Well I'm not a slumlord renting to trash. I've had 2 different tenants and they were both clean, steadily employed and punctual rent payers. I guess it's only a matter of time before I'm faced with doing an eviction.
Fewer and fewer people save money, so that means no down payments, and fewer homeowners. If buying is a form of forced saving, renting is a form of voluntary consumption. Pretty soon the boomers who were relying on their house as a retirement fund are going to try to sell their homes to the millenials who don't have any savings for a down payment. The desperate selling to the destitute. And by that time the big investors will have realized that residential real estate makes a poor investment.
In the above link, it is OK to pay 50% of income to residence expense, since it is free country. However, I heard that OECD countries has long-term average of 22% (=rent/income). Therefore to maintain a good life, one should pay at least 20% but no more than 25%. If they SHOULD pay 50% ONLY in US, then many leave US to other countries. It is same as that US person buy Chinese laptop at 1K, if US-made latop costs 2K. But it is OK if you buy US laptop at 2K. I have NO objection at all.
Landlords will hike rents by 8% this year http://finance.yahoo.com/news/landlords-hike-rents-8-090035135.html
These high rents won't last forever, I remember a friend of mine back in late 90's early 2000's couldn't give away his 1 bedroom apartment, rents were declining and he actually rented where it was still costing money to carry it...so his mortgage, taxes etc weren't even covered by the rent he was making, he ended up selling it around 2003 or 2004, anyway the rents have since skyrocketed. ...what I'm saying is the high rents are just a trend, I see these high rents breaking down sometime in the next 2-3 years....i have friends out in California that as soon as their 1-2 year lease is up they raise them by 100-200 a month...rents are out of control....
8 8%, I thought the average was around 3%.....8%, the Fed keeps saying inflation is non existent yet between rents and medical costs it seems inflation has to be running at least 5%+
Look at those year over year increases in rents in those cities, that's scary....the funny thing is no one welcomes recessions but if they did welcome them you would see those rents come dow pretty quick, also the other reason for these skyrocketing prices is also due to the bailouts in 2009 along with the trillions of dollars the fed pumped in to prop up the system.... New York and San Francisco are still the most expensive cities to rent in in the U.S. Rents in San Francisco surged 14% to $3,530 year over year for one-bedroom apartments available in September, a separate analysis of one million listings of 50 cities by apartment rental site Zumper found, and they rose by over 5% to $3,160 in New York. Rent has jumped in secondary cities too, including Oakland, Calif. (up 23% year over year to $2,030), Jacksonville, Fla. (up 16% to $870), Kansas City, Mo. (up 15% to $770) and Fresno, Calif. (up 17% to $770). In New York, the real estate market is also dominated by brokers who charge a fee of 15% of the annual rent. On an apartment with a $2,000 monthly rent, Thornton needed a $3,600 broker fee, $2,000 deposit and $2,000 first month’s rent. “The effect on New York’s economy is not sustainable over the long-term,” he says. Real estate developers are charging “aspirational” prices in up-and-coming neighborhoods before — not after — the neighborhood has blossomed, he adds. “I think there are slightly lesser versions of this happening in smaller cities all over America. They have got us over a barrel. What else are we going to do? We have to move somewhere.” He’s still looking.
I am both a renter and an owner and neither is much better than the other. I live in SF, and renting is a nightmare. 14% rental increases may be a little on the low end. Its routine to see increases of 50%-100% year over year depending on the neighborhood you live in and what sort of building your apartment is in. I have a coworker who lives in Oakland, and he was paying $1700 for a one bedroom in a nice apartment complex. Over the past year there have been a couple tech companies move in a few blocks away and some dumpy buildings were converted to brand new condos. His new rent this year was going to be $3400 a month, so he had to move out. I am definitely in the camp rooting for a US recession, just to pop the tech bubble and bring housing costs down. On my rental property (in another state), the rents aren't rising as fast as my costs. My property taxes have a fixed increase, but the city and county keep introducing new bullsh$t levies each year for schools, libraries, ect...
Although the above might be true in small area in NYC, not all places has same situation. I heard that in capital country over 400 years (modern capitalism after stock market appearance), historical rent ratio of income was roughly 22%. For example if you bring 6K to home, then appropriate rent is 6000*0.22 = $1320. One cannot survive in the long run with more than 25%, and with no saving for after 60. Please do NOT pay attention to the NY situation. Many Wall Street worker can pay 2K since his income is more than 10K a month. Why don't you see nation wide statistics for RIR=Rent/Income.
Welcome to argue the above red-colored statement. For example, if all NY rental property asks 2K a month (although it is legal obviously in free country), then many will move out of NY or to another country. There us NO landlord who keep vacant rental property for many years. He should be broke with accumulating interest and tax, with no rent from the resident.