How much to charge rent? (Seattle, Lynnwood: real estate market, to rent, mortgage) - Washington (WA) -Seattle and King County Suburbs - City-Data Forum

BaconBurgerTaco10 · 12-05-2011, 07:17 AM

Hi,

I bought a 1978 1,454 SQ FT Rambler in Lynnwood this summer. It's a 3 Bedroom 2 bath on a .27 Acre lot. I had friend move in in the Summer on a month to month basis and I think I'm charging him way too little. He's paying $325.00 right now and I can't find a single room available in Lynnwood at that price. I'm right by 405 and I5 so the location is great.

If you owned this house and were giving a buddy a month to month based rent + utilities with no deposit and little to no restrictions on "house rules", what would you charge?

I'm 23 and completely new to this stuff so any info helps!

Verio · 12-05-2011, 08:21 AM

Quote:

Originally Posted by Seattlephil

Hi,

I bought a 1978 1,454 SQ FT Rambler in Lynnwood this summer. It's a 3 Bedroom 2 bath on a .27 Acre lot. I had friend move in in the Summer on a month to month basis and I think I'm charging him way too little. He's paying $325.00 right now and I can't find a single room available in Lynnwood at that price. I'm right by 405 and I5 so the location is great.

If you owned this house and were giving a buddy a month to month based rent + utilities with no deposit and little to no restrictions on "house rules", what would you charge?

I'm 23 and completely new to this stuff so any info helps!

If he was a good buddy of mine, I'd probably charge him 1/3 of the Mortgage price a month + the average 1/3 of the utility costs, etc.

It sort of sounds like you're asking a morality question here. If you intend to make money off of him by jacking his rent up, treat him like a real tenant then. If you're just being a cool guy and helping him out by renting him a room, then be fair about the actual costs.

Ira500 · 12-05-2011, 10:12 AM

OK, so you live in the house and your friend also lives in the house, right? Are you paying a mortgage? If so, what are your payments? From the sound of it, if you were to rent out the whole house, it would probably fetch somewhere in the 1300-1400 range, and if you were dividing that in 3(based on the number of bedrooms)...350 sounds fair. Or what Verio said.

Freebird2007 · 12-05-2011, 10:20 AM

given that it is an old small rambler in Lynnwood, I would go far as to say that you probably paid less than $100k for it. Lets say for argument sake you did a fixed 30yr at 5% with no money down. Your mortgage payment is around $500 a month. And you want him to pay $325? You sure he is a friend cause it sounds like you are taking advantage of him.

BaconBurgerTaco10 · 12-05-2011, 10:26 AM

Quote:

Originally Posted by Freebird2007

given that it is an old small rambler in Lynnwood, I would go far as to say that you probably paid less than $100k for it. Lets say for argument sake you did a fixed 30yr at 5% with no money down. Your mortgage payment is around $500 a month. And you want him to pay $325? You sure he is a friend cause it sounds like you are taking advantage of him.

Wow. Amazing assumptions to make! I actually paid 185K as it's in a great location. Actually, I did 2 years of research on the real estate market and there are close to 0 houses for as cheap as you stated. What kind of area are you looking in? Right off 99 and a rambler that has no windows?

To make it easier, my mortgage is $1,300. He pays $325.00 , my brother pays $280.00 and I pay the rest. FAR from taking advantage. Nice try?

There were 4 offers within 6 hours this house went on sale...I was the first one ready. That shows how good of a buy it was.

Freebird2007 · 12-05-2011, 10:37 AM

Quote:

Originally Posted by Seattlephil

Wow. Amazing assumptions to make! I actually paid 185K as it's in a great location. Actually, I did 2 years of research on the real estate market and there are close to 0 houses for as cheap as you stated. What kind of area are you looking in? Right off 99 and a rambler that has no windows?

To make it easier, my mortgage is $1,300. He pays $325.00 , my brother pays $280.00 and I pay the rest. FAR from taking advantage. Nice try?

so lets say you did actually overpay on that property and pay $185k (expensive when you consider newer houses built within 5 years were selling for low $200k in Lynnwood) With NO money down and a 5% rate, you are still looking at less than $900 a month mortgage.

Edit: I saw that it had a quarter acre lot, so yeah....I'd price it at around mid 100ks.

Ira500 · 12-05-2011, 10:40 AM

You could also charge your brother more, no? If you're paying 1300, then it does sound like you're being overly generous. Maybe your brother and your friend should each pay 400. If prices continue to fall and somehow you're forced to sell, your friend and your brother won't have to make up that shortfall, you will.
On the other hand, if you're making 200,000 dollars a year working, you can afford to be generous. Otherwise, you're not ripping therm off by charging 350-400. You're not running a charity.

Ira500 · 12-05-2011, 10:45 AM

Quote:

Originally Posted by Freebird2007

so lets say you did actually overpay on that property and pay $185k (expensive when you consider newer houses built within 5 years were selling for low $200k in Lynnwood) With NO money down and a 5% rate, you are still looking at less than $900 a month mortgage.

Edit: I saw that it had a quarter acre lot, so yeah....I'd price it at around mid 100ks.

How many people are currently getting loans with no money down? I'm not aware of any these days, they pretty much all dried up, didn't they?

BaconBurgerTaco10 · 12-05-2011, 10:45 AM

Quote:

Originally Posted by Freebird2007

so lets say you did actually overpay on that property and pay $185k (expensive when you consider newer houses built within 5 years were selling for low $200k in Lynnwood) With NO money down and a 5% rate, you are still looking at less than $900 a month mortgage.

Edit: I saw that it had a quarter acre lot, so yeah....I'd price it at around mid 100ks.

Between my research and two family realtors who have been doing this for 20+ years, I'm sorry to say that you have absolutely no idea what you are talking about. Please accept that and stop posting in my thread because like I said, you are CLUELESS! I underpaid for this property. The houses around me sold for well over 400K in 2008 and my neighborhood are the last of all the other houses that were sold to developers. My neighborhood will be bought out when the real estate market comes back and I'll most likely be able to double my value due the size of the land and location.

I know it sucks to lose to a young guy but you lost this one from the beginning. You made assumptions about something you have no idea about and you just valued a house with not enough info. You are not an appraiser buddy.

BaconBurgerTaco10 · 12-05-2011, 10:47 AM

Quote:

Originally Posted by Ira500

How many people are currently getting loans with no money down? I'm not aware of any these days, they pretty much all dried up, didn't they?

He doesn't know what he's talking about. Lenders are VERY strict these days and it's hard for anyone to get a loan. I had enough to do 20% of the total value but I decided not to so I could have a nice buffer.