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in MOST CASES (not all markets.... Some have too many rental properties and it's cheaper than buying... This equalizes in time) you ARE paying for all these expenses.... It's just in one big check every month called "rent" (+ profit to the homeowner)
Otherwise there would be no landlords!
Depends. If you buy a house for the same price as the landlord paid/is paying, this is true. But if the landlord bought the place years ago, the LL may well be able to rent out a place for a rate that covers all his/her ownership expenses for less than you would pay in total ownership expenses if you bought a similar place tomorrow. Even with my equity from my previous house, I would be unable to buy a comparable house where I am living now. And smaller LLs frequently keep the rent below the going rate in order to keep a good tenant.
It also depends on how able/willing you are to do your own repairs. I'm retired, and I simply don't have the energy and inclination to work on a house anymore.
It is really hard to generalize about this, because there are significant advantages to both renting and owning. It depends entirely on the local market and your own plans.
Buying a home on a rented lot is renting not buying. You are not buying land you are buying a vehicle that can't be moved because it will become worthless and not park will take the eyesore.
All you can advise her to do is get all her neighbors to put in bad reviews to warn others, Eventually when tenants die and they can't sell the old properties because the lot rents are too high they will have to so something about it.
I'm not casting any aspersions on the trailer park owners. They are in a legitimate business at fair and competitive market prices, providing a service at reasonable cost to people who need or want it. You got a mobile home that needs a serviced location, and they rent you one and plow the street. It's the free market we've all been indoctrinated to be so proud of, and trailer park operators are no better or worse than the occupiers of any other market niche, from dentists and bankers to tax preparers and trash collectors.
Depends. If you buy a house for the same price as the landlord paid/is paying, this is true. But if the landlord bought the place years ago, the LL may well be able to rent out a place for a rate that covers all his/her ownership expenses for less than you would pay in total ownership expenses if you bought a similar place tomorrow. Even with my equity from my previous house, I would be unable to buy a comparable house where I am living now. And smaller LLs frequently keep the rent below the going rate in order to keep a good tenant.
It also depends on how able/willing you are to do your own repairs. I'm retired, and I simply don't have the energy and inclination to work on a house anymore.
It is really hard to generalize about this, because there are significant advantages to both renting and owning. It depends entirely on the local market and your own plans.
I get your point but really I think market rent is market rent. Say I own a place free and clear, my only real expense is property taxes. Say places on my block are renting for $1500. Am I going to rent to you for $400 a month just because that's my nut? No of course not I'm going to charge $1500 and make more profit.
Granted if I want the place rented maybe I'll be more willing to drop to $1300 or $1400 if soemone seems like a good tenant and tries to negotiate but no landlord is going to go lower than market rent just because they only need such and such amount to cover their nut.
Depends. If you buy a house for the same price as the landlord paid/is paying, this is true. But if the landlord bought the place years ago, the LL may well be able to rent out a place for a rate that covers all his/her ownership expenses for less than you would pay in total ownership expenses if you bought a similar place tomorrow. Even with my equity from my previous house, I would be unable to buy a comparable house where I am living now. And smaller LLs frequently keep the rent below the going rate in order to keep a good tenant.
It also depends on how able/willing you are to do your own repairs. I'm retired, and I simply don't have the energy and inclination to work on a house anymore.
It is really hard to generalize about this, because there are significant advantages to both renting and owning. It depends entirely on the local market and your own plans.
Yep, I covered that already.
Of course, thought your life (if your a homeowner) you will benefit from the same thing, or a renter, will suffer from the same thing. (which I also already covered.)
Regarding being a landlord - rents go up and down. So, there is no guarantee you'll be able to make that mortgage payment or that the rent will cover all expenses and upkeep.
A good example is when the market crashed. I was a resident manager at the time in the SF Bay Area, and we lost 25% of our renters all of a sudden who had lost their jobs. We had to lower the rents significantly, to get the place full again. Then we figured out a different market that allowed us to raise rents a bit more (students at the nearby university that the owner did not previously want to rent to).
Then, we lost a bunch of tenants who all of a sudden were able to buy homes because housing prices went way down.
Then, the people who'd lost their homes became renters and there was a huge demand again for rentals. And then the economy picked up and rents are now through the roof in that area.
But, my point is that landlords need to be able to weather the storms of ups and downs. I believe that eventually, when the mortgage is paid off, that the long term investment will show a profit. But, it can't be counted on and isn't for the faint at heart.
There are so many variable to this question that it certainly can't be answered easily. Many times people make the wrong decision, they buy and then must move and lose a fortune. Sometimes they choose to rent, and rents double over a few years, and they lose a fortune in potential equity.
There are wealthy people that borrow a million dollars and just pay interest for 7 to 10 years. If the value of the home increases at a high rate, they lose nothing. If it takes a huge loss, they must refinance at very unfavorable terms.
Regarding being a landlord - rents go up and down. So, there is no guarantee you'll be able to make that mortgage payment or that the rent will cover all expenses and upkeep.
A good example is when the market crashed. I was a resident manager at the time in the SF Bay Area, and we lost 25% of our renters all of a sudden who had lost their jobs. We had to lower the rents significantly, to get the place full again. Then we figured out a different market that allowed us to raise rents a bit more (students at the nearby university that the owner did not previously want to rent to).
Then, we lost a bunch of tenants who all of a sudden were able to buy homes because housing prices went way down.
Then, the people who'd lost their homes became renters and there was a huge demand again for rentals. And then the economy picked up and rents are now through the roof in that area.
But, my point is that landlords need to be able to weather the storms of ups and downs. I believe that eventually, when the mortgage is paid off, that the long term investment will show a profit. But, it can't be counted on and isn't for the faint at heart.
Anyone that thinks otherwise should check out this thread:
Depends on your location and the current real estate conditions in your area. Here we are in a real estate boom, with prices rising over 25% in most zip codes locally. We also have a housing shortage and so there's many more buyers than sellers which would make it way more effective to buy than to rent. Example if you bought a home in my town in 2013 for 300,000. Today it could easily be worth $375,000 which is not a bad turn-around for a two year investment. Talk to a local Realtor and have them analyze your market and that should help you weigh the differences between renting and owning.
from all of the give and take, it looks like it comes down to the individual, more than even the location and market conditions.
Can a person with no savings and lower to middle income really live in a house and service and repair it reasonably well? i dare say, in most bigger US cities, the answer is no. But take that same income and move them to a rural area, and rentals might not be available, so they will have to buy. And often, much more affordably than in that city.
I've paid the mortgage religiously on two properties, one for 2 years in Charlotte, then near Birmingham, AL. the Charlotte home was a good move by me. It appreciated enough to cover what i spend on interest and taxes and the mortgage was low enough to beat out what I might have paid in rent.
Near Birmingham, i've had precious little appreciation in 11 YEARS. I expect when i sell, maybe i'll settle on a price after closing costs, approx what I bought it for. sad. Now, I have a tad of equity, but I have to avoid agents like the plague for that to happen.
I agree with you, renting for most is more frugal. I found out from experience too after owning 2 homes during my life- owning a house turns into a money pit owning ME!
Never again. From now on, I just "borrow" other people's property for a while. Easier for me and when something breaks I smile cuz it's not on my dime anymore... YEAH!
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