Rental Prices are Crazy High! (RANT) And how to buy auctioned houses? (how much, buying)

[groar]

yeah, i gotta say, when we were apartment hunting 10+ years ago, $500 for a 3 bedroom house in a decent area would have already seemed super cheap. we paid almost that much for a 2 bedroom apartment in greenfield in 2001 or so. i had friends at the time who were paying $800 for a run-down 4 bedroom house in a pretty bad area and that was a pretty good deal. it really sucks that lower income people are getting priced out of rentals in the metro area but that budget and wishlist is way out of whack with prices.

could you help her out with a down payment on a house? that might make more sense than buying an auction property outright (i have a friend who did that and i can get you info if you like, but i know they weren't able to look at the inside of the house before buying it), and finding a mortgage payment in that range is a much better bet.

[Retiredcoach]

Buying a three bedroom home, or townhouse, in an area that is located in a decent school district will cost you minimally $100,000 (and that would be a bargain). If you would choose to buy the home in Allegheny County, your monthly expenses could realistically include at least $250 in real estate taxes and $75 in dwelling insurance. That leaves you, as the potential landlord, with $300 per month to pay for your mortgage, maintenance, some utilities, and repairs. I guess that what I am trying to say is that if your friend is limited to paying $600 per month, she will need to either drastically lower her expectations, or find an altruistic landlord that will absorb the loss of income renting to her family.

If you have your heart set on being a landlord and a benefactor, at least your friend will be happy (for a while). Like lending money to a friend, the end result is often not what either party fully expects, and the friendship is often damaged irreparably. Good luck!

[Hopes]

Originally Posted by Love2Golf09

If she has a family of 3 or more and cannot afford at least $600 a month for rent, then section 8 housing seems to be the only option....

Because child support is considered part of her income, she doesn't qualify for section 8.

Originally Posted by Love2Golf09

outside of moving out of allegheny county. Has she considered moving to a cheaper area, like Beaver County? The City of Butler would have what she wants most likely.

She can't move too far away because of the joint custody issue. She has to live close enough for the children to commute to school on alternating weeks.

Originally Posted by Love2Golf09

Also, if you're considering buying a house for her, why not go the cheaper route and have her rent an townhouse at normal price and just spot her the remaining amount she needs every month?

That's a consideration. But I'd rather own a property outright because then it doesn't matter if I'm never paid back since I'll always have the equity in the property.

Originally Posted by Gnutella

Maybe she should consider finding a roommate to cut down on the costs? Of course, she'd have to be comfortable with it, and it'd have to be somebody who's comfortable with a mother and her children.

There's an organization called coabode that helps match single mothers together for house sharing. It will take a while to find the right match----a house big enough with children in the appropriate age ranges and parents who have similar parenting styles. But I think it's a great idea and worthy of pursuing as a long term goal.

Originally Posted by greg42

This is a side note but given that at work we are garnishing wages for child support, I wonder why the payment has to be erratic. Presumably once the garnishment happens the state smooths out the payments, but I don't really know what happens after we send it to the state and I gather there is some red tape. Plus maybe one has to go back to court to get this kind of thing happening. We get court orders in the mail, we withhold it from their pay and send it somewhere. That's really the end of our involvement.

Sadly, the same rules don't apply to business owners. The wages can't be garnished because there is no payroll for the owner, just the employees. She should have gone after half the business at the time of divorce but she just wanted out. She's paying the price for not going after what she deserved.

Originally Posted by groar

...it really sucks that lower income people are getting priced out of rentals in the metro area but that budget and wishlist is way out of whack with prices.

I know. I can't blame her for wanting her children in a safe area, especially when she should be able to afford higher rent if the child support was reliable.

Originally Posted by groar

...could you help her out with a down payment on a house? that might make more sense than buying an auction property outright (i have a friend who did that and i can get you info if you like, but i know they weren't able to look at the inside of the house before buying it), and finding a mortgage payment in that range is a much better bet.

She won't qualify for a mortgage because he let their home go into foreclosure while she lived in it when they separated. She was a SAHM at the time the marriage collapsed. I've thought about funding a mortgage for her. Lots to consider. Thanks for letting me know that you can't see the inside of an auction house before bidding. That's a scary idea.

Originally Posted by groar

... Like lending money to a friend, the end result is often not what either party fully expects, and the friendship is often damaged irreparably. Good luck!

I know! I'd hate to be put in a position to evict her! That's why I thought about auction houses, figuring I could gift it to her and never expect anything. Whatever I could buy that I would feel comfortable gifting would definitely be a dump but it would be a dump in a safe area. She doesn't know I've been considering these options. Right now, I'm just hoping she can find the right rental.

[greg42]

Originally Posted by Hopes

Sadly, the same rules don't apply to business owners. The wages can't be garnished because there is no payroll for the owner, just the employees. She should have gone after half the business at the time of divorce but she just wanted out. She's paying the price for not going after what she deserved.

Ah, yes, I considered it could be that. Still, there should be some process for making the deadbeat catch up, but I'm sure it would have a lot of delay and wouldn't necessarily result in reliably monthly income.

I would keep digging for rentals if I were you. If you're going to put any of your money into the equation, I think you'd be better off that way than with owning. It disappears and there are no two ways about it, whether it's paying part of the rent, helping with deposit, whatever. But then, you never know, I suppose you could stumble upon some usable 50k house or something that would work out with you as landlord charging reasonable rent. Dollar wise though, for most of the time it would probably come out the same, so you have to really want the extra house and be ready to deal with the implications of that. Making up $200 of extra rent is really no different than charging rent that's $200 less than expenses on a house you owned. And just like anytime with renting, you don't have all the upkeep hassles of ownership.

[airwave09]

The Rent Is Too Damn High Party's Jimmy McMillan at the NY Governor Debate - YouTube

[XRiteMA98]

A couple of years back I was looking to buy a duplex - a rental property. I saw a bunch of them on beeachview blvd (along the T line). The one I wanted to buy had 3 bd (althoug the 3rd was really small) and they were rented for like around 600 each.

My point is look in beechview as well (I am not sure what neighborhood is there, the T station was Westfield, like 1 stop from downtown).

My opinion is help her solve one problem at a time. Find her a rental first and then you'll see how else you can help.

I never bought a foreclosure but I watched this show on tv where two guys buy foreclosures only and flip them. They are not allowed inside a house before buying it. Sometimes what they find in it is horrible; sometimes they don;t make any money flipping them. Be careful.

[Goodjules]

I live in a 2 bedroom, 1 bath townhouse. My daughter and I each have a bedroom and we've converted the dining room into a bedroom for my son. By doing this, we can live in a safe area and I didn't have to get rid of our pets.

Your friend is in a really difficult situation. Safe and affordable is paramount. If she needs a place right away, helping her with the rent is probably the best way. If that works and you still want to buy something and be the landlord, you will have given yourself time to find something that meets everyone's needs.

[Hopes]

Thanks for the responses, everyone. With the help of a CD member who DM'd me, and the various responses here, we were able to identify other areas that have affordable rent in safe and acceptable school districts. My friend finally accepts the 2 bedroom scenario as a possibility. She's willing to move into a 2 bedroom duplex with an unfinished basement that she can convert into a living space.

[Hopes]

Originally Posted by greg42

Ah, yes, I considered it could be that. Still, there should be some process for making the deadbeat catch up, but I'm sure it would have a lot of delay and wouldn't necessarily result in reliably monthly income.

From what I understand, after 3 months behind in support, the penalty is loss of drivers license. That doesn't help the support be dependable. He always pays something right before the risk of losing the license. Then he starts missing months again without warning. So she never knows when she will have money and when she won't.

Having a budget for this unrealiable support with three months worth in savings account would be a solution. That way she threwould have money available when he misses a payment. Actually, that's a better solution than buying property or helping her pay rent each month. I could fund three months of child support in an account for her to use the months he doesn't pay. When he does pay, she can deposit the back support payments into the account.

But the absolute best solution is for her to find a place to live that allows her to live on her own income. She's better off being entirely self sufficent because she wouldn't get any child support for eternity if he died.

[Goodjules]

Originally Posted by Hopes

Thanks for the responses, everyone. With the help of a CD member who DM'd me, and the various responses here, we were able to identify other areas that have affordable rent in safe and acceptable school districts. My friend finally accepts the 2 bedroom scenario as a possibility. She's willing to move into a 2 bedroom duplex with an unfinished basement that she can convert into a living space.

That's great news. If you want to DM me, I'd be happy to talk to her via email. I was in a very similar situation myself not too long ago. She has a wonderful friend in you. I couldn't have gotten through the past five years without the incredible support of my dear friends. Places to stay, loans, meals, help moving... Her kids will adjust and she will find strength she didn't know she had. Never once have I regretted getting out of a very bad situation even if it meant extreme hardship. Staying would have been way worse. Keep doing what you're doing - it matters.