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Old 05-26-2020, 05:38 PM
 
Location: Colorado
15,090 posts, read 9,394,316 times
Reputation: 27908

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Quote:
Originally Posted by Even_Stephen View Post
Touche'. However, I'm not a Dude. A man, but not a Dude.

I did fine during 2008. Many others did, too. Though many did not. One has to have cash reserves to cover vacancies. But people have to live somewhere. Often, homeowners become renters in hard times. They can't make the mortgage, but can afford to rent a smaller or less desirable place. This makes for an opportunity for many landlords.
Fair!

(I am one of those "Dude as an expletive" people--same tone/feel as if I'd yelled "Hey now!" or something, but nonetheless...fair.)

I rented from people who had no real intention of being landlords, in early 2009. They had bought a fixer upper in about 2005-2006 and thought to flip it as a fun family project. The wife and daughters got a bit overzealous with fancy trimmings on the interior, and then 2008 hit and about the time they had it ready to sell, they could not get what they had invested in it, in that market.

So they put it up for rent. Gorgeous place, not far from Olympia, WA.

They are one of my examples of how good it's been to rent from private owners. They never raised our rent, they were available but not intrusive, and that family and my family became good friends. We used to go boating together. The difference in doing business with them, versus doing business with Property Management companies, was like the difference between buying things from a local small business where they know your name, and the Walmart where they check your receipt as you leave to make sure you aren't shoplifting that half-gallon of milk.

Now I am sure that private owners I've dealt with who were like that, real people in Des Moines, IA or Washington state...I'm sure that once the good tenant had moved on, they evaluated the market and raised their rates if they continued to rent a place out. But I wonder if places with more presence of rentals by owner, and somewhat less under pro management, have a slowing effect on the rental market, because they ONLY raise rents at those times. Every PM company I've ever rented from, even in the same areas that I rented from owners at other times, raised rent as much as they could every year. It is usually almost enough to eat my annual raise from my job. Between that, the increase in health insurance, and the increase in taxes, I'm pretty much losing money every year in terms of my wages.

Also, TCHP, yes the property management companies most definitely ARE manipulating the prices. They don't have to collude to do it, they all just have to have the same mission. I know about this because in my job, I actually deal with large PM companies, a lot. Keeping rents optimized is a big part of their advertised services to owners, doing it on a larger scale means that they're all working to push an area's rents higher and higher...more so than the odd Joe Bob or Sally would who owns a house or two and rents them out to others they see as people, and members of their community.
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Old 05-26-2020, 06:19 PM
 
Location: Colorado
15,090 posts, read 9,394,316 times
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To try and explain why I'm fussing about rental pricing in this city?

Minimum wage jobs are not just for students and old people who are supplementing their retirement income just to get out of the house. We have a lot of businesses in this town that pay about minimum wage, and if you go in there, you'll see a lot of adults. Now let's just say that those adults don't even have kids or partners or dependents, they just have to support themselves on that.

A person who works minimum wage at full time, is earning $12/hour x 40 hours a week = $480/week, or $24,960/year, or $2,080 per month. Rent is not supposed to be more than 1/3 your income, in fact many places have guidelines in place that they won't rent to you if your income isn't 3x the rent or better. So divide by 3 and you get $693.33.

I go to hotpads.com and plug in a search for anywhere to rent in Colorado Springs for $693 or less. Most of the results were rooms for rent in people's houses. I eliminated that criteria and there were 5 results left in the entire city, aside from one dorm style student housing listing.

If your credit is not perfect, or you don't have rental references (not even saying "if you are a bad tenant" because there can be other reasons to not have rental references) then there, you have even more obstacles to getting into a home. Even in a bad neighborhood. In any neighborhood. Anywhere in this city.

5 results. For what...thousands?...of lower income people? Most of whom work full time?

Of course, it's better if you are part of a couple. Then you can double that income, assuming you don't have children. (I won't complicate the conversation with that variable.) Still not great, but better. However, not everyone has a partner that they can or should live with. Of course, they can do as I did with the abusive older man who leveraged my vulnerability at 18, and just deal with it, because you don't have much choice if you are struggling to make it on your own.

Look, if we want people to work in retail, food service, hospitality, janitorial, or a whole lot of other jobs that need to get done, then they have to be able to live in the area. So either we raise the minimum wage, which always gets everyone to howling, and thinking of all the ways that prices can get jacked up to take all that "extra" money people would supposedly have...OR... There can be some kind of affordable housing.

Do you prefer the government to subsidize affordable housing? Or do you prefer for the government to regulate it so that there is some consideration of what "overpriced" rent looks like and it isn't legal to charge that? Because getting landlords (whether owners or PM companies) to VOLUNTARILY offer housing that a poor person can afford, is apparently completely off the freaking table.

Or near enough. I mean, there are like 5 listings. And a few rooms in people's houses.
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Old 05-26-2020, 06:27 PM
 
6,042 posts, read 8,230,808 times
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I agree. It doesn't need to be luxurious, but basic, safe rentals/housing should be accessible for people in these jobs, imho. Maybe these jobs don't all require advanced degrees, but we all want them to exist for our convenience and needs and I think our society should be one in which people working for a living should be able to live on it independently.
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Old 05-27-2020, 10:05 AM
 
Location: Colorado
15,090 posts, read 9,394,316 times
Reputation: 27908
And it occurs to me that I need to be clear, I am not pointing a finger at any one landlord, or even any one property management company or real estate venture, and scolding them specifically for being greedy. I mean, if I had a house to rent out, would I deliberately undercut the market, for the greater good? No. Not only would I figure that one property isn't going to make a difference, but like anyone, I don't want to take less money than I could be getting for it, nor do I want to attract specifically sub-prime classed renters, unless I was particularly renting out sub-prime housing. Just like anyone.

What concerns me is that there's a lot going on, especially now, that feels suspiciously unsustainable. Not just in the rental, or even real estate markets in America or here... But in our economy in general. All this propping up of the stock market, I can't imagine that where it sits today is an accurate reflection of our nation's business world, with so many people not working, not buying, dropping dead, places closed... But the stock market is doing fine, because the government will just print a bunch of funny money and throw it in there to soothe investors' feelings?

That can't be right.

So in a sense I feel like ANYONE who sees our present overall situation as one where many will suffer, but not me, others will lose money, but I won't, that they've so completely hedged their bets that no matter if we have another Great Depression they'll come out smelling like a rose financially...taking all the profits and none of the risks of loss... Or getting angry when troubles come a-knockin' on their door, because they thought that they were immune... Just like those who soothe themselves by feeling that bad things only happen to people who deserve it, that whole Just World Fallacy thinking. I mean I'm not saying that we should all run around like our hair is on fire, but I really have a bad feeling about what's coming down the pipe for America.

Something, somewhere, has got to give.
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Old 05-27-2020, 10:14 AM
 
Location: Colorado Springs
3,698 posts, read 2,931,598 times
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Quote:
Originally Posted by Sonic_Spork View Post

Also, TCHP, yes the property management companies most definitely ARE manipulating the prices. They don't have to collude to do it, they all just have to have the same mission. I know about this because in my job, I actually deal with large PM companies, a lot. Keeping rents optimized is a big part of their advertised services to owners, doing it on a larger scale means that they're all working to push an area's rents higher and higher...more so than the odd Joe Bob or Sally would who owns a house or two and rents them out to others they see as people, and members of their community.

Okay, gotcha, I see where your coming from. Perhaps in a macro sense they are manipulating prices since they seek to obtain market rate for their owners properties. Of course maximization of profit is why nearly every business entity does what it does so it runs counter to the profit motive to not do otherwise. I do agree with you that unbridled capitalism and the profit at all costs model has lead us to our current national situation in nearly any industry you can examine. However, I think putting caps and rules on things like that will be a very hard sale to nearly everyone about everything and is unlikely to happen. How to correct that, I haven't a clue.

Naturally these price increases happens in an expanding market like what we have had for some time now. I do recall times in Cos history when things went backwards and house prices dropped and rental prices dropped, and highly leverage owners were bailing out in droves. In those days you can purchase a 4/3 SFH for around $90k. I doubt those days will return, but then again, we never anticipated the range of the Great Recession nor the current pandemic. I've already seen some short term rental properties in my part of town get for sales signs go up. Perhaps more are coming. Perhaps we are seeing a normalization of markets. Then again, perhaps not. Desirable places will always command higher prices than bumblestick wherever with limited jobs and quality of life aspects.

Are there altruistic landlords out there, absolutely. The owners of two separate rentals in my neighborhood both have a strict personal practice of not changing the rent prices on their tenants as long as they are there. This has lead to some very long term renters in those units and a waiting list that prevents them from ever being empty for more than a week or two for maintenance in between renters. Maybe there are others out there like that, but finding them is difficult and getting in their units even more so.
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Old 05-27-2020, 10:56 AM
 
Location: Colorado
15,090 posts, read 9,394,316 times
Reputation: 27908
Quote:
Originally Posted by TCHP View Post
Okay, gotcha, I see where your coming from. Perhaps in a macro sense they are manipulating prices since they seek to obtain market rate for their owners properties. Of course maximization of profit is why nearly every business entity does what it does so it runs counter to the profit motive to not do otherwise. I do agree with you that unbridled capitalism and the profit at all costs model has lead us to our current national situation in nearly any industry you can examine. However, I think putting caps and rules on things like that will be a very hard sale to nearly everyone about everything and is unlikely to happen. How to correct that, I haven't a clue.

Naturally these price increases happens in an expanding market like what we have had for some time now. I do recall times in Cos history when things went backwards and house prices dropped and rental prices dropped, and highly leverage owners were bailing out in droves. In those days you can purchase a 4/3 SFH for around $90k. I doubt those days will return, but then again, we never anticipated the range of the Great Recession nor the current pandemic. I've already seen some short term rental properties in my part of town get for sales signs go up. Perhaps more are coming. Perhaps we are seeing a normalization of markets. Then again, perhaps not. Desirable places will always command higher prices than bumblestick wherever with limited jobs and quality of life aspects.

Are there altruistic landlords out there, absolutely. The owners of two separate rentals in my neighborhood both have a strict personal practice of not changing the rent prices on their tenants as long as they are there. This has lead to some very long term renters in those units and a waiting list that prevents them from ever being empty for more than a week or two for maintenance in between renters. Maybe there are others out there like that, but finding them is difficult and getting in their units even more so.
Yeah, it is only speculation on my part, and I'm not thinking about (lol funny way to put it) "bumblestick wherever" but rather I wonder if cities of similar size but without the military component driving increased rental houses being under professional management, you see a mix that is more homeowners in their primary residences and rentals by the owners, who live there in town? I only think that tipping a large number of homes into management by companies, rather than individuals, operating in a more impersonal way, they'd be more aggressive about pushing prices up every single year. I mean, yes, Colorado Springs is very desirable, but I also believe that the military presence drives some different possible economic factors. There's also a high turnover of people coming and going.

I guess I'm wondering if there are more factors in play than a natural market of housing in a desirable place to live?

But it can be hard to really evaluate things like a housing market sometimes. I lived in Cincinnati in the late 90's and spent time on foot in what was then (I did not realize it at the time) the "most dangerous neighborhood in the United States" according to some articles I have read since. It has, in more recent years, been gentrified, but the city has been trying to keep some affordable housing projects going so that the cleanup of that area, "Over The Rhine," does not completely price out the poor and cause an explosion of homelessness. I remember that area well, it smelled like rat urine and there were boarded up buildings everywhere, you could not walk a block without people offering to sell you drugs, or begging for change. It was rough. There was an ongoing war between people who just wanted a safe, affordable place to raise their kids, and the gangs wanting to keep their black market enterprises selling drugs and guns going on. And there was another area, the "East End" full of low income white people, in dilapidated houses that had been flooded and should have been condemned, who largely had tons of animals, infestations of fleas, rats, and roaches, and lots of random violence... The poor need a place to live, but the "bad elements" really are no joke... Nobody wants that in their town.

So in a lot of discussions about rent markets, I often feel very, "I get it...but..."
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Old 05-28-2020, 07:42 AM
 
Location: Kennedy Heights, Ohio. USA
2,452 posts, read 1,931,793 times
Reputation: 1850
I like the way how housing is done in Vienna Austria where 62 percent of the people live in social housing. Vienna's social housing is not just aimed at low income people but also the middle class in the city. The housing is done so that nobody pays more than 20 to 25 percent of their household income for housing. There is a mix of regulations that caps rent, deliberate integration of housing for all income levels to prevent low income segregated neighborhoods that are prone to crime due to poverty from developing, government building of housing units to keep supply up with demand as to keep rents from becoming expensive as have occurred in cities such as London and Paris. The result is Vienna is consistently rated as one of top World cities to live because the cost of living is affordable for working people in the city and the quality of life is one the highest in the World.

How Vienna Cracked the Case of Housing Affordability:

https://thetyee.ca/Solutions/2018/06...-Case-Cracked/
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Old 05-31-2020, 12:00 AM
 
4,536 posts, read 2,536,769 times
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The core of the issue is affordable housing. I mean that in terms of asset prices, not rent prices. When 1200 sq. ft. 3/1 houses in a mediocre part of town are going for over $300k, rentals are going to be expensive. Rent prices aren't high relative to real estate prices in this city. $300,000 houses are renting for $1700. That's hardly price gouging. The issue is that real estate itself is too expensive. I largely blame low interest rates for this. It is shocking how much money banks will give you to buy a house with rates where they are. Many people will buy as much house as they can.

Housing is an asset class, but it's also a basic necessity for human life. I'm not sure what the answer is, but we do need more affordable housing. It isn't the landlord or property management companies' fault, though. Like everyone else in every other industry, they are just getting the market value of what they're selling.
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Old 06-01-2020, 02:31 PM
 
430 posts, read 978,187 times
Reputation: 221
I had a shocking offer last week. My apartment complex offered me another year lease with 0% increase. I have never had that before. I have seen some do 1% increase and then jack up extra fees. Or 3-5% increase and maybe lower other fees. Never have seen a 0%.
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Old 06-01-2020, 04:31 PM
 
Location: Colorado Springs
3,698 posts, read 2,931,598 times
Reputation: 4559
I think we'll see more of that and maybe even some reductions...in fact, once a major city makes headlines for it, I think we'll see it start a landslide of similar moves in other metros.
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