Dear people considered about rising rates

[gzz]

1. I am not worried myself because mine just got locked at 3.25% for 30 years.

2. Even during the recession California rents were rising.

3. An economic recovery is the only thing that will cause rates to rise. It is very simple: there are more people who want to save than there are credit-worthy people who want to borrow.

4. Rent/Own is pretty nuts now. People who bought in 2010-2011 and refi-ing today have ownership costs 20-40% below current prices. That is why inventory is going down so fast.

[scaredyclassic]

rent v own is a little wild right now. i actually could not comfortably afford to rent the place I live in, I think, if it were a rental….seriously…

[CA renter]

Nor could we. I’m so glad we started renting well before rents started rising in 2005. Our long-time landlord never raised our rent after the first year, which was written into our original lease — though I raised our own rent once in order to maintain control over it. Rents went up about about 35% while we were renting, and we would really have had to stretch if we had been paying market rent the whole time.

Rents are crazy, and with interest rates so low, it only makes sense for people to choose buying over renting as long as they intend to stay in their homes for the long term. I really feel sorry for prospective buyers right now.

[gzz]

My rent was also never raised while in SD. Goes to show that dealing with people is better than the owners of big corporate complexes. They raise rent annually as much as they can.

[CA renter]

Definitely, gzz. We passed on a number of other rentals because they were professionally managed. We knew we wanted to deal with the landlord in person. Ours lived just a few blocks away, too, so we got to have a more personal relationship with them, as well. We were soooo lucky to have them as our LLs. They are incredibly awesome people.

[(former)FormerSanDiegan]

[quote=CA renter] We were soooo lucky to have them as our LLs. They are incredibly awesome people.[/quote]

Now that’s something you don’t hear too often…

Kinda the opposite of this Eddie Murphy Classic role as Tyrone Green, Prison Poet:

[scaredyclassic]

my landlord prior to purchase was super cool.

we gave him one years rent upfront when we moved in in 2006 for a discount. i figured he’d hold on to the place for at least a year. this was pre-crash, but i still had potential landlord defaults on my mind, even in 2006.

i was kinda early.

i think he gave us 15% off or so, which I figured was better than a 20% return on the 20 odd thousand I was giving him, tax-free. not bad, really…

we really started to seriously save for a house around then, sincei didn’t have to pay rent for a year, and we could really see our savings add up fast. became a habit. next thing we knew we had over 100k in the bank.

then when the year was up, he continued to rent to us at the discounted rate…

we were there 4 1/2 years and i paid early every month.

on the other hand, i didn’t complain about little things. IMO, i was a reasoable, cool tenant.

my wife occasionally wanted me to complain about smallish things but i never did.

he did necessary repairs, like a leaky gas burner, quick. he was a good calm dude.

[CA renter]

Funny. That’s exactly what we did. Paid the first year up front, then paid 6 months in advance from that point forward. Like you, we worried about a potential default, so were glad to find a LL who was an original owner and who came across as very conservative (they owned it outright).

We also did most of the repairs and maintenance unless it was a really big deal (like a $10K+ mold remediation project in the kitchen). We were there for just shy of eight years, and couldn’t be more grateful for the entire experience. Because we lived there, we were able to find out when our current house (just a few houses away from our rental) was being put on the market, so we were able to make an offer before it ever hit the market.

The best part is that we got to keep all of our awesome neighbors (minus a couple) and our kids get to play with the same kids they’ve grown up with. 🙂

[Author]

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