Tales from this insane real estate *rental* market

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guyfromct
Posts: 556
Joined: Sun Mar 13, 2022 12:43 pm

Re: Tales from this insane real estate *rental* market

Post by guyfromct »

newyorker wrote: Thu Jul 07, 2022 6:51 pm
SantaClaraSurfer wrote: Thu Jul 07, 2022 6:42 pm
newyorker wrote: Thu Jul 07, 2022 5:33 pm Unless one plans to move within few years, renting for life is as dumb as it can get.
I dunno, "dumb as it can get"???

Our rent here in Silicon Valley in 2022 is still 10% less than when we moved into our unit in 2018, mostly due to the pandemic and work from home. When we renewed in late 2020, we got a one year lease renewal that was 18.5% less than the previous year's.

At this point we've saved about $15,000, as renters, over the last two years. It's the opposite of what's happening with rents in many other parts of the country, but it's true here.

What we're paying now is easily $3,000 to $4,000 a month less than purchasing the equivalent residence with a similar commute time with 20% down. And that would mean condo or town home living in a development close to a freeway.

To get a place we'd really like for the long term in a walkable neighborhood that we would want to live in long term here would definitely be more than twice what we pay in rent. That's just a fact of life in this market.

Every place is different and everyone's finances are different.

Imho renting long term pencils out if you like where you rent, your rent to gross income ratio is healthy, and you have a high savings rate.

Eventually, the high savings rate and greater flexibility on location as years pass means purchasing a residence should, on balance, work out for us, if that's something we want to do.

I'm not opposed to owning a residence. However, I don't think renters are being dumb, and would not make that blanket statement.
Your case is an exception. In areas of VHCOL ex Manhattan or SF, rent price is usually 1/2 of mortgage payment. Rest of the country, rent is usually little less than mortgage payment. It makes no sense to rent in these areas.
In many MCOL or LCOL areas the rent is actually more than the mortgage by a healthy factor. Trulia estimates PITI and HOA would be $1,300 assuming a standard 20% down on a townhome near us, rental comps are $1,700-$1,850.

Landlords have to make money some way, in “gateway” markets they may be baking in more appreciation and expectations around ability to hike in the future, but in tertiary markets cash flow is the name of the game.
newyorker
Posts: 1635
Joined: Sun May 17, 2020 7:59 am

Re: Tales from this insane real estate *rental* market

Post by newyorker »

guyfromct wrote: Sat Aug 13, 2022 9:10 am
newyorker wrote: Thu Jul 07, 2022 6:51 pm
SantaClaraSurfer wrote: Thu Jul 07, 2022 6:42 pm
newyorker wrote: Thu Jul 07, 2022 5:33 pm Unless one plans to move within few years, renting for life is as dumb as it can get.
I dunno, "dumb as it can get"???

Our rent here in Silicon Valley in 2022 is still 10% less than when we moved into our unit in 2018, mostly due to the pandemic and work from home. When we renewed in late 2020, we got a one year lease renewal that was 18.5% less than the previous year's.

At this point we've saved about $15,000, as renters, over the last two years. It's the opposite of what's happening with rents in many other parts of the country, but it's true here.

What we're paying now is easily $3,000 to $4,000 a month less than purchasing the equivalent residence with a similar commute time with 20% down. And that would mean condo or town home living in a development close to a freeway.

To get a place we'd really like for the long term in a walkable neighborhood that we would want to live in long term here would definitely be more than twice what we pay in rent. That's just a fact of life in this market.

Every place is different and everyone's finances are different.

Imho renting long term pencils out if you like where you rent, your rent to gross income ratio is healthy, and you have a high savings rate.

Eventually, the high savings rate and greater flexibility on location as years pass means purchasing a residence should, on balance, work out for us, if that's something we want to do.

I'm not opposed to owning a residence. However, I don't think renters are being dumb, and would not make that blanket statement.
Your case is an exception. In areas of VHCOL ex Manhattan or SF, rent price is usually 1/2 of mortgage payment. Rest of the country, rent is usually little less than mortgage payment. It makes no sense to rent in these areas.
In many MCOL or LCOL areas the rent is actually more than the mortgage by a healthy factor. Trulia estimates PITI and HOA would be $1,300 assuming a standard 20% down on a townhome near us, rental comps are $1,700-$1,850.

Landlords have to make money some way, in “gateway” markets they may be baking in more appreciation and expectations around ability to hike in the future, but in tertiary markets cash flow is the name of the game.
Exactly

MCOL and LCOL, rent is higher than mortgage but less chance of property appreciation

HCOL and VHCOL, mortgage is higher than rent, but LL hopes that property appreciation will offset the loss
jane1
Posts: 802
Joined: Mon Dec 26, 2011 1:00 am

Re: Tales from this insane real estate *rental* market

Post by jane1 »

It is a crazy market. Last year we lost multiple bids (in Miami area), even after bidding 10-20% above listing price. A friend in NYC area recently got a >25% increase.

Which websites do landlords and/or tenants use for rental listings by owner (not apartment complex)?
I have used Zillow, Trulia, etc but don't get responses to my messages for showings/tours.

Agents in Orlando area apparently don't get a commission on rentals so they are not interested in helping with any scheduling, even though they are willing to set me up with daily emails of their MLS search results.
Topic Author
CletusCaddy
Posts: 2678
Joined: Sun Sep 12, 2021 4:23 am

Re: Tales from this insane real estate *rental* market

Post by CletusCaddy »

jane1 wrote: Sat Aug 13, 2022 3:53 pm It is a crazy market. Last year we lost multiple bids (in Miami area), even after bidding 10-20% above listing price. A friend in NYC area recently got a >25% increase.

Which websites do landlords and/or tenants use for rental listings by owner (not apartment complex)?
I have used Zillow, Trulia, etc but don't get responses to my messages for showings/tours.

Agents in Orlando area apparently don't get a commission on rentals so they are not interested in helping with any scheduling, even though they are willing to set me up with daily emails of their MLS search results.
PadMapper is my go-to for rentals
Topic Author
CletusCaddy
Posts: 2678
Joined: Sun Sep 12, 2021 4:23 am

Re: Tales from this insane real estate *rental* market

Post by CletusCaddy »

newyorker wrote: Sat Aug 13, 2022 2:01 pm
guyfromct wrote: Sat Aug 13, 2022 9:10 am
newyorker wrote: Thu Jul 07, 2022 6:51 pm
SantaClaraSurfer wrote: Thu Jul 07, 2022 6:42 pm
newyorker wrote: Thu Jul 07, 2022 5:33 pm Unless one plans to move within few years, renting for life is as dumb as it can get.
I dunno, "dumb as it can get"???

Our rent here in Silicon Valley in 2022 is still 10% less than when we moved into our unit in 2018, mostly due to the pandemic and work from home. When we renewed in late 2020, we got a one year lease renewal that was 18.5% less than the previous year's.

At this point we've saved about $15,000, as renters, over the last two years. It's the opposite of what's happening with rents in many other parts of the country, but it's true here.

What we're paying now is easily $3,000 to $4,000 a month less than purchasing the equivalent residence with a similar commute time with 20% down. And that would mean condo or town home living in a development close to a freeway.

To get a place we'd really like for the long term in a walkable neighborhood that we would want to live in long term here would definitely be more than twice what we pay in rent. That's just a fact of life in this market.

Every place is different and everyone's finances are different.

Imho renting long term pencils out if you like where you rent, your rent to gross income ratio is healthy, and you have a high savings rate.

Eventually, the high savings rate and greater flexibility on location as years pass means purchasing a residence should, on balance, work out for us, if that's something we want to do.

I'm not opposed to owning a residence. However, I don't think renters are being dumb, and would not make that blanket statement.
Your case is an exception. In areas of VHCOL ex Manhattan or SF, rent price is usually 1/2 of mortgage payment. Rest of the country, rent is usually little less than mortgage payment. It makes no sense to rent in these areas.
In many MCOL or LCOL areas the rent is actually more than the mortgage by a healthy factor. Trulia estimates PITI and HOA would be $1,300 assuming a standard 20% down on a townhome near us, rental comps are $1,700-$1,850.

Landlords have to make money some way, in “gateway” markets they may be baking in more appreciation and expectations around ability to hike in the future, but in tertiary markets cash flow is the name of the game.
Exactly

MCOL and LCOL, rent is higher than mortgage but less chance of property appreciation

HCOL and VHCOL, mortgage is higher than rent, but LL hopes that property appreciation will offset the loss
Yup same difference you see between value vs growth stocks
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