I walk.  I've found that smart business owners are more attentive landlords.  I also like living in just-past-their-prime apartment communities - they keep a staff of maintenance and groundskeepers which shortens response times for issues.

Each lease renewal, I follow the same procedure - get new quotes from nearby landlords, read the new reviews, get paperwork in order in advance, etc.  Again, reminding them that it's a business relationship and I'm eager to continue paying them for their services but it must make financial sense.

I'm the kind of tenant I'd want to rent to if I were ever to own rentals for semi-passive income.

rocksinmyhead

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Re: Any other planned lifelong renters?
« Reply #77 on: August 07, 2014, 07:17:37 AM »
yeah, I think I've found the following to be generally true:

- SFH/duplex/townhouse rentals with an individual landlord who owns fewer than 5 properties and is their own property manager: always had good experiences with this, though I guess you are taking a risk because research beforehand usually doesn't turn up much
- large apartment complex with dedicated staff: I have only had one experience with this and it was good; based on what I hear from friends, it can go either way, but this one you can probably figure out pretty easily with research beforehand
- SFH/duplex/townhouse rentals managed by property manager/company who manages several (>10) properties/tenants: this is where I've gotten fucked (and yes I know how to use Google, LOL... sometimes there just isn't anything out there)

I'm curious if others have similar experiences/guidelines/rules of thumb. these have held true for me across three different cities (big city, small city, and college town) in three different parts of the country. and yeah, I'm definitely the kind of tenant I would want if I were a landlord. hopefully one day I'll be a landlord and I'll remember what it was like to be a tenant :)