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Old 10-06-2014, 02:35 AM
 
33,046 posts, read 22,053,448 times
Reputation: 8970

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Quote:
Originally Posted by boxus View Post
You know what you did, you stated just "P&I", to avoid the rest of your ridiculous post that owners cannot face rising costs like renters do.

Look at your statement:

"Rising prices do not adversely affect a homeowner's P&I payment but renters cannot for long avoid facing rent increases."

You threw "P&I" in there to make it look like your argument is sound, when in fact you omitted something for owners that indeed can rise, that is taxes and insurance; why do you avoid these costs? Because it counters your argument regarding renters, that is why. It also throws in a valid point that while renters can bail after the lease is up, an owner is stuck until someone buys the house.

Your illogical arguments and your wannabe crafty logic reflects your financial situation; you are just too darn obtuse to actually understand how to get ahead financially, and rather play the blame game.

Except that homeowners are insulated from property tax increases while renters largely are not insulated. Property taxes are often lower - sometimes drastically lower - on owner-occupied homes than they are on rental property. (Ever heard of homestead exemptions? Over 40 states have them.)

Because of homestead exemptions, property tax caps and other state tax provisions, property taxes rise more slowly on owner-occupied homes than on rental properties.

Homeowners lock in their P&I payment and that is a huge advantage over renters; landlords can charge what the market will bear regardless of property tax levels. Prop 13 slashed average property taxes by over half, yet rents kept going up.

So be grateful you own your home, and admit it beats the pants off the alternative.
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Old 10-06-2014, 06:41 AM
 
15,734 posts, read 9,251,350 times
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Quote:
Originally Posted by freemkt View Post
Except that homeowners are insulated from property tax increases while renters largely are not insulated. Property taxes are often lower - sometimes drastically lower - on owner-occupied homes than they are on rental property. (Ever heard of homestead exemptions? Over 40 states have them.)

Because of homestead exemptions, property tax caps and other state tax provisions, property taxes rise more slowly on owner-occupied homes than on rental properties.

Homeowners lock in their P&I payment and that is a huge advantage over renters; landlords can charge what the market will bear regardless of property tax levels. Prop 13 slashed average property taxes by over half, yet rents kept going up.

So be grateful you own your home, and admit it beats the pants off the alternative.
Except you have no idea what you're talking about. Even in CA, which had Prop 13, my property taxes went up. Yes, California, which doesn't have a homestead exemption, and where rental property is covered under Prop 13. Where rents go up just like they do in the other 49 states. How do you explain that? Could it be that rents are market driven, not tax driven, like you allege?
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Old 10-06-2014, 07:13 AM
 
15,539 posts, read 13,528,656 times
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Quote:
Originally Posted by freemkt View Post
Except that homeowners are insulated from property tax increases while renters largely are not insulated. Property taxes are often lower - sometimes drastically lower - on owner-occupied homes than they are on rental property. (Ever heard of homestead exemptions? Over 40 states have them.)
No, homeowners are not exempt from property tax increases, they may be capped in some places, but they are not exempt. Also, a renter can just move at the end of a lease, an owner just cannot walk away from their house without financial consequences.

Quote:
Originally Posted by freemkt View Post
Because of homestead exemptions, property tax caps and other state tax provisions, property taxes rise more slowly on owner-occupied homes than on rental properties.
They still rise, and a homeowner just cannot go somewhere else at the end of a lease. Also, the rental market is a market, thus even if a rental owner needs $1000 a month rent for the home, if the rental market dictates only $700, the landowner will have to lose because the rental market is not dependent on what a rental owner owes on the home.

Miami is a great example of this concept, where over the last ten years, the rents have swung from high, to low, and back to high, yet the amount rental owners have to pay has not changed, many were losing money each month because the rental market was lower than what they had to pay on the condo each month. This is my situation now, where my rent is still lower than what my landlord pays each month.

Quote:
Originally Posted by freemkt View Post
Homeowners lock in their P&I payment and that is a huge advantage over renters; landlords can charge what the market will bear regardless of property tax levels. Prop 13 slashed average property taxes by over half, yet rents kept going up.
Only P&I is locked, insurance and property taxes are not, as well has HOA/condo fees and special assessments. Also, a renter can just leave after a lease, and some places have rules that cap the amount of rent that can increase. An owner cannot walk away when insurance gets too high, HOA issues, etc, they have to sell or do something.

Quote:
Originally Posted by freemkt View Post
So be grateful you own your home, and admit it beats the pants off the alternative.
I do not own a home, never have, I have been a renter for over 25 years. I have owned one home for investment purposes during the real estate bubble, in which I sold and made a great profit before the bubble popped, but I never lived in it and never even physically looked it.
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Old 10-06-2014, 07:43 AM
 
Location: Crooklyn, New York
28,266 posts, read 26,242,183 times
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I'm not sure why you guys are still arguing over this renting/owning thing when so many have said it's context dependent. In Raleigh, I would probably rent unless I had plans on staying there for a long time. In the Bay Area, I would make a greater effort to buy since there's more upward pressure on prices. And again, someone may choose to buy or rent depending upon a whole bunch of other personal circumstances.
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Old 10-06-2014, 07:49 AM
 
15,539 posts, read 13,528,656 times
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Quote:
Originally Posted by freemkt View Post
Not really, since Ford and Publix operate in a free market. Government does not drive up the price of food, government subsidizes the price of food.
Ford and Publix also operate under regulations, do you not think they do? You do not think gov regs on food and cars have any impact on the prices? Even zoning laws have an impact as both (Ford through their dealerships) have real estate they use to sell their products.

Quote:
Originally Posted by freemkt View Post
Through zoning, government does drive up the price of rent. Ever heard of supply and demand? What did you expect to happen to prices when government artificially restricts the supply of housing?
The price of rent is driven by demand. The areas in high demand will have higher rent. You have an issue with this because you do not make enough to live in the posh areas because the rent is high, and you want to make it out like gov regs have something to do with this. If gov regs were so much of a factor, then rent everywhere would be high, whereas it is not.

You cannot say gov regs are a significant factor that makes rent for a condo in an area $2000 a month, when those same regs apply to an apartment in the same city going for $750 a month.

I pay a lot in rent for my ocean view condo in the nice area of Miami called Brickell, the rent is high because it is a luxury building, and because there is a high demand for condos in Brickell. Just down the street not even ten minutes, the rent is half of what Brickell is, however, it is a poor neighborhood. The rent is lower because the demand to live in a poor neighborhood is lower.
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Old 10-06-2014, 07:52 AM
 
15,734 posts, read 9,251,350 times
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Quote:
Originally Posted by freemkt View Post
I then take it that you are okay with any level of government regulation that drives up prices?

Like, say, when cap and trade and the EPA war on coal cause your electricity rates too necessarily skyrocket?

That's life, right?

There is nothing wrong with government-driven rent inflation as long as renters receive just compensation.
You don't think grocery prices are affected by government regulation? Gas prices?

That IS life. Learn to deal with it.
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Old 10-06-2014, 07:54 AM
 
15,734 posts, read 9,251,350 times
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Quote:
Originally Posted by freemkt View Post
Not really, since Ford and Publix operate in a free market. Government does not drive up the price of food, government subsidizes the price of food.

Through zoning, government does drive up the price of rent. Ever heard of supply and demand? What did you expect to happen to prices when government artificially restricts the supply of housing?
Actually, government does drive up the costs for both of those companies. Gas, property taxes, etc affect grocery stores. The numerous government mandated safety features required on cars definitely drives up the cost of cars.
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Old 10-06-2014, 11:55 AM
 
33,046 posts, read 22,053,448 times
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Quote:
Originally Posted by ringwise View Post
Except you have no idea what you're talking about. Even in CA, which had Prop 13, my property taxes went up. Yes, California, which doesn't have a homestead exemption, and where rental property is covered under Prop 13. Where rents go up just like they do in the other 49 states. How do you explain that? Could it be that rents are market driven, not tax driven, like you allege?

Except that - and I don't have a source handy, but this is well-known among real estate professionals - on average, rental property is sold (and thus reassessed at sale price) more frequently than owner-occupied homes. Some CA landlords have responded by incorporating their properties; and then exiting the property (probably related to federal tax rules.) by selling the corporation rather than specifically the property...which has some people calling for a two-tiered tax structure with higher rates on rental property.

Rental property assessments and property taxes rise faster than on owner-occupied homes in states that have property tax caps; a 2000 study in Michigan showed nonhomestead property taxes 25% higher than equivalent owner-occupied homes.

I said that landlords charge what the market will bear, regardless of property taxes - i.e. homeowners are insulated from cost increases while renters are not.
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Old 10-06-2014, 12:19 PM
 
15,734 posts, read 9,251,350 times
Reputation: 14217
Quote:
Originally Posted by freemkt View Post
Except that - and I don't have a source handy, but this is well-known among real estate professionals - on average, rental property is sold (and thus reassessed at sale price) more frequently than owner-occupied homes. Some CA landlords have responded by incorporating their properties; and then exiting the property (probably related to federal tax rules.) by selling the corporation rather than specifically the property...which has some people calling for a two-tiered tax structure with higher rates on rental property.

Rental property assessments and property taxes rise faster than on owner-occupied homes in states that have property tax caps; a 2000 study in Michigan showed nonhomestead property taxes 25% higher than equivalent owner-occupied homes.

I said that landlords charge what the market will bear, regardless of property taxes - i.e. homeowners are insulated from cost increases while renters are not.
And once again I remind you that you are completely wrong. Homeowners have cost increases. In fact, because rent is determined by what the market will bear regardless of property taxes (as you have stated), yet homeowners have costs that increase, the renter comes out ahead.
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Old 10-06-2014, 12:20 PM
 
Location: Crooklyn, New York
28,266 posts, read 26,242,183 times
Reputation: 11726
There can clearly be a huge disadvantage to buying if property values drop significantly (as they did last decade). A lot of homeowners did short sales and then rented out a house in the same area for half the price.
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