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Rents are not always closely in lock-step with real estate. For instance, in many cases its a lot cheaper to rent in an area like where I live in the Bay Area- mainly because a lot of the homes were bought a long time ago and due to Prop 13, those property taxes are basically frozen. The house I rent now is about 1/3rd the cost of buying the same house in our neighborhood.
On the other hand I've been thinking about moving to Austin for years. Just doing a quick search its amazing to see that rents in that area are in many instances more than the average mortgage.
not always true. its all about what your competition does in the area.
i said that rents are based on what the landlord can charge, and what the buyer can pay. that's another way of saying 'supply and demand'. And I think it IS always true that supply and demand determines the market.
your competition could do whatever they want; if renters can't afford the prices, then they won't pay them, and things will go vacant. People need a place to live, indeed, but it is a mistake to assume that they need your place to live, or that you can pass on an unlimited amount of costs to the renters, that they will always absorb.
I struggle to understand how you could be a landlord and not agree with this; this risk seems inherent.
unfortunately having a place to live is not an expense many can choose to pay or not. when all rents in an area migrate up to a certain point a renter really has no choice but move or pay. as usually happens you just cut back somewhere else thats more discreationary especially if it a general rise in rents everywhere.
in reality whether they cut mortgage and real estate tax deductions it wouldnt effect legitamate landlords anyway.
if your reporting the income then all the expenses are all just lumped together and subtracted off the rental income anyway.
a bigger risk is more folks couldnt or wouldnt buy without getting at least some tax relief to help them and that would more then likely pressure rents upward as demand for decent rentals kick up into high gear.
just thinking about the fact that here in nyc and including the 5 boroughs no new rentals have been built since the 1970's. because of rent control and rent stabilization only low income or luxury builldings were built as rentals. everything else is co-op or condo. we would have amazing pressure on rents if people decided to rent instead of at least some owning on a grand scale.
Last edited by mathjak107; 03-29-2011 at 04:55 PM..
Since I no longer have a mortgage, I no longer want to subsidize my neighbors. Similar to how empty nesters vote against all school referendums. I'll be against those (school taxes) in another year and a half too!
BTW, if they get rid of the mortgage deduction, why not get rid of all child tax credits? Isn't that subsidizing people's life choices as well?
unfortunately having a place to live is not an expense many can choose to pay or not. when all rents in an area migrate up to a certain point a renter really has no choice but move or pay. as usually happens you just cut back somewhere else thats more discreationary especially if it a general rise in rents everywhere.
in reality whether they cut mortgage and real estate tax deductions it wouldnt effect legitamate landlords anyway.
if your reporting the income then all the expenses are all just lumped together and subtracted off the rental income anyway.
a bigger risk is more folks couldnt or wouldnt buy without getting at least some tax relief to help them and that would more then likely pressure rents upward as demand for decent rentals kick up into high gear.
just thinking about the fact that here in nyc and including the 5 boroughs no new rentals have been built since the 1970's. because of rent control and rent stabilization only low income or luxury builldings were built as rentals. everything else is co-op or condo. we would have amazing pressure on rents if people decided to rent instead of at least some owning on a grand scale.
you may be more insulated from this being in new york city, i don't know, but in most places people just move to cheaper housing. That might involve moving in with family or roomates. You get fewer households and lower demand.
if its only a few stations that raise their price you go elswhere . but if its a general demand for rentals across the country it may not be easy to find decent and cheaper in more urban areas.
un-like driving or not driving if you have a choice ,we all need a place to live..
its not anything we can argue as its only a hypothetical what if.
if its only a few stations that raise their price you go elswhere . but if its a general demand for rentals across the country it may not be easy to find decent and cheaper in more urban areas.
un-like driving or not driving if you have a choice ,we all need a place to live..
its not anything we can argue as its only a hypothetical what if.
True to a point... I heard on ABC that the ranks for Homeless continues to grow... the figure mentioned for Los Angeles was 90,000 at any one time... seems like a incomprehensible number
Then there are the areas with rent control that also skew the markets...
if its only a few stations that raise their price you go elswhere . but if its a general demand for rentals across the country it may not be easy to find decent and cheaper in more urban areas.
un-like driving or not driving if you have a choice ,we all need a place to live..
its not anything we can argue as its only a hypothetical what if.
I disagree with this as well. No matter how you slice it, you keep saying the same thing, and it isn't true. Landlords don't hold unlimited power to pass on these costs... if that was true, then what keeps landlords from tripling their rents every year, just for the hell of it?
If I rent from a guy who bought his house in 1971, and has no more mortgage, then he has the ability to lower his rent all the way down to the cost of insurance and taxes (in theory.) He isn't forced to pass on higher costs to the renter. Taxes could quadruple, and he could lower his rents, and still make a profit.
If I rent from a guy with a 2008-vintage mortgage, he's up the creek without a paddle, and cannot lower his price without paying ME to live there. Guys like him have no choice but to pass on higher taxes and insurance costs to the renter, sure.
No comparable situation exists in the gasoline markets. There are no gasoline stations whose product has a cost basis with 1971 prices.
Since I no longer have a mortgage, I no longer want to subsidize my neighbors. Similar to how empty nesters vote against all school referendums. I'll be against those (school taxes) in another year and a half too!
BTW, if they get rid of the mortgage deduction, why not get rid of all child tax credits? Isn't that subsidizing people's life choices as well?
My point exactly! I don't have kids, I'm a homeowner and the majority of my property taxes go towards school districts. I think Utah has the lowest per pupil spending ratio in the nation and parents are crying that we're not spending enough to educate their kids. Well, I don't see any of them giving up any of their child tax credits to fund the over burdened education system here. Yet there have been rumblings that some parents wouldn't mind paying higher property taxes to increase per pupil spending. Unfortunately, a property tax increase doesn't just impact parents. Why should I have to give up the one tax credit I get to claim for being a homeowner?
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