The Conservative Cave
Current Events => The DUmpster => Topic started by: zeitgeist on September 25, 2010, 05:37:10 PM
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Ok, ok, so dummies are easily confused. This is a small bonfire with some potential 2010 DOY Candidates.
http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x9196927
AlphaCentauri (1000+ posts) Fri Sep-24-10 09:13 PM
Original message
House prices are down, why rents still high?
The economy would recover faster if rents were down as house prices are.
First up that perennial favorite, bobo the hobo
bobbolink (1000+ posts) Fri Sep-24-10 09:14 PM
Response to Original message
1. Because we don't have anywhere else to go. Sound familiar?
Next a quote from the rich and infamous.
EFerrari (1000+ posts) Fri Sep-24-10 09:28 PM
Response to Reply #6
11. It depends. If you are renting out apartments
and houses suddenly come open, your market goes to hell. We've nearly halved the rent in some of our units and still have vacancies. With a full building, we only break even any way. With a half empty building, it's hard to make the utilities, the taxes, and so on.
Don't you just love an innocent question??
pnwmom (1000+ posts) Fri Sep-24-10 09:33 PM
Response to Reply #11
14. If you only break even with a full building, why even be in the business?
Sounds like a lot of work, especially for no money!
Oh, wait, I meant:
EFerrari (1000+ posts) Fri Sep-24-10 10:04 PM
Response to Reply #14
18. It's an investment, not a cash cow.
But believe me, I've often said exactly the same thing to the family.
And here is the take from another mean spirited liberal exploiter of the lower caste like bobo.....
Samantha (1000+ posts) Sat Sep-25-10 12:02 AM
Response to Original message
30. Well, I lost $100,000 off the value of this house
Edited on Sat Sep-25-10 12:02 AM by Samantha
but my property taxes still went up. So did my utilities. So did the rent for the basement here. I couldn't carry the place by myself with everything going up the way it has at the price I formerly charged. Utilities alone in Maryland continue to rise. My theory is with so many bankruptcies and foreclosures, cities still need to make a certain amount to cover their budgets. They have fewer people to collect from, so they just hike up the cost of those still here.
Sam
And there went the hopes and dreams of another basement dwelling Cheeto eater. Mean Sam, mean, :hammer:
suck it up and keep the Cheeto eatin tenant happy. They only get ten cents a post ya know. :popcorn:
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AlphaCentauri (1000+ posts) Fri Sep-24-10 09:13 PM
Original message
House prices are down, why rents still high?
The economy would recover faster if rents were down as house prices are.
Well let me see, people who own homes that choose to rent them have their taxes to pay and their mortgage on that place if they still carry 1, add to that insurance, the fact that the landlord has to make all repairs, and they'd like to maybe make a small profit.
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The OP is so clearly innocent of any actual economic acumen that I do sincerely hope someone else with a better grip on reality is in charge of the household money and simply doles out a Cheetos-and-pizza allowance to the poor simpleton.
:loser:
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Our rent has been dropping, but then again we live in Las Vegas. Our current apartment's rent rates are at the 1998 prices. Our lease is up in November. We will see if it goes up or down. My guess is down.
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Samantha (1000+ posts) Sat Sep-25-10 12:02 AM
Response to Original message
30. Well, I lost $100,000 off the value of this house
Edited on Sat Sep-25-10 12:02 AM by Samantha
but my property taxes still went up. So did my utilities. So did the rent for the basement here. I couldn't carry the place by myself with everything going up the way it has at the price I formerly charged. Utilities alone in Maryland continue to rise. My theory is with so many bankruptcies and foreclosures, cities still need to make a certain amount to cover their budgets. They have fewer people to collect from, so they just hike up the cost of those still here.
Sam
[
Hmmmm,....let me ask you Sam. How's that "hope and change" working out for ya?!?! Your Dumbo is responsible for your increases in utilities/taxes and so forth. So, what happens when dumbo wants to push his Cap & Trade bill through? Do you think your utility bills will lower?! :hammer: :hammer:
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^Not to be a pain in the ass or anything, but do you need some instruction on the use of the "quote" function on the board?
:-)
doc
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^Not to be a pain in the ass or anything, but do you need some instruction on the use of the "quote" function on the board?
:-)
doc
PM sent. lol :cheersmate:
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PM sent. lol :cheersmate:
I knew you could do it!!
Thanks....
doc
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Our rent has been dropping, but then again we live in Las Vegas. Our current apartment's rent rates are at the 1998 prices. Our lease is up in November. We will see if it goes up or down. My guess is down.
Then you'd be the exception, nationally speaking.
When the market was red-hot for housing, particularly in SoCal, home prices were going up by 20-25 percent in the early part of the decade, whereas rents were only increasing by 3-4 percent per year (based on keeping track of places we had lived before we bought). Now home prices have peaked and are declining, but rents have yet to "catch up". I can understand were Vegas is different because housing prices are SO depressed and there's so much available inventory, apartments really do have to compete. Most areas in the country, they don't because apartment occupancy runs in the high-90's.
Case in point--when we bought out house in CA in 2001, Prop 13 says we were limited to a max 2 percent per year increase, regardless of the home's real value (until someone else bought it and it was reappraised).
So if we bought in 2001 for $300K, the 2002 value would max out at $306K, 2003 at just over $312K, and so on.
Had I managed to hold onto the house until now in CA, it would have a taxable appraised value of about $360K based on a purchase 9 years ago at $300K. However, the PRICES, which peaked in 2006-07, are still well above a 2 percent annual gain...for example, my house sold for DOUBLE the purchase price a mere 5 years after we bought it, and even with the downturn, is still showing a net positive (comps in my old neighborhood are still in the $550-600K range). Or you could be like the poor dumb bastard who bought our house when the prices were at their absolute peak and not get a drop in his appraised value, unless he managed to apply for one--and trust me, the state of California will NOT make that an easy process on you.
Or, if you're like us up here in NH, even when the appraised value of a home dropped 20 percent since purchase (mine actually dropped 17 percent), the town still has X dollars budgeted, and even with mandated spending caps, the mill rates MUST increase to overcome the decrease in appraised value, which is what happened here--my tax rate went from $20 per $1000 appraised to just under $23 per $1000 appraised, yet I managed to (for now) pay less.
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Well let me see, people who own homes that choose to rent them have their taxes to pay and their mortgage on that place if they still carry 1, add to that insurance, the fact that the landlord has to make all repairs, and they'd like to maybe make a small profit.
You have to understand though the first two rules of DUmmy economic theory...
Rule #1 Give me money
Rule #2 Give me more
The pot smoke makes things kind of hazy after that.
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You have to understand though the first two rules of DUmmy economic theory...
Rule #1 Give me money
Rule #2 Give me more
The pot smoke makes things kind of hazy after that.
:lmao: :rotf: :lmao: :rotf: :lmao: :rotf: :hi5: given!
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Any accountants here who want to explain how this will work out ?
Quote
EFerrari (1000+ posts) Fri Sep-24-10 10:04 PM
Response to Reply #14
18. It's an investment, not a cash cow.
But believe me, I've often said exactly the same thing to the family.
Let's say in this example they operate at break even and deduct the cost of improvements on a yearly basis to lower their taxes. Since this is an investment property how will this affect the cost basis on sale? What percentage of the profit will be taxable and what will be the tax rate on capital gain? Methinks someone may be in for a rude awakening.
Seems there are some real exploitation capitalists hiding at the dump. (How many are running illegal 'basement apartments' and not declaring the income on their taxes?) Sam, you paying taxes on the income from that hovel or are you commiting tax evasion??
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Then you'd be the exception, nationally speaking.
When the market was red-hot for housing, particularly in SoCal, home prices were going up by 20-25 percent in the early part of the decade, whereas rents were only increasing by 3-4 percent per year (based on keeping track of places we had lived before we bought). Now home prices have peaked and are declining, but rents have yet to "catch up". I can understand were Vegas is different because housing prices are SO depressed and there's so much available inventory, apartments really do have to compete. Most areas in the country, they don't because apartment occupancy runs in the high-90's.
Case in point--when we bought out house in CA in 2001, Prop 13 says we were limited to a max 2 percent per year increase, regardless of the home's real value (until someone else bought it and it was reappraised).
So if we bought in 2001 for $300K, the 2002 value would max out at $306K, 2003 at just over $312K, and so on.
Had I managed to hold onto the house until now in CA, it would have a taxable appraised value of about $360K based on a purchase 9 years ago at $300K. However, the PRICES, which peaked in 2006-07, are still well above a 2 percent annual gain...for example, my house sold for DOUBLE the purchase price a mere 5 years after we bought it, and even with the downturn, is still showing a net positive (comps in my old neighborhood are still in the $550-600K range). Or you could be like the poor dumb bastard who bought our house when the prices were at their absolute peak and not get a drop in his appraised value, unless he managed to apply for one--and trust me, the state of California will NOT make that an easy process on you.
Or, if you're like us up here in NH, even when the appraised value of a home dropped 20 percent since purchase (mine actually dropped 17 percent), the town still has X dollars budgeted, and even with mandated spending caps, the mill rates MUST increase to overcome the decrease in appraised value, which is what happened here--my tax rate went from $20 per $1000 appraised to just under $23 per $1000 appraised, yet I managed to (for now) pay less.
It is all a crap shoot now a days.-------Rent VS Owning-----
Benefits of renting an apartment-----little to no yard work---Hotwater heater, winter heater or air conditioning ,stove or refrigerator blows up, not your problem. A bad storm takes off the shingles on the roof, a flood comes along----not your problem.
Noisy neighbors can be a problem, as can the hike in rent each year.
Then come the rules, no pictures hung with nails on the wall, no pets, no smoking no guests that stay more then 7 days.
Buying a home has even more problems. Anything that goes wrong is your responsibility, from needing new wiring, up dating plumbing, major appliances die on you, wondering if your insurance company will drop you due to storm damage or the area you bought into takes a turn for the worse. One can spend countless hours painting the outside, mowing the grass, BUT, if a meths lab moves in next to you, the neighbors allow their property to go to hell, no way can you just move out and sell for anything but a loss.
Then owning has to take into consideration that if you wish to install a garage, put up a high HAM antenna, raise chickens then there are zoning problems and the scum bags that surround you can put a halt to your project are Abattoir's and have no need to put out one penny for a lawyer but YOU do. Every improvement you make will cost you an arm and a leg, build a deck and property taxes go up, put in a pool, ouch, that will hurt on resale as I know of people that when selling had to fill in their $40,000 pools to lower the huge tax hike for a buyer.
All up to you how you wish to live, spend $2,000 bucks on a flat screen TV 0r take a Cruse, buy a brand new car and pay $400. a month or visit a state that you have never been to.
It is priorities here, What do you want to do with your life.??
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Not really--with the exception of RAPIDLY declining markets, it's always better to own than rent. Hell, I know a bunch of folks who bought in CA on the downside and turned the houses into rental properties, going for MORE than the monthly nut of their mortgage/taxes/insurance.
And when the market recovers (and mark my words, it will eventually) those people are going to be the ones who are that much farther ahead.
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Then come the rules, no pictures hung with nails on the wall, no pets, no smoking no guests that stay more then 7 days.
That all depends where you rent and who your landlord is, really.
All the apartments we rented at allowed us to hang up pictures. It was drilling into the wall that was a no-no, unless you knew how to plug the wall before the final walk through.
We have four cats.
You can smoke in your apartment. We are non-smokers, but you are allowed to smoke in your unit. Most of our neighbors chose to smoke outdoors though.
We can have guests stay for a couple of weeks if we want, they just cannot accept mail without being added to the lease.
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Well let me see, people who own homes that choose to rent them have their taxes to pay and their mortgage on that place if they still carry 1, add to that insurance, the fact that the landlord has to make all repairs, and they'd like to maybe make a small profit.
'Zackly. Unless a new owner just bought the place at a big write-down price in a distress sale, or the old one refinanced at a huge savings, the current housing market prices have no relation whatsoever to the owner's fixed costs and not much effect at all on the variable ones (Some might go lower but some would rise, such as property taxes in all likelihood). If the owner has any room to lower prices for competitive reasons, that's all on the profit margin end, and if occupancy is down or delinquency up there may not even be one, or the owner may already be in the red just trying to hang on for better days to come.
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Any accountants here who want to explain how this will work out ?
Let's say in this example they operate at break even and deduct the cost of improvements on a yearly basis to lower their taxes. Since this is an investment property how will this affect the cost basis on sale? What percentage of the profit will be taxable and what will be the tax rate on capital gain? Methinks someone may be in for a rude awakening.
Seems there are some real exploitation capitalists hiding at the dump. (How many are running illegal 'basement apartments' and not declaring the income on their taxes?) Sam, you paying taxes on the income from that hovel or are you commiting tax evasion??
If they are "breaking even"....they are able to cover the mortgage, taxes, repairs. They are not showing any profit.
When they go to sell it....they merely quote the operating expenses(excepting the mortgage payment) as they are, and the rent amounts. They don't quote their mortgage payment amount as it is not applicable to a potential buyer.
To a buyer paying cash, the property is possibly a "cash cow" as they will only have operating expenses, most if not all will be deductible.
To a buyer paying with a mortgage, the new buyer will have to determine if the property is worth the costs as the mortgage payments will have to be figured into the operating expenses for the new buyer.
Capital gains have to be paid on all property sold with the exception of a primary residence that seller must have occupied 2 out of the last 5 years. Capital gains is based on purchase price compared with sales price, with improvement costs(new roof, windows, HVAC systems - stuff that becomes permanent to the building) taken into consideration. All other deductions/income (property taxes, rent monies, repairs, etc) are entered into yearly taxes.
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If they are "breaking even"....they are able to cover the mortgage, taxes, repairs. They are not showing any profit.
When they go to sell it....they merely quote the operating expenses(excepting the mortgage payment) as they are, and the rent amounts. They don't quote their mortgage payment amount as it is not applicable to a potential buyer.
To a buyer paying cash, the property is possibly a "cash cow" as they will only have operating expenses, most if not all will be deductible.
To a buyer paying with a mortgage, the new buyer will have to determine if the property is worth the costs as the mortgage payments will have to be figured into the operating expenses for the new buyer.
Capital gains have to be paid on all property sold with the exception of a primary residence that seller must have occupied 2 out of the last 5 years. Capital gains is based on purchase price compared with sales price, with improvement costs(new roof, windows, HVAC systems - stuff that becomes permanent to the building) taken into consideration. All other deductions/income (property taxes, rent monies, repairs, etc) are entered into yearly taxes.
I can't help think the OP figures the investment's value will come from appreciation at sale, color me dubious. If you rent at break even or a loss you could end up working for nothing. There are lots of headaches with rentals not all are tenant related.
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Seems there are some real exploitation capitalists hiding at the dump. (How many are running illegal 'basement apartments' and not declaring the income on their taxes?) Sam, you paying taxes on the income from that hovel or are you commiting tax evasion??
That's what i have always thought. Whenever any situation comes up the DUmbasses naturally think of some mean and sinister motive. Me thinks that it is only because that is what the DUchebag would have done if similar circumstance were to happen to him/her/it. I bet 90% if the time that is correct.
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I can't help think the OP figures the investment's value will come from appreciation at sale, color me dubious. If you rent at break even or a loss you could end up working for nothing. There are lots of headaches with rentals not all are tenant related.
The investment value should come when the OP sells the property. Depending on when and what they paid for the property, they should see an appreciation. Even with the market down now, it will go back up. May take until after the new president is elected and inaugerated to see it start to improve though.
In the meantime, they are getting some tax write-offs...enough to offset the income from the rent and maybe more that affects their bottom line on what they pay to the IRS.
There are a lot of factors involved, that from our standpoint in reading the OP, we don't know.
In theory, there should be an appreciation over time. Provided OP got a good deal on the original purchase, sell at an appreciated rate, and doesn't get screwed over in capital gains. I know a lot of investors who have purchased rental properties over time, and those properties provide retirement income.
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The investment value should come when the OP sells the property. Depending on when and what they paid for the property, they should see an appreciation. Even with the market down now, it will go back up. May take until after the new president is elected and inaugerated to see it start to improve though.
In the meantime, they are getting some tax write-offs...enough to offset the income from the rent and maybe more that affects their bottom line on what they pay to the IRS.
There are a lot of factors involved, that from our standpoint in reading the OP, we don't know.
In theory, there should be an appreciation over time. Provided OP got a good deal on the original purchase, sell at an appreciated rate, and doesn't get screwed over in capital gains. I know a lot of investors who have purchased rental properties over time, and those properties provide retirement income.
Yes, several folk I know do this, but, to the rank and file dummy they are little more than greedy capitalist pigs exploiting the little guy. Dummies are among the worlds greatest hypocrites. Wait until Obie-wun and friends increase capital gain rates and watch them squea. The big cash out with be a costly adventure. And what will happen with no mortgage and depreciation to ameliorate the tax bite on the rent income under the dims? Soak the rich and all that filthy unearned income. :naughty: They will love paying their fair share. :rotf:
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HEY DUMMIES...don't like paying rent...it's your lucky day...it's that time of year when WAL-MART usually runs sales on tents...buy one and stop paying rent.
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HEY DUMMIES...don't like paying rent...it's your lucky day...it's that time of year when WAL-MART usually runs sales on tents...buy one and stop paying rent.
Come on JR dummies don't like payin period. Half live in the basement at mom an pops. The other half couch surf and leach off society like bobo the hobo. BTW have you ever watched dummies put up a tent? I am here to tell you it can be a most entertaining comedy show. Or the great shadow shows from leaving the lantern on. :whatever:
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EFerrari
It's an investment, not a cash cow.
So rent is break even, you're just wanting to make money off the sale, is that it?
The army vet primitives wants to tax any capital gains you might happen to make off the sale of the rental units at 90%. You two might want to have a word.
.
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So rent is break even, you're just wanting to make money off the sale, is that it?
The army vet primitives wants to tax any capital gains you might happen to make off the sale of the rental units at 90%. You two might want to have a word.
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:hi5:
Pretty much sums up the whole reason for this thread.
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Come on JR dummies don't like payin period. Half live in the basement at mom an pops. The other half couch surf and leach off society like bobo the hobo. BTW have you ever watched dummies put up a tent? I am here to tell you it can be a most entertaining comedy show. Or the great shadow shows from leaving the lantern on. :whatever:
[youtube=425,350]Fukh437NmXQ[/youtube]
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Could you imagine renting to one of these people? They'd be the stuff of landlord nightmares. You know these are use-security-and-last-month-rent-for-last-2-months'-rent people. So if there are any damages beyond normal wear and tear, good luck trying to recover a thing. And if it didn't suit them to have 30 days' or 60 days' notice from the landlord (I give at least 60), they're just the types to put the landlord through housing court hell based on the 30-day law.
I don't suppose the OP also considered little things like fluctuating electricity and NG costs, if electricity is included?
I swear, I really do believe these people think they're supposed to be able to have a home for free. I've encountered this mentality personally. It's amazing.
I don't know much about the housing market, really, but it seems to me that empty, foreclosed houses can't possibly equate with more rental units--somebody has to buy them, keep them up, and then rent them!
Now, I would expect an increase in existing foreclosures to correlate to an increase in squatters.
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Not really--with the exception of RAPIDLY declining markets, it's always better to own than rent. Hell, I know a bunch of folks who bought in CA on the downside and turned the houses into rental properties, going for MORE than the monthly nut of their mortgage/taxes/insurance.
And when the market recovers (and mark my words, it will eventually) those people are going to be the ones who are that much farther ahead.
Bought my home in 1995, the last down-turn in the market. People were having to sell homes that they paid 115K for in the mid 80's for 95K. Perfect for me. :-) Even with the last "slide" I'm still ahead of the game.
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I would think that rental properties would be at a premium, since people are losing their houses and are looking for cheaper places to live. This should apply even more to multi-unit complexes, I'd think.