November 06, 2007

A Special HousingPANIC Message for Bubble Sitters and Bitter Renters


If you're renting an apartment, get out.

That's soooooo 1970's.

There's 18 million vacant homes in America today. You have your choice of amazing homes, lofts and condos, for a fraction of the cost of owning. "Owners" are DESPERATE.

To paraphrase the NAR, there's never been a better time to rent.

So get out of your apartment complex, and go find yourself something nice for cheaper.

But hey, maybe I'm wasting my time. Are any of you (not in college or illegals) actually still renting apartments?

46 comments:

Anonymous said...

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Just hope that the rental house stays out of foreclosure!!

Flagg707 said...

Still renting an apartment. I live in a college town (but I'm not a college student) and rental prices haven't fallen much - yet. The demand is still high and supply, while growing, is not at a huge overhang. Right now I'm content to pay a cheap rent, get free cable, enjoy the pool and have zero yard work to do during the warm months.

That said, prices are coming down and I will be looking to rent a house this coming spring if the trends continue.

Anonymous said...

Yes, that's right leave that apartment and find a house. All of mine are rented, the renters are nice people, but I sometimes feel sorry that they are paying off the properties for me. I did see in santa rosa, ca that rents are going up because people need a place to live and they are waiting to buy. Best of luck out there, if it gets as bad as all the doomers are chanting we'll all be in trouble.

Arlene said...

I am still renting an apartment, and here's why: The staff are great.

One of the great pluses of a vacation from home ownership is that maintenance is someone else's problem. Experienced apartment managers know that and staff accordingly.

If you rent from a desperate owner, think he's gonna pay a real plumber, real electrician, etc., if something goes wrong? Think your worries about the leaky washer are at the top of his daily "to-do" list? NOT. He's probably too busy fending off calls from his creditors.

I would consider this only if the price was incredible and if I had my own rolodex of great home repair folks.

Wait till summer 2008 said...

Price corrections are just getting started.
Wait till mid 2008. Thats when there will be blood in the streets for deseperate sellers.

Anonymous said...

I'm going one better - my wife and I moved to her hometown for my new job, and we moved in with her parents while we looked for a house. We have a great relationship with them, and they love having their 8 month-old granddaughter around. We've been able to take our time looking for a house without pressure, and we've been able to help them by cleaning and taking care of the elderly great-grandparents.

It's not a situation that would work for everyone, but for us, it's perfect. We will buy a house this Winter/Spring, most likely. But only if we can get a nice, simple home for a reasonable price.

Anonymous said...

1) < 1 mi from the METRO (subway)?
2) No 2nd car?
3) Renting a former apt., now "condo," FTW.

Anonymous said...

I don't know if you would call this an apartment or a condo, it's right on the edge by square footage. Why keep renting it? A great relationship with our landlords, they let us keep our cats, and we're already paying $200 less than the same unit in the other building on the block. We also don't pay water, which is huge here, and he does the yard work. We're quite content to stay here until the bubble collapses enough so we can buy a place outright for the cash we saved.

Here's an off-topic question, anyone else tracking the price of metals? Be still my heart....

Anonymous said...

Prices aren't moving yet in my hometown (San Francisco). Maybe mid-next year, maybe not. Hubby and I aren't going to wait around forever to plant roots, but we're not going to overpay, either.

If the crash happens first (and faster) in Europe, we may end up in the south of France, Spain or Italy instead...and get a lot more for our money than a crappy 2/1 that hasn't been updated since the hippy owner bought it in the 60s.

westwood said...

Still renting an apartment. It's less than a mile to work with grocery stores and movie theaters also in easy walking distance. Oh, and it's $1k a month. I'm not finding a house in that neighborhood for less than a grand.

Anonymous said...

Yeah - excellent advice. Go rent a house, sign a lease, get comfortable, then keep a watch out for the sheriff coming to kick you and yours to the curb when Stressed Homeowner gets foreclosed.

I mean use a wee bit 'o logic here ... if Mom and Pop Housedebtor have to subsidize your rent in an age of plummeting real estate values, how long can they/will they keep that up?

Chances are, anyone in the postion of being underwater on a house they aren't even living in doesn't make the soundest financial moves. I wouldn't even want to rely them when it comes to housing myself and my family.

Anonymous said...

I rented a condo in NYC for two years, it's no different than the apartment I'm in now.

Except that the service staff are nicer now.

AuAgPb said...

Yep, guilty as charged. 5 months to go on my lease. It is getting old.

Cow_tipping said...

Not me. And most illegals know better. They rent 5-8 bedroom houses, so 40-64 of them can live happily paying 1/40th of the 1/3rd of the house payment.
Cool.
cow_tipping.

Anonymous said...

Wait till summer 2008 said...
Price corrections are just getting started.
Wait till mid 2008. Thats when there will be blood in the streets for deseperate sellers.

November 06, 2007 7:50 PM
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Agreed, even the official gov't mouthpiece of disinformation on housing, OFHEO, is predicting the worst is yet to come in mid 08!!

Frank@Scottsdale-Sucks.com said...

What amazes me is that the cost to rent a beautiful McMansion is usually CHEAPER than an apartment! I'm renting a 2000 sq ft house for the same price that 1,400 sq ft apartments go for around here. Plus we have a yard and real garage, things you don't get at an apartment.

Other than convenience (i.e., you get a job transfer and have 2 days to find a place to live), I don't know why anyone would continue to live in apartments.

To anon 7:46, if you are really a landlord and bought your properties pre-2002 then congratulations. Any landlord who buys a property now will experience 50% negative cash flow. My former landlord in Phoenix who owned about a dozen properties has gone bankrupt due to falling rents and increasing vacancies.

And down here in Orange County, CA, rents are in a free fall, so I doubt they're "skyrocketing" in small town Santa Rosa.

Mammoth said...

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Frank@Scottsdale-Sucks.com said...
“I visited Seattle once, after a friend moved there. I went to visit and what struck me most was how grumpy and cranky everyone was. Why do people live in that weather and put themselves through that? Hell I'd go back to Scottsdale over Seattle.”
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Are you for real? Where in Seattle did you go? People seem a lot nicer here than in other places I’ve been. Seattle is one of the finest big cities in the US!

You have been living on this earth how long now, and you still do not understand that a cheerful disposition and positive outlook of the world comes from within, and not from the outside (i.e. the weather)?

Scottsdale sucks, Seattle sucks…does every place suck to you, except for southern California? Well. o.k., everybody is entitled to their own opinion, I guess…remember Aesop’s fable: “The Six Blind Men and the Elephant?”

So it rains a lot here during the winter. So what? The weather doesn’t stop many around here from getting out & about, what with the mountains and snow ~1 hour’s drive east of the city, Puget Sound at your doorstep if you like the water, and the coast just a 2 hour drive to the west. How many national parks are within a few hours’ drive of Seattle…Mt. Rainier, Olympic, North Cascades…am I missing anything here?

And if you check out the west side of Puget Sound, you can live in a fine rural area just a ferry’s ride away from the big city. Want acreage? There’s plenty of nice parcels of land for sale here at the moment, and some very desperate sellers who may be open to a lowball offer. “Marked to Market” indeed! If you enjoy gardening and/or are into self-sufficiency, you can grow vegetables year-round in this maritime climate, as we don’t have the big winter freezes here.

Yes HP is often ‘over the top,’ but when you start kicking the Seattle area, you are going too far. Peace.
-Mammoth

Anonymous said...

Stop throwing around that 18 million vacant home figure. Unless of course you're talking about living in a crack den in Baltimore or a collapsing hovel in the backwoods of North Carolina.

That said, I'm in an apartment right now and couldn't be happier. I'm three years out of college, and since my fiancee and I don't have much stuff, there's no reason to get something larger. Rents for houses in my town run around $1500 for a small two bedroom while I'm paying $900 for a bit less room. Plus less for utilities, etc.

Anonymous said...

is this sarcasm?

mayor mcmansion said...

If you do decide to rent a house, look for one that's energy efficient otherwise the utility bills might surprise you. Older houses that have been rented for many years usually don't have energy efficient modifications because the owners weren't paying the utility bills. If you are renting one of those older homes, time to look for one that's more energy efficient - they've been building lots of them!

keith said...

I didn't just say "house" folks - I said "condos and lofts" too

Some nice ones out there for less than apartments are going for

Check out craigslist for starters

Anonymous said...

Leaving an apartment owned by a company to rent a house owned by someone who likely has a nasty ARM is just begging for YOU to get kicked out on the street with little or no warning. Keith, you're a pretty smart guy you should be able to think logically on this. Are you really sure you should be advising people to rent from owners who may be facing foreclosure?

At any moment you can be kicked out with little or no warning. In most states mortgages are non-recourse debts which essentially mean the bank can't go after the mortgage holders assets.

Long story short if your the owner and your loan is upside down and the property has a non-recourse mortgage why wouldn't you just walk away?


Renters are getting kicked out by banks all over the country.


No one is safe.

Anonymous said...

So get out of your apartment complex, and go find yourself something nice for cheaper.

Nope, not for me. I'm happily living in an oceanfront unit that has full gym, A/C, cable TV, sauna, valet, concierge, pool, jacuzzi, gated and private parking, 7 minutes from work, etc, etc, etc...all included in the $900 / month rent. Also, my electric bill is only $30, and my gasoline bill is just $60 / month. Gotta know how to play the system.

keith said...

where is this oceanfront unit for $900?

I take back everything I said. Sounds nice!

Anonymous said...

Anonymous said...
Yeah - excellent advice. Go rent a house, sign a lease, get comfortable, then keep a watch out for the sheriff coming to kick you and yours to the curb when Stressed Homeowner gets foreclosed.

I mean use a wee bit 'o logic here ... if Mom and Pop Housedebtor have to subsidize your rent in an age of plummeting real estate values, how long can they/will they keep that up?

Chances are, anyone in the postion of being underwater on a house they aren't even living in doesn't make the soundest financial moves. I wouldn't even want to rely them when it comes to housing myself and my family.

November 06, 2007 8:44 PM
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Go with a pre-bubble buyer/LL to hedge against being named as a party to a foreclosure. Yes, you are a defendant to foreclosure even if your just a tenant. You have a leasehold to the property which give you rights of possession and use. Those rights were conveyed to you via contract (lease) by the owner. However, if the rights of the owner are to be properly and fully extinguished they you must be joined as a party, otherwise once they are done w/ the owner/LL then they will have to come after you. Most banks will just harass you until you up and leave. If you do get named to the foreclosure suit and it goes through, then you will get usually 30-60 days from judgment to move.

If you do not want competitive rent, then go with a professionally operated property. I toyed with it, but b/t their inflated rent, BS fees and seeing their regional HQ across the street all nice and shiney, I said why should I be nickeled and dimed so they can have such a nice huge corp. HQ.

So I rented from a pre-bubble buyer who has owned the place for over 20 years and is emotionally attached to the home. They just put 15k into the place and plan on keeping it as a rental for the long term and want a tenant that will not bother them & pays on time.

I looked at one place that was a private LL, purchased at the peak and rent he charges cannot cover 1/2 the monthly mortgage payment. So stay away from negative cash flow LLs, they are unstable and will fight you hammer and tong for any repairs and you just might get caught up in a foreclosure.

Do your home work and remember just like a buyer you have all the power until your sign. Make all your demands up front and get them in writing. Private is the way to go if you want to save money and/or get more for your rental dollar. So far so good and I am building equity every day that I do not rent by saving the delta b/t monthly rental payment vs. PITI payment (adjusted for tax benefit) in addition to the fact that the money I would have spend on a down payment is generating investment income and its not being eroded by housing depreciation!!!

Anonymous said...

Problems with renting a house:

1. Utility bills will eat you alive
2. Usually freaking far away from your job. Long commutes and expensive gas/wear & tear bill. (If you step in a dealer or mechanic right now for car service, they will f*ck you up because nothing is selling and most mechanics are crooks)
3. Landlord is probably a flipper who is about to get foreclose.
4. If house is a failed flip, chances are that the work done is crap, just like the half-a$$ job that flippers do on the "Flip That House" show, to save a buck at everybody else's tab.
5. Good luck with your Mexican/Cuban/Asian family of 25 people living next door.

Anonymous said...

Anonymous said...
Leaving an apartment owned by a company to rent a house owned by someone who likely has a nasty ARM is just begging for YOU to get kicked out on the street with little or no warning. Keith, you're a pretty smart guy you should be able to think logically on this. Are you really sure you should be advising people to rent from owners who may be facing foreclosure?

At any moment you can be kicked out with little or no warning. In most states mortgages are non-recourse debts which essentially mean the bank can't go after the mortgage holders assets.

Long story short if your the owner and your loan is upside down and the property has a non-recourse mortgage why wouldn't you just walk away?


Renters are getting kicked out by banks all over the country.

No one is safe.

November 06, 2007 9:48 PM
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FYI, tenants do have rights both in foreclosure and under the lease.

JWM in SD said...

"At any moment you can be kicked out with little or no warning. In most states mortgages are non-recourse debts which essentially mean the bank can't go after the mortgage holders assets."

Now, now DouchBag Anonymous Poster, stop trying to use FUD to scare people here. You do realize where you are posting right? Regulars here do not get startled so easily. Victory is in air for those of us who didn't participate in the mania and we are not going to give up now.

Anonymous said...

3600 sq ft-480 sg feet of patio-Pool-Jacuzzi-Exercise/Weight Room-No yard work-One call fixes all-Secured parking for 4 cars-Absolutely the best neighborhood and location in town. Some of us have plenty of money and rent an apartment (cheap it ain't) because it's convenient and the homes for rent are crap in comparison. I can understand the desire for a house for a young family but our kids are gone and we can afford to not deal with a house. I am also dealing with a professional experienced well funded business as my landlord, not some idiot about to be foreclosed on. When you rent these "great deals" on homes that no one will buy are you asking the landlord to fill out a credit check? Do you charge him $30 to check ouy\y his ability to hang on to the house-yeah-good luck on that one.

Anonymous said...

mammoth,

amen about Seattle and Frank. This is so typical on HP. Not just Frank either but by many posters. Every place sucks. Phoenix sucks. Las Vegas sucks. Dallas sucks. Florida sucks. Seattle sucks. Atlanta sucks. Basically everywhere except where Frank or his kind live sucks.

You can find fault with any city and every state in the country. The weather is awful at some time of the year just about everywhere. It's hot as shit in Phoenix in July. Rainy in Seattle in winter. Bitter cold in Minneapolis. Tornadoes in Texas. Floods in the midwest. San Diego...great weather, except you have fires every couple of years. And on and on. I challenge anyone to show me a city/area where there is never bad weather.

Anonymous said...

mayor mcmansion said...

If you do decide to rent a house, look for one that's energy efficient otherwise the utility bills might surprise you. Older houses that have been rented for many years usually don't have energy efficient modifications because the owners weren't paying the utility bills. If you are renting one of those older homes, time to look for one that's more energy efficient - they've been building lots of them!

November 06, 2007 9:32 PM

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Wow that describes my situation perfectly. I rent a really nice house. But it's old with old windows, doors, insulation, etc. My a/c bills were around $400 a month this summer and I can only imagine what my heating bills will be this winter. I didn't even think of checking for things like quality of the windows when looking. When the lease is up in March and I look for something else, it will be at the top of my list. Oh well, live and learn.

Anonymous said...

I am renting in the 94041 - aka Google country. My apartment is walking distance from my job and I have no desire to pay more than the $605 per month that is my share of the rent that I split with my GF. Good luck finding any house to rent for less than $2500 per month in this neck of the woods. House prices are still going up.

42 said...

Rents in the Boston area are still in I-wish range and some of us actually like living in a well-managed apt building: no snow shoveling, underground secure parking, free heat, etc. you can't get a SFR in the city for sane prices and if that's your thing you'd better like sitting on the T or in traffic.

Anonymous said...

Other than convenience (i.e., you get a job transfer and have 2 days to find a place to live), I don't know why anyone would continue to live in apartments.

Several reasons:

- Less maintenance and lower rental insurance costs
- Cheaper utilities
- Less likely to be a crime target (apartments in large complexes are harder to target and often not worth the effort)
- 24hr repair services and onsite management
- Often situated in areas with more nearby ameneties (especially when living in a city)

Anonymous said...

I wouldn't mind moving out of this condo. The posh places are pretty pricey, though. And moving's a pain.

Frank@Scottsdale-Sucks.com said...

Scottsdale sucks, Seattle sucks…does every place suck to you, except for southern California? Well. o.k., everybody is entitled to their own opinion, I guess…remember Aesop’s fable: “The Six Blind Men and the Elephant?”

I've been to plenty of places I really like ... Chicago especially comes to mind, Minneapolis, parts of Texas ... there are plenty of nice places. Yes the weather sucks everywhere I've mentioned which is why I don't live in any of them.

The one time I spent a week in the Seattle area I was in Redmond where the people were pretty similar to Scottsdale (less pretentious, but grumpier thanks to the weather). People in Seattle proper seemed better but everyone was still grumpy and had the empty vacant stare.

What really stands out in my mind was how completely dead the food & drink establishments were in Seattle on a Friday night. That blew me away. Then I learned that everyone spends their Friday nights sitting in Starbucks with a laptop.

It figures you would like the two places I dislike the most.

Anonymous said...

A coworker just indicated that he just signed a lease on a 2 bedroom apartment in metro DC for 2300/month- he wasn't too happy when I indicated that I currently rent a 3 bedroom, 3 1/2 bath townhouse for 2500/month, which is still way too much, but hey.

TM said...

Arlene stated it perfectly.

The very last thing I need in my life is somebody else's drama, and that's just what I fear I would get renting a house/condo/loft in this market.

I really don't want to move in, just to have to move right back out as the nice men in uniform come and post official-looking documents on the front door.

I fear I would get a Casey Serin-type flipper for a landlord. Now, just picture trying to get your deposit back from someone like Casey Serin at the end of the lease.

My apartment is fine for now, thanks.

Anonymous said...

For all the dopes dolts and douchebags that keep spewing the fear of being kicked out of an FB's rental by the bank...

repeat after me...

CASH FOR KEYS

CASH FOR KEYS

CASH FOR KEYS

a savvy HPer can actually MAKE money if they rent from an FB.

Anonymous said...

I would, but since I'm a single guy going thru grad school, I have no need for the additional cleaning duties and higher utilities. Besides, I'm 5 minutes from work and the university

Anonymous said...

Yeah - excellent advice. Go rent a house, sign a lease, get comfortable, then keep a watch out for the sheriff coming to kick you and yours to the curb when Stressed Homeowner gets foreclosed.

Hey Realtwhore, SHUT THE F#CK UP with the Sheriff bulls#it! For the upteenth time IT DOES NOT HAPPEN THAT WAY! You get Due Process before you have to move out. No one in their right mind would ignore a court order to move out and wait for the sheriff to knock on the door... Except someone as dumb as YOU!

Anonymous said...

Why live in an apartment?

free maintenance
free security
low utility bills
mobility
new home every few years


Why would two people need a 4 bedroom 3 bathroom house and the extra costs associated? At this rate, I can retire at age 40 while the homedebtors are bankrupt at age 60 because of flip flopping in RE.

Anonymous said...

My first year of grad school, I rented the top floor of a house from a wannabe investor. Repairs took days or weeks, snow was never removed, and nightmare neighbors on first floor made my life a living hell.

This year I am renting in a building with 40 apartments that is owned free and clear. The owner does credit and criminal checks on all prospective tenants, so no illegal mexicans or section 8. On-site management does repairs within hours, building is clean and well maintained.

Mammoth said...

“What really stands out in my mind was how completely dead the food & drink establishments were in Seattle on a Friday night. That blew me away. Then I learned that everyone spends their Friday nights sitting in Starbucks with a laptop.

It figures you would like the two places I dislike the most.”
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Seattle has a lot of nightlife, but that doesn’t mean EVERYONE who lives there is into partying away their weekends like they were a 20-something. And not EVERYONE spends their Friday night sitting in Starbucks with a laptop.

Some of us enjoy other activities for entertainment, you know, so please cool it with your generalizations. Sheesh!

BTW, never been to Scottsdale and no desire to go there. Minneapolis is great in the summer, but the mosquitoes in Northern Minnesota suck.

-Mammoth

Flagg707 said...

"Yes, that's right leave that apartment and find a house. All of mine are rented, the renters are nice people, but I sometimes feel sorry that they are paying off the properties for me. I did see in santa rosa, ca that rents are going up because people need a place to live and they are waiting to buy. Best of luck out there, if it gets as bad as all the doomers are chanting we'll all be in trouble."

Glad to help. Have fun with paying the property taxes as local governments get desparate for revenue. Thanks for taking care of the water heater and the roof. I'll be saving my money all the while.

I've been a homeowner in the past. I'll be a homeowner in the future - once the calculations of costs and cash flow move back from making renting a better deal than owning. Until then, I'm calling it like I see it and putting my money where my mouth is (and in savings).

Anonymous said...

Why would two people need a 4 bedroom 3 bathroom house and the extra costs associated? At this rate, I can retire at age 40 while the homedebtors are bankrupt at age 60 because of flip flopping in RE.

November 07, 2007 8:14 AM

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Hey genius, please tell me how you are gonna retire in a bankrupt society? You think there is a safe room on the Titanic?
This whole system is doomed. It cannot not be maintained in it's current form.
Youre an idiot if you think all you have to do is "guess" correctly.