Is the rental market getting crazy? (Chicago, Manhattan: sales, mortgage, home sales)

[long101]

Originally Posted by BRU67

Now, they're paying 1,900 per month for something they could probably buy for 75k minus a ton of first time buyer incentives.

Thats obviously not true. I'm looking at places in the $325k range that would probably rent for $2-2500 a month

[rparz]

Originally Posted by jwaiter

Things aren't that black & white. I have a 2 bed/2 bath condo and my monthly mortgage pmt is significantly lower than you could rent the same size unit in the same area. The reason is lending rates are the lowest in history.

What about after you add property tax (yikes) and insurance, and Condo Assesments. (If applicable)

[Vlajos]

Originally Posted by hindukid

I think his general point though is correct. People are behind the times and seem to follow the trend more than common sense. It was silly to buy before when rent was less than half of a mortgage payment. Now rent is significantly more and people are once again slow to adjust. With rates where they are, if there was ever a time to buy its now.

10 years from now it will probably be the opposite. We will be on a continuous rent/buy seesaw until people get smarter. When people get smarter we will get an equilibrium.

And that will never happen.

[uffthefluff]

Rents are definitely up. This is happening in most cities right now I believe. Lots of people either cannot afford to buy or cannot get financing, so they have to pay whatever landlords are charging. There's also less supply of rentals due to all the condo conversions/slowed construction activity and there is a fear of buying to boot. It all adds up to higher rents.

[Drover]

I guess my landlords are just exceedingly reasonable people seeing how my rent has only gone up 6% in 6 years.

[emathias]

Originally Posted by Drover

I guess my landlords are just exceedingly reasonable people seeing how my rent has only gone up 6% in 6 years.

If you have a smaller landlord, having a quality tenant is usually worth quite a lot. Churn, damage and missed months of rent can destroy the value of any increase in rent pretty quickly.

[rparz]

Originally Posted by emathias

If you have a smaller landlord, having a quality tenant is usually worth quite a lot. Churn, damage and missed months of rent can destroy the value of any increase in rent pretty quickly.

Truth, why I haven't raised my rent and don't plan to. (barring a substantial jump in property tax)

Good tenants that pay on time and take decent care of the place are worth their weight to keep happy. Probably a perk of renting from a private owner as opposed to some corporation.

At the end of a day it's a business, need your customers as much as they need you.

[Drover]

Originally Posted by emathias

If you have a smaller landlord, having a quality tenant is usually worth quite a lot. Churn, damage and missed months of rent can destroy the value of any increase in rent pretty quickly.

I suppose paying the rent early 60-some times in a row will put you in good graces with your landlord.

I also had the good fortune to find a landlord who bought the building in the 60s -- which is to say, owns the building outright and didn't pay much for it to begin with -- so it doesn't take a lot to get positive cash flow out of it.

[jman07]

Originally Posted by rparz

Truth, why I haven't raised my rent and don't plan to. (barring a substantial jump in property tax)

Good tenants that pay on time and take decent care of the place are worth their weight to keep happy. Probably a perk of renting from a private owner as opposed to some corporation.

At the end of a day it's a business, need your customers as much as they need you.

Very true. I had my landlord offer to cut my rent in half so I wouldn't move back home when I lost my job. I never pay late and he has never raised my rent.

[andrew61]

Originally Posted by jahk

I also followed the advice I'd heard to walk around the neighborhoods and look for 'for rent' signs. I only remember seeing 1, and in a neighborhood too far from work. When I've visited Chicago in the past, I'd see rental signs all over.

I'm not sure what neighborhoods you're looking at, but in the areas where I walk around most frequently -- Lakeview, Lincoln Park -- I'm still seeing plenty of For Rent signs... although I have noticed that some buildings that "always" have vacancies available this time of year don't seem to have any this year.

Although rents are going up all over, due to factors which have already been mentioned, whether or not this year's market is "crazy" likely depends a lot on what part of town you're talking about.