Alameda (Oakland, Concord, El Cerrito: renting, mortgage, credit score)

[daepro]

Thanks for all the practical advice and we most assurdadely check out rental opportunities. I did not think that no pets is a negotiable issue. I also had no idea about the 7% vacancy rental rate here in Alameda. The real estate agency you recommend is good place to start and see what they can come up with. One is never certain when the market bottoms out and prices start to rise again. Risk is sometimes hard to swallow and it never tastes good even when you wash it down with Kool -Aid.
You both have greatly contributed me with a more cautious and curious attitude. Thank you so much and I hope that I may be able to help you out with some advice some day.

[Tallysmom]

Originally Posted by daepro

Thanks for all the practical advice and we most assurdadely check out rental opportunities. I did not think that no pets is a negotiable issue. I also had no idea about the 7% vacancy rental rate here in Alameda. The real estate agency you recommend is good place to start and see what they can come up with. One is never certain when the market bottoms out and prices start to rise again. Risk is sometimes hard to swallow and it never tastes good even when you wash it down with Kool -Aid.
You both have greatly contributed me with a more cautious and curious attitude. Thank you so much and I hope that I may be able to help you out with some advice some day.

A friend just went through a rental hunt for daughter who has Down's. Her daughter is pretty self reliant, but needs someone to help her cook, and dress and keep her on track. So she has in home care for the most part, but can stay alone a few hours a day. Most places that were large didn't even want to talk to her because of liability issues. She ended up dealing with a family owned tri-plex, and got her daughter's apartment that way.

Every thing is negotiable for some places, and nothing is negotiable for others. It really just depends on how you present yourself and your pets.

[kettlepot]

How to Guesstimate a monthly house payment AKA PITI (Principal, Interest, Taxes & Insurance)

Let's say the house is 500,000; less 20% down = 400,000 to finance.

At a 6% rate (a bit high for right now) your Principal and Interest will be 400*6 = 2400/month.
If the house is 600k and you put 20% down it would be 480k to finance or 480*6 = 2880/month.

Add in 1/1000 of the price of the house as your monthly property tax. $500/month for the 500k house, $600 for the 600k house.

Finally, fire and liability insurance on the house. In Alameda, it could be as low as $50/month, as the house won't be located in the fire prone hills.

500k house = 2400 Principal & Interest + 500 property Tax + 50 Insurance = $2950/month
600k house = 2880 Prinicpal & Interest + 600 property Tax + 50 Insurance = $3530/month

As a contrast, in the cheapest parts of Oakland, a 2/1 house can be purchased for 125k. Assume 20% down and you have a payment of:

125k house = 600 Principal & Interest + 125 property Tax + 50 Insurance = $775/month.

If your interest rate is 5 1/2% rather than 6% your Principal and Interest will not be 5.5 * 1/1000 of the amount your finance. It will be more like 5.6 times. And at 5% interest rate you should multiply it by 5.2 times, and 4.5% should muliply by 5 times. It is not a straightline as it interest rates move up and down.

As for Alameda as a city, I have visited many times. It is pretty close to idyllic as you can get for an older inner ring suburb.

As for the R/E market, I am hearing more and more discussion about how coastal California is near the bottom of the cycle. However, no one is talking about actual appreciation in the near future.

[PeixeGato]

There is definitely room for negotiating rental amounts these days, especially in areas outside of the highly desirable SF proper. I can't speak for how that applies to pets, but if you can find out (generally through casual conversation well before you discuss rent) how long the place has been vacant, you have a significant piece of information.

For example, if the listed rent is $2,000 per month, but it is December 20 and you find out the place has been vacant for 4 months. You can say to the landlord, if you take $1,500 per month, I'll sign the lease right now for move-in on Jan 1, giving you something you haven't had in several months, a paying tenant. Tell them if they turn you down, then they are looking at yet another month without a tenant which will "cost" them $1,500 in lost rent in addition to the $8,000 (assuming the $2,000 the landlord was asking) in lost rent they have already endured. When you look at the difference of $500/month (between landlord asking price and your offer), that works out to $6,000 over the course of a one year lease in reduced rental income. Sounds like a lot, doesn't it? Well, not when you look at it this way. That "loss" that the landlord would suffer over the course of a year equates to just 3 months of vacancy at his/her current asking rent. If the date is December 20, then renting for Jan. 1 is not gonna happen and renting for Jan. 15 is highly unlikely because that means someone will be looking to sign a lease during the thick of the holiday season. So the landlord is essentially looking at already losing the month of January. This means that if he/she doesn't take your offer, they only have 2 months to avoid losing money on the deal they passed up that you offered. What is the chance they will rent the unit in Jan or Feb for a March 1 move-in, (i.e. during "bad" weather months), especially if they weren't able to rent it in the great weather months of September and October AND the economic outlook has only gotten worse? I don't know the answer, but that uncertainty is part of the "game". How much risk is the landlord willing to take.

Now, the landlord probably won't take the $1,500, but he/she may counter with something like $1,700, especially if you have good credit and sound like you plan to be a long-term tenant. In the end, you save $300 per month and get the place you really want. Give it a shot, what do you have to lose?

[daepro]

Now, the landlord probably won't take the $1,500, but he/she may counter with something like $1,700, especially if you have good credit and sound like you plan to be a long-term tenant. In the end, you save $300 per month and get the place you really want. Give it a shot, what do you have to lose?

"When time gets tough the tough get going." I have always been a poor bargainer and often just takes what is being asked. I have chosen to the profession of social work as I know I am not a businessman. That said I am usually good at advocating for others but I don't drive a hard bargain.

Thanks for putting out as clearly as you did.

[daepro]

[quote=Tallysmom;6443410]A friend just went through a rental hunt for daughter who has Down's. Her daughter is pretty self reliant, but needs someone to help her cook, and dress and keep her on track. So she has in home care for the most part, but can stay alone a few hours a day. Most places that were large didn't even want to talk to her because of liability issues. She ended up dealing with a family owned tri-plex, and got her daughter's apartment that way.

It is sad that discrimination exists in this way but I am sure that the family that eventually rented to her will be benefitted in many ways that they did not even think of.

[quote=Tallysmom;6435672]That's exactly why we bought a house.... and if you want to come to my neighborhood (East Oakland) you can buy a piece of the rock for under a 100K. Now -- that house will need a LOT of work. And you're living in a scary neighborhood. And a not walkable neighborhood. And bad schools.

I understand how you feel about taking the risk and being a pioneer. Eventually it may turn around and you too will be rewarded for taking the risk.
Thanks for being consitently supportive of this transitional period in my life.

[Tallysmom]

Originally Posted by daepro

I understand how you feel about taking the risk and being a pioneer. Eventually it may turn around and you too will be rewarded for taking the risk.
Thanks for being consitently supportive of this transitional period in my life.

Back then, we didn't think of ourselves as pioneers, we just bought a house we could afford and not have to live on beans and rice. And I love my little house. It would be nearly perfect if hubby didn't bring everything home and we didn't collect cats (we have NINE!!!)

But hopefully when the economy recovers and the market gets back on track we will be able to retire in 5 or 6 years and sell and move back home to PA... where I will buy a big house on a big plot of land.... I'd love to have a couple of horses.

[daepro]

We had horses, chickens et al in Massachusetts and that is allot of fun. They can ground you though and sometimes when you retire with time on your hands you may want to travel and it is tough to do that with horses. Just something to think about.

[sliverbox]

Tallysmom is right, parts of Oakland are indeed cheap. Then again, you need to REALLY know what you're getting into because if its cheap, chances are the crime in the area is kind of a problem. Personally, I like being able to walk around whenever I please and not worry about my truck getting broke into.

Secondly, the housing boom was a freak economic event and many area, like West Oakland got hit by the bubble as well. I think the real problem with buying there unless you want to live there for the rest of your lives is that I would seriously doubt the area will rebound anytime soon. So you might be stuck with a totally dead piece of property. On the other hand, if there are really 125k homes there, you would be paying less than rent in other places and even if you sold at what you paid or slightly less, you aren't putting yourself into a financially disastrous situation.

Still another idea is to look in less "sexy" areas like Hayward or Albany. These are areas that are sort of in between. They're not as gentrified and more working/middle class, but the crime isn't all that bad either. I had a friend who bought a 4 bedroom house in Albany for $430k, and it had been 600k two years ago. It isn't exactly cheap, but its cheap-er than Berkeley or Alameda.

One other aspect you might consider is what me and my Wife are doing. As mentioned, we share a house with another person. Our rent is cheap and we save probably 50-60% of our take home pay. We've been doing this for years. Wages in the Bay Area are pretty high, so if you can rent cheap, save a lot, you can save up a lot for purchasing a home elsewhere, such as cities in NC, TN, TX, GA, and other lower cost areas. That way you can offset the cost of the house and not have to rely so heavily on the local job market.

Anyhow, hope that helps a bit more.

[daepro]

Living in area in which I would not be able to take a walk anytime I choose is simply not an option. I have had the freedom to do so no matter where I lived all over the world including NYC and Berlin. If parts of Oakland limit that sorry but it is not for me. No matter how nice or how much of a deal I get on the property.

Perhaps renting is the next viable option but I would like to have a nice garden to grow a few of my own vegies and even keep a chicken or two for the eggs if I can. I guess I need my freedom and am stating to get discouraged today. Tomorrow may be another day.