rent rates these days

[Tuff Otelia]

what are your peoples opinions about the inflated rental rates in the past 3-4 years? do any of you guys remember the time when you were
able to afford to pay an apt. rent on a minimum wage job. What kind of an economy is it where people need to split the costs with a roomie just to get by. outrageous.

[getforfree]

In 1998 my parents were paying $500/month for a 3-bedroom appt. Now those go for more than $900/month.

I know a friend, who pays $1100/ month for a 3-bedroom house rent. I pay almost $1500 for mine, but I own it, and we bought it only 2 yrs ago, when the prices were already inflated, but not as much as now. My uncle pays about $900/ month, but he owns it, and it costs almost as much as mine now, and he bought it about 6 yrs ago, when the prices were lower.

So, if you make minimum wage and work ft, you would barelly cover the rent, and no food or car.

[rooskers]

My rent is $695 and has been that way for awhile. Rent in Southern Oregon has gone up but not nearly as much as house prices. For example a place I rented in 97 for $550 now goes for $695 however a house that sold for $169,000 now sells for $320,000. So it looks like I will be renting for awhile. Note that in a nicer area of town I saw a house for sale for 1.2 million didn't sell last time I went by it I saw a for rent sign. LOL who would rent a 1.2 million dollar house with guest house.

My old 2 bedroom 1 bathroom crappy apartment on close to college cost $700 a month, and the laundry room for all tenants to use had coin-operated machines, so we had to pay to do laundry, and the dryers barely even worked. Oh, and our rent didn't include any utilities what-so-ever... just people partying and fighting outside your door at all hours of the night.

So we moved, and now I'm about 20-30 minutes from campus, but my rent is $443 a month, a larger 2 bedroom 1 bath apt, and water is included in rent, oh and our neighbors are quiet and I love it here!

[bjl584]

I've never rented. I bought a house a few years after I got out of school, so I really don't know what current rental rates are in my market. I had to live in the dorms at college, and that's when I decided that I never wanted to live in an apartment. I grew up in a rural area, so I've always liked my space.

[MonkeyMama]

Rents have gone down considerably in California the last few years, so actually little to complain about here.

I have a friend in San Francisco who paid $1200/month rent for studio apartment in the slums a few years back. She pays closer to $900 now.

We bought a condo in the Bay in 2000 because it was far cheaper to buy a $300k apartment than to rent it for $3k/month. It was 3-bedroom, but in a so-so neighborhood, nothing fancy. The same condo is now $500k or so and $2000/month to rent. It is nice that rent is actually an option over buying around here these days (since buying is hardly an option). Though as a landlord not much of an option if you bought the last few years - you can't even begin to recover costs. For that reason renters have it good.

I now live in a city where people complain about paying $500/month for a studio now. I can't get behind the complaining - it is all so relative. I don't remember ever being able to afford to rent.

[Ima saver]

When I first moved here, the few rentals were gong for 300-400 a month, now they are coser to $1000 a month, out here in the boonies. We do have some new low cost apts. if you have low income. They are really nice and kept up. If you qualify, you can get one for $400 a month.
My very first rental was $65 a month. When I bought my house a year later, my house payment was $96 a month.
I don't know how young people can afford to buy a house anymore.

[Gruntina]

Rent here for a one bedroom apartment goes for about 1200 per/month. The cheapest mortgage I know so far of anyone I know personally who is paying off their home is 2,800 per month for a small 2bed 1 bath home for a 30 year fixed loan. I know some people with larger homes paying about the same that but on an interest only loan with no plans to sell it in the near future because they can not afford to upgrade the home to increase the value to resell. I am not sure what is better, to rent a more expensive apartmet so more than one bedroom or get a home on an interest only loan with the intention to never pay it off?

[Ima saver]

Well, I certainly would not get an interest only loan!

[JanH]

Wow. Interest only loan. I'd never heard of that before. That's scary.

[Ima saver]

I have hearad of them and it is amazing how many people get them. They just pay interest every month and pay nothing off on the principal They are fairly common in California.

[Ima saver]

Do any of you have interest only mortgages?

[Jacklad]

Originally Posted by Ima saver

I have hearad of them and it is amazing how many people get them. They just pay interest every month and pay nothing off on the principal They are fairly common in California.

I guess they are just hoping that the housing bubble doesn't burst - if you can't sell the property for at least what you paid for it, you'd end up still owing.

Jackie

[Gruntina]

Originally Posted by Jacklad

I guess they are just hoping that the housing bubble doesn't burst - if you can't sell the property for at least what you paid for it, you'd end up still owing.

Jackie

I am curious, if you had a choice to rent an apartment for the same price of living in a nice home with yard and etc. The only choice would be Rent or Interest Only loan. In both ways you are still blowing your money away but you are tied to the home with a loan.

Which of the two choices would be best? I am wondering if those that are on the interest only loan are using justification on a home they can not afford? Well honestly with the prices of homes in California and seeing millions of beautiful homes around me, I would have to believe a percentage can't afford the homes since the low end home prices are at a handle bar that is much too high for people who has not acclimated a lot of wealth yet.

[bjl584]

I would tend to think that the only reason to get an interest only loan is to justify buying a house that you could otherwise not afford. Have you noticed that there are suddenly a whole lot of foreclosers in the housing market? That's mostly because the grace period on all of those interest only loans is expiring and the principal is kicking in. All of a sudden people's payments are doubling. Faced with the choice, I think that I'd much rather rent than get into an interest only loan.

[Jacklad]

Originally Posted by Gruntina

I am curious, if you had a choice to rent an apartment for the same price of living in a nice home with yard and etc. The only choice would be Rent or Interest Only loan. In both ways you are still blowing your money away but you are tied to the home with a loan.

Which of the two choices would be best? I am wondering if those that are on the interest only loan are using justification on a home they can not afford? Well honestly with the prices of homes in California and seeing millions of beautiful homes around me, I would have to believe a percentage can't afford the homes since the low end home prices are at a handle bar that is much too high for people who has not acclimated a lot of wealth yet.

Honestly, in that case I would rent. That way, when the roof goes or the plumbing backs up, the landlord is responsible. And I can calculate exactly what it's costing me - with the interest only situation, not only am I still on the hook for the property taxes, maintenance and utilities, but I can still end up owing money if I can't recoup my purchase price.

If I was planning to flip the house, I might take the interest only risk.

Jackie

[Gruntina]

I did not know there was a grace period on the Interest only loan. That is good to know and definetly makes a huge difference in the choices between Renting and Interest only loans

[bjl584]

Yeah, you pay interest only for like the first two years or something, then the principal starts to kick in and gets added to your payment. That's what makes these types of loans attractive to people that could otherwise not afford the house in the first place. You can get a house for a low monthly payment at first. People figure that by the time the principal starts to become due they will be on their feet, better job, have some money saved up, etc. It never really works that way though. If you weren't financially responsible to buy the house in the first place, it's unlikely that anything is going to change in a couple years. Thing is, people just simply walk away from the house when they realize that they can't pay and the bank takes it. They have no equity in the house since they were only paying interest, so they really aren't losing anything except ruined credit. But, somebody that would do that willingly probably isn't worried about their credit or their finances anyway.

[kealina]

Originally Posted by MonkeyMama

I now live in a city where people complain about paying $500/month for a studio now. I can't get behind the complaining - it is all so relative. I don't remember ever being able to afford to rent.

while it's not quite as bad as San Francisco, it's pretty high here in hawaii...
a dinky 1 bedroom in a junk area runs $600 a month... a one bedroom in a decent area easily runs 1,100+ a month and at that price they are immediately filled and rising every year... and these are considered the cheap options... for a nice 1 bedroom you can easily spend 2K here...
it's all very relative and i don't think it was every really low here either... it's just high and steadily increasing...

[MonkeyMama]

Originally Posted by Ima saver

I have hearad of them and it is amazing how many people get them. They just pay interest every month and pay nothing off on the principal They are fairly common in California.

There is no other way to buy a house otherwise in many cases.

Gruntina - ah we are neighbors then...

In our case we refused to go bankrupt over buying a house and moved. I have plenty of relatives who make good money that I Can only imagine have ARMs or interest only loans - I have no idea how you can afford a 800k fixxer upper on 100k income otherwise. But I Am just assuming...

No interest-only here. If I had to buy a house with interest only I would not feel comfortable buying it.