EPTHousing/Rent/Mortgage/Land Ownership Discussion Thread - P…
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Siveron
United States3 Posts
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LegalLord
United Kingdom13775 Posts
For most of the start of the year, it seemed like a mania akin to 06/07 - after a 10% increase in 2020, it looked like housing prices took another 10% rise in just a few months, and the stories of paying tens of thousands of dollars over asking price to win insane bidding wars were everywhere. In my market at least, it looks like those seem to have died down; prices are still quite elevated, but there seem to be a lot more houses available for sale, they're on the market for weeks rather than days before being sold, and some $5-50k price cuts are being made to get properties to move. Less desirable units like ugly and expensive townhouses are selling slowly rather than being picked up like everything else. Not really a crash, but at least a visible slowdown of the initial mania. Rent prices seem to be going up. About time to renew my lease (or not), and they're raising the rate by 6% this time around. This after a 0% increase in 2020 due to the ongoing troubles with nonpayment, so a little more than I'd like, lol. What's interesting is they're offering longer term leases (18-24 months), which leads me to believe that they perceive a risk of falling rent prices in the near future. Oh and of course we got the eviction moratorium in the US expiring - which made the big news lately. Making much fewer headlines is that it seems that the foreclosure moratorium is doing the same. The impact of those two things should be interesting. | ||
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Arghmyliver
United States1077 Posts
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KwarK
United States41671 Posts
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micronesia
United States24513 Posts
I had some trapezoidal windows that seemed to have water intrusion between the panes. People I spoke to generally recommended just replacing them. I worked with several companies who all said they could replace them until months later when they suddenly realized their supplier can't supply that size/shape of trapezoidal windows. Eventually I worked with a general contractor to remove the old windows and just put in some simple rectangular windows as close to the original location as possible without messing with the structural wood. While they were doing it they found termites so they had to redo the structural wood anyway, and I got termite treatment. In order to do the replacement they had to remove like a third of the siding on my house. Since my siding was getting kind of old (and had a damaged section anyway) I decided let's just replace it all at that point. While they were replacing the siding they found various other small problems I inherited from the previous homeowner that had been covered up by the old siding, so those needed to be fixed too. The wooden decorative shutters are also decrepit so we decided those should be replaced along with the siding and to better match colors. The job is just about done now and I'm over $20,000 in for what was going to be a relatively simple window replacement on one wall. Replacing the sliding glass door has been equally painful although at least the cost hasn't crept up like that. | ||
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LegalLord
United Kingdom13775 Posts
On August 02 2021 03:17 Arghmyliver wrote: Lol 6%? That's nothing, to re-sign at the earliest opportunity (lowest rate) my rent would have gone up 22%. Landlords are despicable. Yeah, it really is pretty small pennies compared to what happened to housing costs (20-30% increase here since Jan 2020, which is a lot less than a lot of other cities have had). It seems to be the case in general that renting is cheap and buying is absurdly expensive. The inevitable outcome of artificially low mortgage rates borne of money printing, I reckon. Being asked to pay 22% more is pretty jarring, though, the kind of number that a tenant would be likely to refuse on principle. Do you feel like your previous rate was well under market, or is the landlord just being greedy here? | ||
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JimmiC
Canada22817 Posts
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Zambrah
United States7004 Posts
On August 02 2021 03:39 micronesia wrote: Home ownership is such a pain in the ass. The only thing worse is not being the homeowner. I had some trapezoidal windows that seemed to have water intrusion between the panes. People I spoke to generally recommended just replacing them. I worked with several companies who all said they could replace them until months later when they suddenly realized their supplier can't supply that size/shape of trapezoidal windows. Eventually I worked with a general contractor to remove the old windows and just put in some simple rectangular windows as close to the original location as possible without messing with the structural wood. While they were doing it they found termites so they had to redo the structural wood anyway, and I got termite treatment. In order to do the replacement they had to remove like a third of the siding on my house. Since my siding was getting kind of old (and had a damaged section anyway) I decided let's just replace it all at that point. While they were replacing the siding they found various other small problems I inherited from the previous homeowner that had been covered up by the old siding, so those needed to be fixed too. The wooden decorative shutters are also decrepit so we decided those should be replaced along with the siding and to better match colors. The job is just about done now and I'm over $20,000 in for what was going to be a relatively simple window replacement on one wall. Replacing the sliding glass door has been equally painful although at least the cost hasn't crept up like that. I was kind of hoping the story ended with getting your roof redone, 'cause insurance companies will usually give you a lower rate for a new roof. Yeah though, a fuck up cascade of house maintenance sucks, doubly so when termites are involved. On the bright side, cleaning up the rough opening to fit sane people windows (trapezoidal windows??? I've seen some weird stuff with houses but I have no seen that) is going to make future window replacement significantly easier. 20K though, lordy, did you get all this done during the huge wood price inflation? | ||
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Sermokala
United States13700 Posts
At some point people won't be able to pay rent on places when their wages remain stagnant. I don't know if that's when people are trianed to think that 80% of your paycheck should go to rent or when they can't pay rent even with their whole paycheck. | ||
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micronesia
United States24513 Posts
On August 02 2021 07:38 Zambrah wrote: I was kind of hoping the story ended with getting your roof redone, 'cause insurance companies will usually give you a lower rate for a new roof. Yeah though, a fuck up cascade of house maintenance sucks, doubly so when termites are involved. On the bright side, cleaning up the rough opening to fit sane people windows (trapezoidal windows??? I've seen some weird stuff with houses but I have no seen that) is going to make future window replacement significantly easier. 20K though, lordy, did you get all this done during the huge wood price inflation? Here's what the old windows and siding looked like (they abut the interior ceiling). As far as wood is concerned, the actual amount of wood needed for the job wasn't that much. Most of the cost was the siding, the labor for the siding, the labor for installing the structural wood, the windows, and the labor for the windows. Wood materials were a small portion, as were the other minor fixes. Still, this is a nice reminder of why you need a bigger cash reserve handy when you are a homeowner. ![[image loading]](https://i.imgur.com/i5trptx.jpg) | ||
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Zambrah
United States7004 Posts
Yeah, contracting is going to have a lot of labor costs, and just readjusting a bit of the wood around the rough opening of the windows isn't much, having to deal with a cascade of labor requirements definitely sucks. Having so much important structural maintenance is why I dont ever want to own a home, if Im going to own property I'd rather have a condo tbh. Good 'ol studs inwards maintenance. | ||
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JimmiC
Canada22817 Posts
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LegalLord
United Kingdom13775 Posts
On August 02 2021 08:05 Sermokala wrote: Right now is the worst time to get a house or renew your lease. Housing markets are insane across the board and the imminent mass eviction of 2021 is going to open a lot of property that is either going to be desperate for a new renter or foreclosed on by landlords that didn't get any rent from them and can't find a new renter. Bad time to buy a house I agree; bad time to renew a lease not really. Landlords haven’t had it very good for quite a while, what with being forced to provide free lodging to the worst of tenants for a year and not seeing rent prices increase anywhere near as much as purchase prices have. At most it’s just going to blunt the only very recent momentum in favor of allowing them to raise rates. And, you know, people who don’t already own need a place to live, so choosing “neither buy nor rent” isn’t generally realistic. Gotta pick one. | ||
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JimmiC
Canada22817 Posts
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Sermokala
United States13700 Posts
On August 02 2021 11:21 LegalLord wrote: Bad time to buy a house I agree; bad time to renew a lease not really. Landlords haven’t had it very good for quite a while, what with being forced to provide free lodging to the worst of tenants for a year and not seeing rent prices increase anywhere near as much as purchase prices have. At most it’s just going to blunt the only very recent momentum in favor of allowing them to raise rates. And, you know, people who don’t already own need a place to live, so choosing “neither buy nor rent” isn’t generally realistic. Gotta pick one. If the protections for renters are going out the window that means that there are going to be a lot more vaccencies and a lot stronger market for you to find a better place. If you're still going to accept a large over inflation increase to your rent even knowing this and locking yourself in for two years you deserve to lose the money you are going to. | ||
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KwarK
United States41671 Posts
On August 02 2021 11:23 JimmiC wrote: I'm still confused why rent prices should rise as rapidly as house prices do, when they fall should rent immediately get cheaper? House value going up barely increased cost for the vast majority of landlords. It takes at least a year for even the property tax to go up and they might not even reassess. Because rent is a question of ROI. The opportunity cost of rental income is selling the property and using the capital for a different investment. When the value of the property increases the capital tied up by the property also increases and therefore the nominal required return to justify owning the rental property increases. | ||
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JimmiC
Canada22817 Posts
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KwarK
United States41671 Posts
On August 02 2021 14:53 JimmiC wrote: First your return on investment includes the amount the house went up plus the rent, it does not go down when the investment is worth more.... it would go down if you had to invest more and it didn't return more, which most people have not needed to Why would you need to sell when you can also just borrow against the new value and take advantages in gains on both? You have many more options with more equity in the home. Acting like the home going up in value some how burdened the home owner is soms far right wacky logic. But don't worry we give huge tax breaks for those poor souls who just made a Shit ton of money. I don't see why you're not getting this, it's not some wacky far right logic, it's basic maths. Let's say you buy a house for $100k cash and that you can buy a stock that yields a guaranteed 5% return p.a. Your opportunity cost is $5k/year ($100k tied up in the home * 5%). Now let's say the house goes up to $150k valuation. Your opportunity cost is $7.5k/year. If you were making $6k/year from renting the house out then it was previously a good deal for you (more than you'd have gotten elsewhere) but now it is not. You should either increase your rent or sell it. The more the house is worth, the more rent you require to make renting the house a rational use of it. If you're still not understanding why a more valuable house requires a higher rent then find a child and have them explain it to you. | ||
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RvB
Netherlands6188 Posts
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Blitzkrieg0
United States13132 Posts
On August 02 2021 15:46 RvB wrote: But nobody buys a house with cash and interest rates have gone down as well. I don't think an equal rise in rent and housing prices makes much sense when that's the case. The math doesn't change if that 100k is a down payment or a 100k house that you paid in full. There is a little drag with mortgage interest if that is the case, but you just subtract that out of your profit. The housing market in the US is so hot right now because investment firms like Blackrock are making 100% cash offers on real estate. Investment firms aren't the 'normal people' you're thinking of here, but they care even more about what is the best investment. | ||
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