Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

The Rise of Renting in the U.S

citylab.com

Post reply on HN
Print view View original

91–100 of 380 posts

Re: The Rise of Renting in the U.S

#91

Post by jseliger »

mwsherman wrote: post #78
jpmattia wrote: post #73

I'm a little surprised that there hasn't been a populist rebellion over interest rates. Low rates have inflated pretty much every asset class. This is especially so in housing: The Fed needed to reinflate housing prices in order to make many systemically important players (banks, AIG) solvent again. I have to wonder though: In re-inflating house prices, have we just off-loaded the bad investment to non-systemic insti…

Yes. It’s opposite of what one would do to make housing affordable. Unaffordable housing, especially in cities, is a huge and regressive drag on the economy.

Unaffordable housing, especially in cities, is a huge and regressive drag on the economy.

Housing is unaffordable primarily due to parochial land-use restrictions, as Matt Yglesias explains in The Rent Is Too Damn High (http://www.amazon.com/TheRent-Too-Damn-High-Matters-ebook/dp...) and I explain here: http://jakeseliger.com/2015/09/24/do-millennials-have-a-futu....

If we want cheaper housing, all we have to do is legalizing the building of it.

Re: The Rise of Renting in the U.S

#92

Post by MrApathy »

irishcoffee wrote: post #57
turar wrote: post #42

Earlier quoted context omitted.

I would argue in the current situation of 3.5% mortgage rate, the best scenario is to invest the cash in the stock market. If your returns are anything above 3.5% over the 30 year load amount, you're good.

I read this counter-point a lot. Its never clear to me how you invest the mortgage payment and also pay rent to live somewhere. Am I missing something? Sincere question.

It's an argument that's highly dependent on how high rents and purchase prices are correlated. In many markets the two are somewhat aligned, but on occasion the two diverge significantly. For example, if the cost to rent is $3k and the monthly mortgage on a comparable place (including insurance, RE tax) is $4k, then in the longer term it may make more sense to purchase. Over time the $1k difference will grow smaller and equity will be built up. But what if there's a "frothy" market where investors are bidding up the price of an apartment and after taking ownership they're renting them out rather than living in them. So it's $3k to rent, but $1.2M to purchase, meaning the monthly mortgage is closer to $6k. Well now it makes sense to rent and invest the difference outside of your local real estate market. This obviously looks like an extreme example, but during the housing boom and happened in Miami, Vegas, and many other cities, and it's arguably occurring in many localized markets today.

Re: The Rise of Renting in the U.S

#93

Post by dsp1234 »

sosuke wrote: post #20
tomg wrote: post #5

http://www.nytimes.com/interactive/2014/upshot/buy-rent-calc...

I love it, but it doesn't include the rent being raised every year like clockwork. Right now it's $1500, next year $1575 etc

The option to change the rental growth rate is located under the section titled "What Does the Future Hold?" with a title of "rent growth rate" and a default value of 2.5% (with a range of -5% to 15%)

Re: The Rise of Renting in the U.S

#94

Post by cuddlybacon »

JustSomeNobody wrote: post #68
csomar wrote: post #38

Earlier quoted context omitted.

Apples to Oranges. If you are renting you are prioritizing the location rather than the house. You can't find a house with your ideal gym, but you can't change your city to New York city. The way I see it: If you don't plan to live in that place for the next 15-20 years, then you shouldn't buy. You can always invest your money in more liquid assets.

The money you're not using to pay rent you mean?

But instead you are paying a mortgage. Whether that is a net gain or loss depends on where you live.

Where I am (suburb of Vancouver) a mortgage payment for an apartment of similar size/quality/location to what I have now is about 50% more per month.

Re: The Rise of Renting in the U.S

#95

Post by toomuchtodo »

seivan wrote: post #89
lowglow wrote: post #64

I've sorta turned my back on the standard american dream. Racing to new areas of growth, working to build someone else's dream, getting paid well immediately for performance, paying high rent, etc to afford the image of success, and making friends that participate in this same high ambition culture. Instead of making markets, markets start making you. All the rules, and "norms" we've collected around ourselves to par…

How does it work with having a companion. It might be easier to find someone with the same outlook. But if you're already in a relationship it's going to be an uphill battle.

I might be able to answer that.

My wife and I are early 30s. I spent my 20s in the rat race, working 60-80 hour weeks for material possesions (nice vehicle, luxury townhouse, etc). At some point, I got tired of it and said, "Can we try something different?"

I switched to a fully remote job. We disposed of the townhouse (no equity in it). We downsized our lives (1 car! I ride a bicycle everywhere! You would not imaging how much better shape I'm in) and began to live more frugally with a short-term plan of moving onto a sailboat and living on the ocean for a few years. We save 50%+ of my income (we live in a low cost of living area), we should be able to retire comfortably around age 45. We'll be moving onto our sailboat in the next few months, learning to sail together, and then starting a long circumnavigation around the world (~5 years).

My wife didn't require any convincing. More quality time together for getting rid of things we shouldn't have cared about in the first place? It was an easy sell. If anything, she sold me.

Rule 1: Pick the right partner.

Re: The Rise of Renting in the U.S

#96

Post by mathattack »

jpmattia wrote: post #73

I'm a little surprised that there hasn't been a populist rebellion over interest rates. Low rates have inflated pretty much every asset class. This is especially so in housing: The Fed needed to reinflate housing prices in order to make many systemically important players (banks, AIG) solvent again. I have to wonder though: In re-inflating house prices, have we just off-loaded the bad investment to non-systemic insti…

The flip side though is low rates make it easier to afford the home payments too.

Your mortgage payments on a 30yr loan at 4% on a 300K house are approximately the same as 8% on a 200K house. (Not strictly proportional due to principal payments)

One other thing to consider - it's real rates than matter, not nominal rates. 4% interest rate in a no-inflation environment is the same as 8% with 4% inflation.

Re: The Rise of Renting in the U.S

#97

Post by rocky1138 »

blhack wrote: post #37
rayiner wrote: post #6

I don't think I'd have any interest in every buying a house if it weren't for the insane tax deductions for mortgage interest. Why be stuck in one house when your living situation changes over time (new kids, kids get bigger, kids move away, job changes).

I'm about to get basically kicked out of a house I've been renting for 5 years. My lease expires in April, and I haven't been able to get a response back from the owners about renewing it. I understand, though... My neighborhood basically grew up around me, and my house is by far the cheapest rent in the neighborhood. The owners want to kick me out, remodel/demolish/rebuild the place where I live, and rent it for twi…

If you're in Ontario, after your lease ends, it becomes a month-to-month agreement by default. You don't have to do anything. Landlords cannot evict a tenant after a lease is finished without a valid reason.

Re: The Rise of Renting in the U.S

#98

Post by AndrewUnmuted »

steve-howard wrote: post #46
ErikAugust wrote: post #9

Has anyone released a halfway-decent 'Rate My Landlord' site? Asking for a friend.

They'd need to address the powerful incentive to create fake reviews.

While true, I think the bigger issue is that no landlord would, in their right mind, agree to be represented on a website that is almost certainly going to contain nothing but negative reviews.

If one stops to ponder what would make an individual want to rate their landlord on a "RateMyLandlord" kind of site, then the answer is pretty simple: hatred. The biggest reason for people to write such a review is to complain. Usually, the complaints people write stem from issues related to their inability / lack of desire to pay their rent on time.

Landlords hate not getting paid. Especially in major cities, where regulations basically annihilate their ability to operate in an honest and competitive way without significant impact on their financials. Getting their monthly rent on time is really the only way they can turn any kind of profit on their business.

My income is higher than it has to be for the place I rent here in Brooklyn. But I get charged far below market rents. Why? Because I pay my rent every month on time without hassle. Because I don't wreck my apartment, don't need many repairs, and don't bother my neighbors. So even though I could afford to pay the market rate, I am a 'good' tenant, so I pay the so-called "preferential" rent, which is almost $400 per month cheaper than the rent cap instituted by NYC's horrid rent control laws.

That's right. My landlord could actually charge me more, but he doesn't, because I'm not a shithead. What am I supposed to write in my RateMyLandlord review? That I am a good tenant and get charged lower rent than everyone else? There goes all of my reward for being a decent person.

I don't see any way for such a site to work without damaging reputations or ruining nice arrangements tenants already have with their landlords.

Re: The Rise of Renting in the U.S

#99

Post by sf_rob »

turar wrote: post #42
derekp7 wrote: post #21

Earlier quoted context omitted.

That tax deduction does get smaller every year (as the interest/principal balance changes). The biggest issue I found with owning is that the equity doesn't build up fast enough at the beginning (with a 30-year mortgage), so if you sell after 10 years the costs pile up to the point that you have almost no net proceeds (5% commission, survey/title/transfer tax/inspections, plus prorated property taxes). A 200K propert…

I would argue in the current situation of 3.5% mortgage rate, the best scenario is to invest the cash in the stock market. If your returns are anything above 3.5% over the 30 year load amount, you're good.

Not to mention that this preserves some liquidity. It'd be a shame to have to refinance at an inopportune time to get some equity out of a house.

Re: The Rise of Renting in the U.S

#100

Post by kirykl »

seivan wrote: post #89
lowglow wrote: post #64

I've sorta turned my back on the standard american dream. Racing to new areas of growth, working to build someone else's dream, getting paid well immediately for performance, paying high rent, etc to afford the image of success, and making friends that participate in this same high ambition culture. Instead of making markets, markets start making you. All the rules, and "norms" we've collected around ourselves to par…

How does it work with having a companion. It might be easier to find someone with the same outlook. But if you're already in a relationship it's going to be an uphill battle.

I was in a relationship and after my companion decided to end it, I found out it was to join someone living in a van. Don't be too quick to discount relationships with that lifestyle
Post reply on HN