What is going on with rental prices?

chada75 said:

In reply to SyntheticBlinkerFluid :

I honestly look at what some of the rents go for in this country and think that why won't some folks buy an small rv and get a 24 hour gym membership. That way, they could save a fortune on rent and have a place to take a shower.

Well that depends. I had a plan a while back to buy an RV and live near San Diego where my brother lives. To get an extended stay plot out there would cost upwards of $1200 a month plus my trailer payment and insurance, and I’d be right back to where I am now. Now that’s being said. I found a nice place about 25 minutes east of SD and it would cost $800 a month there, but after my trailer payment and insurance, it would be back up around $1400 a month or more. 

What're everyones thoughts on the "right" of people to own property, or land, relatively cheaply, who don't live in a given area? Should Chinese nationals be able to buy property in the USA just because it's a good investment? Should we tax second homes exponentially higher than primary homes? How do you lower the incentives to owning property without raising prices on people who rent?

I think the idea of lots of people owning lots of homes is kind of a "Boomer" thing. Maybe I don't know history too well, but back in the day it seems that people owned a primary residence where they worked, and another cabin or vacation home they visited. Those second homes were usually extremely small, cheap, and in areas where employment was limited. Some people (landlords) might own rental properties, but they were usually occupied, and the rent earned was the profit, not the tax savings or sheltering. 

Today, people own multiple gigantic homes as a way of sheltering money, in some cases those homes sit vacant, and the are often in areas with high demand, due to strong job markets. 

Thoughts?

pheller said:

What're everyones thoughts on the "right" of people to own property, or land, relatively cheaply, who don't live in a given area? Should Chinese nationals be able to buy property in the USA just because it's a good investment? Should we tax second homes exponentially higher than primary homes? How do you lower the incentives to owning property without raising prices on people who rent?

I think the idea of lots of people owning lots of homes is kind of a "Boomer" thing. Maybe I don't history too well, but back in the day it seems that people owned a primary residence where they worked, and another cabin or vacation home they visited. Those second homes were usually extremely small, cheap, and in areas where employment was limited. 

 

Today, people own multiple gigantic homes as a way of sheltering money, in some cases those homes sit vacant, and the are often in areas with high demand, due to strong job markets. 

 

Thoughts?

They are taxed higher, as they have to pay income taxes and capital gains taxes. It is an open market. Anyone can buy. Even you can, through REITs. 

Most people that I know that have a significant investment in real investment property (menaing, not vacation property) are doing it either as a full time job, or else as an alternate investment. In the long run, it isn't much different than investing in the stock market. And, they're taking risk. A lot of risk. I don't have any problem with it. As to your statement about them sitting vacant, or as a "money shelter"... well, I'm not really seeing people let homes sit vacant if they're worth anything. They're either rented out, for sale, or being used by the owner. 

Phrase your thought different way: 

Today, people own multiple desirable cars as a way of sheltering money, in some cases those cars sit in a garage for years at a time, and the are often models with high demand, due to strong performance. 

Should people only be able to own as many cars as they have drivers? Should they ever be allowed to sell them for more than they bought them for?

In reply to pheller :

I am trying to understand why you are placing a high priority on “renter’s rights”, and almost none on “property owner rights”. 

I think you are assuming the government should care that rents are high. I don’t see why they should. 

High property values mean high evaluations which mean a high tax base. 

De-insentivizing private investing in rental property would cause a burden on the system to provide housing subsidized by the government in some way for renters. 

It looks like a lose/lose for government to me. 

In reply to pheller :

...I am also wondering why you see this as a government problem, or a “they” problem, and not a “you” problem.

When I suggested you convert your house to an Air BnB space (which would provide additional income for you, AND enable you to help be a reasonable provider in the rental market), your basic answer was, “I don’t wanna”. 

I think that is a perfectly reasonable answer. 

But I would suggest that when it comes to providing low cost rental solutions, all those “big bad landlords” also simply “don’t wanna”. 

Whose burden should it be?

10 years working in poor areas with Habitat for Humanity taught me that the greatest hurdle to change is usually “NIMBY”- “Not In My Back Yard”. It’s easy to have great solutions in other people’s yards, in other people’s neighborhoods, and with other people’s money. 

Many people look at their landlords and say "that person just sits there and makes heaps of money doing nothing". Landlords respond by saying "I've made an investment and taken on risks, I should get rewarded for that".

Many people look at (insert anything else here stock, bond, bitcoin, oil, classic car, etc) investors and say "that person just sits there and makes heaps of money doing nothing". Investors respond by saying "I've made an investment and taken on risks, I should get rewarded for that".

Only difference is that landlords and investors have different names.

SVREX and Robbie said what I was trying to, just clearer.

I really don't see the issue that you're seeing.  You're basically complaining that the more desireable neighborhoods are... well, more expensive. 

I'm totally with imposing extra fees/taxes on foreign buyers. 

Look at Vancouver. They have imposed a 15% foreign buyers tax (not that it will matter that much) because the Chinese and Russians are pricing out everyone in the downtown/coastal areas. 

It's kind of like Ford wanting to pay his people enough to afford to buy the product they built. 

It sucks massively to work in a city you can't afford to live in. 

*insert capitalism argument even though even the US is far from a free market.

z31maniac said:

It's kind of like Ford wanting to pay his people enough to afford to buy the product they built. 

That’s actually a myth. Ford didn’t do that.

But I agree with you that it might be worth taxing foreign investors (depending on the details). 

SVreX said:

In reply to pheller :

I am trying to understand why you are placing a high priority on “renter’s rights”, and almost none on “property owner rights”. 

I think you are assuming the government should care that rents are high. I don’t see why they should. 

High property values mean high evaluations which mean a high tax base. 

De-insentivizing private investing in rental property would cause a burden on the system to provide housing subsidized by the government in some way for renters. 

It looks like a lose/lose for government to me. 

Seems like pheller is thinking that limiting potential buyers would increase housing supply, and therefore decrease prices. That way, he could buy a nicer place, (or a similar place in a nicer area) for less money. There's nothing really wrong with wishing stuff wasn't as expensive, but it's not realistic. I don't think he really cares about renters rights or property owners rights as much as he wants to have it all, without having to pay a premium for it. It's similar to his desire to have a high paying job that also lets him take tons of time off.

There will probably always be cases where somebody finds the perfect real estate deal, or has the 6 figure job with 10 weeks of paid vacation every year but that's not very common. In the real world, there's always a price to pay for nice things and it's usually a high price. Could be money, or time, or strenuous labor involved, but there's always some form of sacrifice required in order to obtain nice things, live in a desirable area, make high wages, etc.

z31maniac said:

It sucks massively to work in a city you can't afford to live in. 

I'm amazed that so many put themselves in this situation by choice.

SVreX said:

z31maniac said:

It's kind of like Ford wanting to pay his people enough to afford to buy the product they built. 

That’s actually a myth. Ford didn’t do that.

But I agree with you that it might be worth taxing foreign investors (depending on the details). 

https://www.seattletimes.com/business/real-estate/vancouver-b-c-tries-again-to-thwart-foreign-real-estate-speculators/

It's purely to try to stop foreign speculation driving up the housing market to unaffordable levels. 

But as I stated, that small of a tax doesn't really matter. If you have millions to buy overseas property as an investment, it's not like the price going from $1 million to $1.15 or 1.2 million is going to be the deal breaker.

ProDarwin said:

z31maniac said:

It sucks massively to work in a city you can't afford to live in. 

 

I'm amazed that so many put themselves in this situation by choice.

You are correct. It is this easy. Just uproot your entire family and move, you and your spouse will be able to just find jobs elsewhere.

z31maniac said:

ProDarwin said:

z31maniac said:

It sucks massively to work in a city you can't afford to live in. 

 

I'm amazed that so many put themselves in this situation by choice.

You are correct. It is this easy. Just uproot your entire family and move, you and your spouse will be able to just find jobs elsewhere.

Human beings have been uprooting their lives, and moving to different places in search of a better life for as long as there have been human beings.

Eh.  I didn't say it was easy.  But neither is working in a city you can't afford to live in.

I'd rather put in some hard work fixing the problem vs. dealing with it until I die/retire/magically win the lottery/etc.

Another aspect to popular places with high demand is often a healthier population, mentally and physically. Unforunately, the most affordable places in the USA are probably also the most unhealthy, from a demographics standpoint. Flat land is boring, lack of public green space means less activity, and that can effect generations. 

It isn't always about cars and cheap houses. Some of us want more out of life (at least while being active regularly is an option). They call it a "lifestyle tax" that is, in order to live a certain lifestyle, you pay a certain amount more to do it. 

I know eventually, when the babe enters school, that I'll want to be someplace where she can walk to a good school, we don't need huge incomes, and maybe I can have a better driveway/garage situations to have a fun car again. Until then, I'm pretty damn happy in an expensive, outdoorsy town surrounded by a few hundred thousand acres of national forest.