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Old 03-18-2011, 06:58 PM
 
Location: North Dakota
394 posts, read 1,047,053 times
Reputation: 230

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Chris,
How is anyone being "screwed"? They have a product to sell, and they have buyers / renters at that price. It is called free market. Yes it is all about making a buck. Just like people moving to Williston to make good money. If they weren't greedy they would stay where they are and make less money.

And ask those real estate developers and bankers how things went in the 80's. Many built apartments, and trailer parks, and it sank them in a few years when the boom went bust. So when you are in a volatile market like Williston you better make it while you can, because who knows what the future brings.

Ask yourself this, if it is so easy to make money in the oil patch with property why hasn't demand caught up?
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Old 03-18-2011, 07:11 PM
 
2,607 posts, read 3,707,202 times
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Quote:
Originally Posted by Corbay View Post
I've met quite a few people from Williston who HATE what landlords/property owners are doing right now.

And yet people still rent it from them, which means that is what the market bares. If the prices are too high and people cannot afford it, then it will sit empty.

You see the landlord is in the business to make money. Just like a farmer who chooses to wait until wheat hits $10 before he sells. I suppose he could have sold it at $6 to be a nice guy, but he is in business to make money. Now my cost of food has gone up. I guess the farmer must be greedy too.

And how about the kid right out of high school who goes to work in the patch making 80K a year. Shouldn't he just tell the boss he is fine making less. After all that is a lot of money.

What you have in the oil patch is hyper inflation. Everyone is making money while they can.
Actually... a lot of people aren't renting from them. What's happening is if an owner/landlord can't get what they want from your regular Joe's for the apartment they go to oil companies and rent to them. Oftentimes oil companies will contact the owner or landlord before your average person does.

Granite Peaks is building apartments and their primary goal is to rent to oil companies, not to people. The focus is shifting from renting to families to renting to companies who will pack as many guys into a place as possible and who's #1 priority isn't keeping the place nice.

Inflation is to be expected, landlords and property owners have the right to raise the price of rent - to an extent. At a certain point I believe it becomes abusive and would be considered price gouging. Williston surpassed that point quite some time ago.

I'll use a gallon of milk as an example. In 2008 the average price of a gallon of milk was $2.74. Right now in Williston a gallon of milk is almost $5 a gallon at WalMart, that's an increase of 80% over 3 years. Now let's look at housing. The median gross rent in 2009 in Williston, ND was $468. Finding a place to rent for that amount in Williston no longer exists. Based off of the figures I've seen that number is closer to $2,000 today. That's an increase of over 400% in 2 years. That, in my opinion, is price gouging and the state's Attorney General is doing nothing to protect tenants in this state.

Same goes for housing prices...

http://www.city-data.com/city/Willis...th-Dakota.html

They've increased rapidly here.
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Old 03-18-2011, 07:15 PM
 
2,607 posts, read 3,707,202 times
Reputation: 1830
Quote:
Originally Posted by Corbay View Post
Chris,
How is anyone being "screwed"? They have a product to sell, and they have buyers / renters at that price. It is called free market. Yes it is all about making a buck. Just like people moving to Williston to make good money. If they weren't greedy they would stay where they are and make less money.

And ask those real estate developers and bankers how things went in the 80's. Many built apartments, and trailer parks, and it sank them in a few years when the boom went bust. So when you are in a volatile market like Williston you better make it while you can, because who knows what the future brings.

Ask yourself this, if it is so easy to make money in the oil patch with property why hasn't demand caught up?
It's not the same situation as it was in the 80's. The Candlewood Hotel has already paid itself off. Most of these new complexes are planned out to pay themselves off between 2-5 years. The amount of rent they are charging for rooms and apartments up here is making it so that you are paying off your investment in a few years. I've asked the real estate developers, this is how I know.

As for your final question... didn't you know that we're in the middle of a recession? Sure, Williston is doing GREAT and hasn't felt a lot of the consequences of this recession, BUT the local banks and credit unions are still tight with their lines of credit. Loans are still incredibly difficult to get here because, despite how this area is doing, the rest of the country is doing horribly and it's VERY difficult for people to get financing for just about anything right now.
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Old 03-18-2011, 08:18 PM
 
Location: 125 Years Too Late...
10,296 posts, read 9,975,609 times
Reputation: 9074
Quote:
Originally Posted by Corbay View Post
Chris,
How is anyone being "screwed"?
We're coming at this matter from two very different opinions. Anyone charging me $3000 a month in any small town like Williston is screwing me. I simply will not pay that because it's ridiculous. I guess I'm not just all about money, because I'd feel pretty sleazy charging others that price if I were a landlord. I simply wouldn't do it. My sense of decency would get in the way. I do believe in the free market system (not necessarily the modern interpretation of capitalism). But I do not believe in usury. I'll bet you're totally cool with 500% APR interest at payday loan sharks as well...

Really, there is no point of arguing about it. We both have our opinions and certainly have two different life philosophies.
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Old 03-18-2011, 08:23 PM
 
Location: North Dakota
394 posts, read 1,047,053 times
Reputation: 230
So once again we are back at the situation where the units are being rented. Doesn't matter weather it is an individual or an oil company. SOMEONE is paying the landlord what he wants for rent. Which is what we call the free market.

Now of course it is easy to say rents are too high, and the knee jerk reaction is to want lawmakers fix the problem, but they will only make matters worse. Rent controls only hurt the situation. It will stop developers from coming into a boom town and building. If they can't make a quick return on their money in what is considered a hight risk market, they will stick that money elsewhere, and then you have no new units being built. At the end of the day the market will correct when supply catches up with demand. At that point rents will be forced to come down.

I am well aware of the financing situation as I am in the real estate business in another part of the state. I have had to deal with it first hand.
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Old 03-18-2011, 08:32 PM
 
Location: 125 Years Too Late...
10,296 posts, read 9,975,609 times
Reputation: 9074
I recently bought a good sized building lot in the eastern part of North Dakota for less than a week's rent in Williston. What that means to me is that I can work a job that pays two or three thousand dollars less per month and be better off overall than someone who has a high-paying job, but it's all being eaten up in rent and inflated food prices. So I can make $30,000 less a year and be doing better financially in the long run. Seems sort of pathetic to me. It isn't much of an incentive to go fill all those jobs in Williston. What good is 60 K a year when you can actually live better on 25 or 30 K elsewhere? That kind of "big money" certainly doesn't appeal to me.
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Old 03-18-2011, 08:40 PM
 
Location: North Dakota
394 posts, read 1,047,053 times
Reputation: 230
We're coming at this matter from two very different opinions. Anyone charging me $3000 a month in any small town like Williston is screwing me. I simply will not pay that because it's ridiculous.

See what you are doing is affecting that market, you refuse to pay the high rents, and thus have put less pressure on the market. That is what will bring the rents down (which is going to happen eventually)

I guess I'm not just all about money, because I'd feel pretty sleazy charging others that price if I were a landlord. I simply wouldn't do it.

Easy to say that when you are on your side of the equation. If you had a family with a couple of kids, a whole lot of debt from trying to stay afloat for a lot of dry years in Williston, and now had a chance to truly change you life, I bet you would.


My sense of decency would get in the way.

Once again easy to say. If you held the winning million dollar lottery ticket in your hand would you feel guilty that the money to pay the winnings came from a lot of poor saps who didn't win?

I do believe in the free market system (not necessarily the modern interpretation of capitalism). But I do not believe in usury. I'll bet you're totally cool with 500% APR interest at payday loan sharks as well...

I don't believe in unscrupulous deals, but if everything is in black and white and agreed by both parties then yes they can charge 500%. NOW what I have a problem with is the game being changed by one party and the other has no say, such as with credit card companies jacking rates for no reason.

You see some in the oil patch will make a ton of money driving truck, the next maybe selling food, the next doing repairs on equipment, some with oil wells on their land, and of course the workers make way above average pay. So everyone is cashin in. But the landlord is the evil one for making money?

By the way I consider this debate, I am not trying to flame you, or anyone else. Just trying to show there are 2 sides to every coin.
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Old 03-18-2011, 08:44 PM
 
Location: North Dakota
394 posts, read 1,047,053 times
Reputation: 230
I recently bought a good sized building lot in the eastern part of North Dakota for less than a week's rent in Williston. What that means to me is that I can work a job that pays two or three thousand dollars less per month and be better off overall than someone who has a high-paying job, but it's all being eaten up in rent and inflated food prices. So I can make $30,000 less a year and be doing better financially in the long run. Seems sort of pathetic to me. It isn't much of an incentive to go fill all those jobs in Williston. What good is 60 K a year when you can actually live better on 25 or 30 K elsewhere? That kind of "big money" certainly doesn't appeal to me.


I totally agree, and hence the reason I don't live in Williston, or plan on moving there any time soon. Yes there is money to be made, but you pay most of it back out.

I knew someone who worked out there for 2 years as a master electrician, making over 125,000 a year. He was single, lived in a 5th wheel, and two years later left with nothing much to show for it. Now of course he had some habits that were expensive, but that is another story.
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Old 03-18-2011, 08:53 PM
 
Location: 125 Years Too Late...
10,296 posts, read 9,975,609 times
Reputation: 9074
Quote:
Originally Posted by Corbay View Post
I knew someone who worked out there for 2 years as a master electrician, making over 125,000 a year. He was single, lived in a 5th wheel, and two years later left with nothing much to show for it. Now of course he had some habits that were expensive, but that is another story.
Yes, I'm sure certain habits could eat all that cash up pretty quickly!
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Old 03-19-2011, 09:24 AM
 
2,607 posts, read 3,707,202 times
Reputation: 1830
Quote:
Originally Posted by Corbay View Post
So once again we are back at the situation where the units are being rented. Doesn't matter weather it is an individual or an oil company. SOMEONE is paying the landlord what he wants for rent. Which is what we call the free market.

Now of course it is easy to say rents are too high, and the knee jerk reaction is to want lawmakers fix the problem, but they will only make matters worse. Rent controls only hurt the situation. It will stop developers from coming into a boom town and building. If they can't make a quick return on their money in what is considered a hight risk market, they will stick that money elsewhere, and then you have no new units being built. At the end of the day the market will correct when supply catches up with demand. At that point rents will be forced to come down.

I am well aware of the financing situation as I am in the real estate business in another part of the state. I have had to deal with it first hand.
I've worked in real estate for several years, my dad is a licensed realtor in 2 states and I'm considering getting an inspection license here in North Dakota.

It's not a knee jerk reaction to want lawmakers to fix the problem - many states already have price gouging laws to prevent situations like what's going on here in North Dakota. It's about protecting consumers, something the attorney general of this state should be doing, but he's not.

You say rent will be forced to come down, but I recommend you take a look at Rock Springs, WY. They went through a similar situation as Williston and even after housing caught up rent and the cost of living remained high, even when the recession struck and companies like Schlumberger and Halliburton laid off more than half their employees.

Being in real estate, you should know more than anyone that a free market (especially with housing) may not be the best answer. Or did you not realize how we ended up in this recession?

Quote:
I don't believe in unscrupulous deals, but if everything is in black and white and agreed by both parties then yes they can charge 500%. NOW what I have a problem with is the game being changed by one party and the other has no say, such as with credit card companies jacking rates for no reason.

You see some in the oil patch will make a ton of money driving truck, the next maybe selling food, the next doing repairs on equipment, some with oil wells on their land, and of course the workers make way above average pay. So everyone is cashin in. But the landlord is the evil one for making money?
None of us have said that landlords shouldn't be able to raise the rent. The problem is it's to the point where it's no longer affordable for most people including ones working in the oil field. Starting pay for most positions puts someone at about $60,000 a year here, some make more than that and some make less, but that's about an average. (I'm extremely familiar with what a lot of these companies pay as I've worked with over 30 of them.) Is $60,000 a year above average pay? Sure... but is it enough for the average person up here to afford $2-$3,000 in rent? No, it's not. I'll break it down for you so you can understand.

Let's say the person making $60,000 a year is married with 2 children. They are hourly, not salary, and a lot of their money comes from overtime. Overtime is taxed at a higher rate, so he's really netting $50,400 (taxed him at 16%), also he pays $200 a month for benefits for him and his family (a VERY low estimate) bringing his yearly income to $48,000, which is $4,000 a month. Now, because we're in a recession most of the people coming up here have been unemployed or underemployed for quite some time. Because of this, let's say Bob has $200 a month in loan and credit card payments because he hasn't been making enough to actually support his family over the last few months (or longer). Then there's other bills, a car payment of $300 (they only have one car between them), car insurance of $100 (they're good drivers), cell phone which is $100 (let's say they have the cheapest plan ever), gas for the car is $150 a month (VERY low estimate), groceries are $500 a month (we spend more than that on a family of 3 so that's a low estimate as well), and utilities of $180 a month. I've low balled a lot of these figures to give you the benefit of the doubt... so what is Bob left over with to actually pay rent with? He's left with $2,470 meaning that he cannot afford to rent anything with 3 bedrooms (if he has a boy and a girl that may be a problem) and he MIGHT be able to find something with 2 bedrooms.

You state you don't believe in unscrupulous deals but the price of rent here has been raised so high because of companies renting properties from landlords and owners, artificially raising the price to a point where your average person in Williston cannot afford to actually live here. What part of that is not unscrupulous? If you're truly concerned about protecting tenants and consumers then you wouldn't be OK with a 400% inflation in rent caused not by renters who you assume can afford these rents (because as I've clearly shown they can't) but by oil companies who can afford to pay high prices.
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