Don’t waste your time on jealousy;
sometimes you’re ahead,
sometimes you’re behind.
The race is long, and in the end,
it’s only with yourself.
Everyone’s Free — Baz Luhrmann
I have ranted on numerous occasions on this blog about people’s desires to feel superior to their fellow man. I find it to be the least desirable feature of California’s culture. This need people have to raise their low self-esteem at the expense of other people is part of the impetus behind my posts on The Grand Illusion and The Reservoir of Schadenfreude. Releasing the anger caused by these interactions is part of the energy I find for writing on this blog. Today I want to address one of these California traditions and examine why homeowners feel superior to renters and see if there is any validity to these feelings.
Any group that feels superior to another group can live with their happy delusions forever. Every religious zealot or racial bigot carries a false belief of superiority.
We can all laugh at them and let them be (assuming the “superior” group is not violent.) If those placed in the inferior position do not share the feelings of inferiority, the “inferior” group is not harmed — their energy is not stolen. It is when this latter group accepts and believes the feelings of inferiority that harm is done. To put it in terms of the housing market, homeowners can feel they are superior if they want to, but it is only when renters believe it that renters are harmed. Other than than the need to prop up a weak ego, why would a homeowner feel superior to a renter?
There was a time when home ownership was obtainable only by people of character. You knew if you met a homeowner, they went through the rite of passage necessary to achieve that status. Demonstrating the character necessary to become a homeowner used to be a good reason to respect someone — not anymore. I wrote in the post, Brio New World, “
Previous generations had a formula for a “normal,” happy life. You used to save your money until you had a 20% downpayment, then you bought a house, and if you had increases in income, you could move up to a nicer place. Home ownership was a symbol of success. It proved you could save to reach a goal; it proved you were responsible; it made you happy. It was also a ticket to financial security as your home equity would become a savings account you could use to fund your retirement when you downsized to smaller accommodations. These were the rules of old.
The lending industry changed all of that. They eliminated all measures of responsibility including honesty with “liar loans,” integrity with low FICO scores, and accountability with 100% financing. When homes can be purchased by people who lie, cheat and steal, the prestige of home ownership is diminished — no make that eliminated. Home ownership no longer symbolizes sacrifice and success, instead it now is synonymous with greed and gambling in the commodities market. Welcome to our Brave New World.”
It reminds me of fashion fads. When a new fashion comes out, good-looking people buy the fashion, and it becomes popular. 
As long as the fashion is the exclusive purview of good-looking people, the fad will remain popular. Eventually, the not-so-good-looking who want to join the club purchase the fashion, and it goes out of style. When people who do not possess the attributes of the club they are trying to join are given access, the prestige of the club is immediately diminished. As Groucho Marx said, “I don’t want to belong to any club that will accept me as a member.”
Many homeowners are still living with the belief they are superior and they are members of an exclusive club. They turned a blind eye to the not-so-desirable element that was admitted to their exclusive club during the rally. Why would they care when admitting these people made them huge amounts of phantom equity?
.
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However, the fact remains, there are a great many “homeowners” who are not financially responsible, they do not know how to save, and they do not know what it means to sacrifice. These late entrants to the housing club are now defaulting in record numbers. They aspire to the respect homeowners were given in the past; they desperately want to look down on their renting acquaintances with that feeling of moral superiority of generations past; however, they just don’t possess the attributes which made homeowners a group to respect. The presence of these interlopers has made home ownership something to be ashamed of not something to be aspired to.
Flushing these interlopers out of the system is going to be painful. House prices are going to decline to pre-bubble levels when the fundamentals make sense again. It will be as if the bubble never happened. Homeowners who survive will be left with lingering memories of what their houses were temporarily selling for during the bubble. Those who are not qualified to be homeowners will be forced to rent again after the foreclosure. They will end up in the “renting class” all over again.
When this time comes, many “bitter renters” who sat out the rally and subsequent crash with money in the bank will step in to save the day. After the painful purge, the prestige of home ownership will be restored, as only owners will be the financially prudent who can sacrifice and save money — the attributes of respect formerly associated with home ownership. These are the times I look forward to. The next time a homeowner denegrates a “bitter renter,” I hope they realize these are the people who will step up and restore the prestige of home ownership when the time is right.
Ok, IR, I have been a landlord. In normal times.
It was horrible. We tried renting ourselves. We tried using a broker.
The tenants were horrible. They didn’t pay. They took terrible care of the house. The people who took the best care of the house got sick and lost their jobs. We rented to a vet–a professional right? We gave
him back his deposit and then discovered a big hole in the wall hidden by a sofa left behind by the couple who got sick. It was an ok sofa; I think they were trying to appologize.
This was in Brevard County, on the space coast, not in Miami.
Finally I decided to rent with an option to buy. I hoped that the renter would take reasonably good care of the house and then not buy, as I
wanted this rental for our retirement income. It had a very low mtg.
But the buyer bought and we were out. I rather regret this, because tho the house was small and needed a lot of repairs (we had done a lot, but more was needed.), and it went up in price tremendously.
Even with the downturn we could have made an enormous amount of money.
All you guys seem to be very smart people, and I am sure you take good care of your rentals, but you are not typical. The TYPICAL renter doesn’t take good care of the the house, all too often doesn’t pay, and
in general drives the landlord crazy.
I do evictions remember. It isn’t just one data point. Even a good renter can turn bad after years of renting–often because they bring in a feckless girlfriend or boyfriend. One renter we evicted was a packrat, and the landlord had to pay a lot to cart all the trash and debris away. (Yes, yes, homeowners can be afflicted with this mental disease also.)
I always advise that a good renter is more precious than gold. Some of my landlord clients are afraid to raise rents, which is warranted, because they are afraid the tenant will move and they’ll get someone horrible in there.
Some tenants don’t believe that the sheriff will come and move them out if they don’t get out. My most recent landlord was threatened with being beat up by the tenant’s supposed policeman friend, and I advised him to get a restraining order, which he can do by himself here.
The renter thinks that because she is a single mother, we can’t kick her out. Meanwhile my client needs the money to pay his mtg.
You guys and the rest of us are not now in a typical situation. You are not renting not because you couldn’t qualify ever (in times of yore and now), but because houses are overpriced.
I spend virturally no time looking down at tenants, but I do advise prospective landlords to be very careful, and that the whole thing can be and often is, a nightmare.
Most of my clients own just one or 2 single family homes, and didn’t buy them recently. They need the rent to live off of. One has a small apt building. He often gets the people to leave, but calls me in when he can’t.
I have recently advised prospective landlords that now is a good time to be a landlord because the quality of prospective tenants will be much higher for a while, since they’ll include buyers who refuse to overpay, and buyers who can’t get a loan because the lenders have gone from being rediculously lax to rediculously stringent. Or, perhaps, because they are refusing to make loans ’cause they are hoarding cash, because they know there’s lots of potential demands out there by the mtg backed security owners.
This is not intended as hate mail. It’s just my experience.
IR, I’d rent to you any time.
—–
Via AmericaBlog, here’s a good MSNBC story on the wrong kind of houseowners:
‘Nobody expected this to continue’ — it didn’t
Phoenix suburb shows what can happen when gambling on housing boom
http://www.msnbc.msn.com/id/21140704/
Of course IR there are million exceptions to what you wrote. And while what you said is generally right, I think it is worth noting the exceptions.
I know there are people out there who took advantage of some of the aspects of a bad loan industry to get into their first home. I know some of them didn’t take all the pie in the sky promises and rather, used the loosened standards to get the loan and buy a home they could actually afford. I don’t know what percentage of the new homeowners those people are. I suspect it’s small. But that said, what I think this demonstrates is that the “traditional” standards that so frequently lauded were, in their way, flawed, as were the ridiculous non-standards of the last five years.
In responding to Lawyerliz I want to say this. I’ve been a renter most of my life. I wasn’t a renter because I wanted to be but because I just didn’t make enough to qualify for a loan on a home and home prices where I lived were quite high. And while I am sure Ll is sincere and probably right, in the main, about renters, here’s the other side.
Most of the landlords I’ve dealt over the years abused their positions of power over renters. While I constantly hear about how tough a life landlords have, most of them, it seems, lived much better than my friends and I who rented. The vast majority of my renting friends and I did not tear the places we lived. We didn’t not pay our rent and refuse to leave. For the most part, we just lived there.
But when we needed something, it seldom came. Replacing carpet in two places I rented was something that the landlord refused to do even though in once case, the carpet had literally worn through (one place had fifteen year old carpet the other was more than twenty years old). Of course, they told us, they would replace when and if we moved out but not while we lived there. So even though we did nothing wrong, even though we did everything right, little things like that were thrown in our faces.
I been cheated out of three rental deposits in my time renting (out renting maybe a dozen places over the years). Each time the landlord dared me to do something about the getting the deposit back knowing that if I wanted to continue renting, I’d just have to take it and shut up.
And please, don’t talk about renter’s rights. They have none. Whatever the law may be, it’s seriously tilted towards the landlords who have the resources to fight such things.
So I have a hard time hearing how tough it is to be a landlord. For the most part, the landlords I’ve seen treat their properties with less respect than the people living in them and treat their renters with little or no respect.
Back to IR’s point, homeownership means something. This latest bubble in real estate has helped redefine that in much more ambiguous terms which I think is good. The idea that owning a home means you’re a certain kind of person is as ridiculous a generalization as any other stereotype. Maybe you did scrimp and save. Maybe you inherited it. Maybe you cheated and stole your way into it. The idea that owning anything says something about your person, who you are, is a deeply Californian thing (and I say that as a third generation Californian). It’s not a vice exclusive to California mind you but we Californians certainly have taken the act to the mainstream. All of which is to say, that ownership of anything doesn’t mean much, at least to me and I’m as a shallow materialist as there is but maybe I’m just a bit more realistic about my shallow materialism.
Let’s face it lawyerliz! You’re just not suitable to be a landlady. I wouldn’t want you as mine even if you would rent at half price.
In a rent with an option to buy situation, how does one decide on a price?
This quote from the story above captures the “walk away” spirit nicely:
Things looked just as uncertain to Joy and Paul Kessler, until they did the math.
They could fight for their house. But why? It’s worth at least $40,000 less than they paid.
“It’s sad to say but honestly, we don’t feel like there’s anything worth saving in this house,” Joy says.
So the couple decided to let the place go. Everyone said it was the right thing to do.
In contrast, this is what an ‘expert’ advised such houseowners to do, just some days ago at MSNBC:
“First, look for any way to trim expenses so you can make your payments.”…
“Next, look for ways to increase income.”…
“Then look for things to sell to raise money”…
“Although people are usually told not to tap accounts like 401(k)s and IRAs for ordinary expenses, it may be worth it to save your home even if you have to pay tax and early withdrawal penalties.
Many of these steps are painful. But it may be short-term pain until conditions turn around — better than the long-term pain from losing a home and ruining your credit rating and job prospects.”
For heaven’s sake, all of this to ‘save’ a property that’s rapidly losing equity? Does it make any sense to even put the retirement savings into it? Chances are high that the desperate owners will never see that money again. And what’s to be gained, apart from staying in that house instead of saving money by walking away and moving into a rented one? sAving the credit rating? How many years does it take until a foreclosure would be deleted from it? Will the house’s appraisement be back at it’s original value until then? Hardly.
The only good advice in that story comes near the end:
“A final option is “a deed in-lieu of foreclosure” in which you give the property to the lender, who then forgives the debt. This would not be quite as bad for your credit rating as an involuntary foreclosure.”
Indeed. Sounds like a good idea to me: The lender, as a pro, was satisfied with the house being good enough a security for the mortgage, even up to 100% of its value. Well, that was bad professional judgment. So it was even more his fault than that of the buyers. Let him have the security and be happy with it.
Here’s the link to this ‘advice’ story:
http://www.msnbc.msn.com/id/21098586/
Hmm, the last story raised my curiosity about the author, so I checked with google. Well, I think its a safe bet that MSNBC contributor Jeff Brown is the “bawld” guy at this website:
http://www.brownandbrowninc.com/
An investment consultant with 36 years of experience in real estate. Uh huh. Who would have thought?
😀
Dead on Liz. Great comment.
Well, this sale was when prices were rising in a normal fashion, let me see, in about 1999? So we picked what we thought was a fair price added a tiny bit for the year he had to buy, and voila’.
As I recall the price was $50,000. No kidding. We had bought in ’92 for $43,000. We owned another place in Miami, which had
just been remoded superbly, thanks to Prudential Insurance and Hurricane Andrew (thanks Pru!!). It was a teeny tiny house, on a smallish lot–for Merritt Island, maybe 6500 square feet and the house was 900 and some square feet.
Just before closing, he needed an extra thousand dollars for closing costs, so we increased the price a thou, and then gave it back to him. We charged him an extra $100 per month in rent and applied that to a downpayment, which he didn’t have.
I supposed we could have told him tough, and kept the house, but he was a nice kid, and I couldn’t make myself do that.
What you could do now? Gosh, with nothing moving, I don’t know how you’d set a price.
By the way, tho I had a good experience, a contractor client of mine had a very bad experience.
I agree I’m not suitable to be a landlady, but I didn’t do anything
to hurt my tenants.
Why precisely wouldn’t you want to rent to me?
My hub and I worked with the sick lady for a while, but we are not a charitable institution, and eventually they had to go.
How about
RESPONSIBLITY?
It is very tough to be a landlord. Particularly if you have any pride of ownership of the house you’re renting out. Particularly if you really try to be honest with your tenants.
We only lasted one year. Sold the house in 02 well before the market took off, but it was a huge relief. Thank God we didn’t lose any money because the house was a fixer up when we bought it and we fixed it up very nicely with the thought that it should hold up for ten years with no need of significant maintenance.
Wouldn’t you know.. the one thing we hadn’t replaced, the garage door opener, which had been replaced by the previous owner, failed on a friday afternoon. The tenants told me IT HAD to be replaced by saturday…. Huh? Then they wanted it the house fumigated because the saw ants in the kitchen floor? Huh?
Anyhow, they did take care of the house, they were meticulous, but a huge pain in the ass.
As a homeowner, the issue I have with rentals is NOT the renters. We’ve been friends with renters quite a few times… although it’s sad to see them leave after two years…
The issue we have is with the rental OWNERS…. Often times they are the cheapest SOBs around and rental homes tend to be more down and cheaply maintained.
I’ve been on both sides – landlord and renter. And I didn’t like either role. We thought we rented our house to a good tenant only to find our house in bad shape when they left. The security deposit didn’t cover the damage they left behind. When we rented from a homeowner, the landlord promised they would fix holes in sheetrock, replace the carpets, etc. once we moved in. Well, they never got fixed. And they were supposed to take care of the landscaping – which they never did. It was frustrating for us because we were great tenants. That was the main reason we chose to rent from the Irvine Company. In our experience, they have fixed any problem we have had in less than a day. I am very happy with them. We have since chosen to rent a house which we will be moving into shortly. I’m hoping we have a good landlord this time.
Speaking from the “evil owner’s” perspective, I’d like to weigh in my thoughts. We have two houses in our cul-de-sac that are rented, and generally speaking they are a pain in the ass. Yes, everyone looks down on them, but speaking for myself, it is not a function of their ownership status. It related to the fact that they are generally much less desireable neighbors. I have a multitude of examples that I won’t bore you all with.
It truly has nothing to do with the fact that they do not own, rather, it is how they treat A) the property; B) the neighborhood; and C) us neighbors BECAUSE they don’t own.
Ice Weasel’s comments remind me of something which comes as a surprise to so many people. Before you rent, check the recorder’s and court documents on your landlord. For the county where I live, I can check them online.
At the recorder, you can find documents such as a notice of default on the house or condo you might be renting. You can also check to make sure the person who says they are the owner really is the owner.
If I was going to rent a house or condo which said “for sale or lease”, especially in this market, I would check to make sure it was not already in default.
At the courthouse, you can find if they’ve been sued by past renters.
>>”It truly has nothing to do with the fact that they do not own, rather, it is how they treat A) the property; B) the neighborhood; and C) us neighbors BECAUSE they don’t own.”
FamilyGuy, I know what you mean with the above-statement. It drives me crazy when renters do something and they say “not my house.”
We respect the house we are renting as if it were our own. In fact, I can guarantee you the place will be cleaner and in better shape when we finish renting it. The main reason we want to rent a house instead of an apartment complex is to be in a neighborhood where we can meet more people and be part of the neighborhood.
Speaking of who can afford to be a homeowner, check out this story in the LA Times that’s about a family in Santa Ana.
http://www.latimes.com/news/local/orange/la-me-housing8oct08,1,3018393.story?track=rss
Some exerpts:
“he borrowed the entire purchase price of $615,000 from Washington Mutual…”
“The monthly payment, as he says he understood it, would be $3,600 — steep for a glass cutter who made $9 an hour — but Aviles counted on his wife and three of his six daughters, who also worked low-paying jobs, to contribute.”
“he signed loan documents written in English, a language he neither speaks nor reads…”
“The application lists their yearly income as $157,000, when, according to Aviles, it was really closer to $60,000.”
I’ve had a pretty good experience as a renter and I believe the overwhelming majority of people have the same good experience. We only hear stories about the worst because saying “I paid on time and he kept the place livable” is a boring conversation string.
On to the subject of the original posting. I think IR is extremely intelligent and a great writer. But he(she?) shouldn’t point the finger so fast at people that he believes feel “holier than thou”. When not strictly using graphs and stats, all of these posts are shouting about how great he was for renting instead of buying. The superiority complex he’s talking about in “homeowners” is tiny compared to the one he feels entitled to.
If he was writing this blog in 2003 the schadenfruede would almost be warranted. But to start writing in the last year when the downturn was obvious (to anyone not on the NAR payroll) is piling on.
I don’t mean to sound negative. I enjoy the posts overall. But you have to admit that there is a distinct “nyah nyah, nyuh na na” feel to the posts when it’s capped with a “Is this the new reality?, Is this how you thought you’d get rich?” message after every short sale listing.
While I’m ranting, since almost no one in SoCal charges 6% for a listing, why don’t you use 5% to show how much they’ll lose if they get thier asking price? Everything else IR writes is so spot on then he soaks them for an extra $10,000 for reasons unknown.
I was a landlord once, and the renters were fine. Not great at housekeeping (ie. two blue collar single guys), but otherwise great renters – paid on time, fixed little things that broke instead of calling us to fix them, and even were nice enough to let us do open houses while they were living there.
Had to clean up a lot for open house (ie. I don’t think they ever washed the tub – and they had a dog – I scrubbed off a mysterios green ring that to this day I still have no idea what it was), but it was an older place in need of renovation, so no big deal.
They missed the last months rent (I think they were broke), but the security deposit pretty much covered it anyhow.
what stuck out to me?
“Even after what Aviles has been through, Prata said that when he signed the documents to sell his house, she had to remind him to read them first.”
Spoken like a true landlord:
“Even with the downturn we could have made an enormous amount of money.”
Do you think he appreciated what you did for him? If so, don’t feel so sad. Every deal has its risks and downsides-one reason I’m not an owner. For a true horror show, watch -one reason I don’t ever plan on being a landlord.
That’s Pacific Heights-with Michael Keaton as the tenant from HELL:
http://www.imdb.com/title/tt0100318/
(For some reason, the html wasn’t working)
Rather extreme example of undesirable homeowners…
Steal of a deal
http://www.denverpost.com/ci_4567736
We pooled with another couple once to rent a house built by a family of immigrants. Walking though the house, interior looked great. However, the devil is in the details and what was behind the walls…
Moved in, then found out housing inspector was coming out – apparently he’d been out to inspect the plumbing 22 times, this was his 23rd time. And yet again, it failed inspection as nothing had been fixed (ie. I think the landlord was just trying to exhaust him into approving it). Inspector was annoyed enought to just write “Plumming needs to be redone in a professional manner” on the report :). Inspector was going to do the 48 hour eviction on us for house not being up to code, but when we talked to him, he decided to cut us a break and not do it.
Electrical was no better – luckily, we were handy with electrical stuff and jury rigged a fix for the electrical and alarm system.
Stove opening was there, we agreed to get our own stove, only problem was that the inept builders had made the drawers and counter top stick out half an inch too far to accomodate a standard sized stove. Had to get and extra small ancient refurbished stove instead.
Landlord broke our lease early, refused to give us compensation, so we returned the electrical systems and alarm to their initial state when we moved in.
I feel sorry for the people who bought that house. I sure hope they had a good inspector and stuck it to the owner in price reductions for what it’d take to bring the place up to standards.
“We respect the house we are renting as if it were our own. In fact, I can guarantee you the place will be cleaner and in better shape when we finish renting it.”
Yes CalGal, the same is true for us. In fact, we take pride in being good tenants and we get along great with our neighbors and landlady.
We’ve been owners before, too, in west LA. A very nice family with young kids rented a few houses away. They were a asset to our neighborhood. The terrible neighbor that irked everyone was the long-term owner who fed the ferrel cat population, stored junky cars and campers all over the street, and left their property in shambles – year-round Christmas lights and all.
Counterpoint: a few prudent builders
Builders resisted the urge to surge
http://www.heraldtribune.com/article/20071008/BUSINESS/710080335/1007
Distressed properties 12% of O.C. housing supply
http://lansner.freedomblogging.com/2007/10/08/distressed-properties-12-of-oc-housing-supply/
After finding a new way to search for short sales and foreclosures on the market and in escrow, the new findings are disconcerting. Currently, short sales and foreclosures in Orange County account for 12% of the active inventory and 15% of all escrows opened within the prior month.
fencewalker, don’t even get me started on year-round Christmas lights! I just don’t understand people and how they can live sometimes.
I’ll toss in my two cents on this.
I’ve rented for 20 years. I spent most of this time in school, never quite knowing where I was going to be in a few years. When someone finds out that you are renting, you are almost always treated a little differently than if you were a homeowner.
For the curious, I’m a physician.
When I have rented houses, the neighbors almost always ask if we bought the place. When I tell them that I’m just renting, they don’t put much effort into a friendship, figuring that you are just going to be moving soon again. I’ve experienced the same thing in some community groups too.
There is a definite stigma that people associate with renting. It is assumed that you as a renter are somehow financially irresponsible, otherwise you’d just buy your own place. This is generally drilled into one’s understanding from a young age.
I agree with IR’s assertion that homeownership isn’t all it used to say about a person’s success or financial abilities. In the past few years, it turned into a huge GAMBLE for millions of people now facing financial difficulty who wanted to look the part, but were really just renting from the bank for awhile. Their mortgage costs took off without them as their ARMS adjusted with equity evaporating as prices declined. Ooops.
I nearly bought, until I realized how grossly overpriced SoCal had become and the shaky terms that many were using to get into these home purchases.
Renting never looked so good.
Why Vegas? Driving buy all those deserted properties is a real downer before the party.
Limitless fun at the 2007 National Association of Realtors conference in Los Vegas Nov 13-16
http://www.realtor.org/convention.nsf/
Great post Liz! Tenants tend to vary greatly by location. That’s true in Cali too. You’ll have a very different landlord experience in Irvine with an SFR that you will in a small bungalow near main street in HB. Ditto Anaheim versus the Newport Pin.
It’ll be interesting to see how bitter ex-owners adapt to being back in rentals. I suspect they will be horribly demanding, calling and whining about every little thing.
Well, at least they’ll be free of that pesky accontabiliity as
“What happens in Vegas, stays in Vegas”
You know what would be the dumbest but funniest thing? If somone organized some poker players to go to town that week to play Robin Hood and make some money back to return to a few distressed Los Vegas homeowners. That’d be the funniest You Tube video…
I had been a landlord for about 7 years. The best thing I did was to find a good property manager and let her take care everything. I just sit back and collect (or write) the checks. Some landlords will penny-pinch their tenants, which is really stupid considering the tenants are living in your property valued at hundreds of thousands of dollars. No point in pissing them off over a few hundred bucks.
Speaking of ex-owner renters, here’s an excerpt from the comments on http://thehousingbubbleblog.com/?p=3534
Comment by mrktMaven FL
2007-10-07 14:23:16
Dear HBB posters and lurkers,
After learning his FB tenant was breaking the lease 6 months early without notice, my specuvestor buddy drove up to the rental some 2 hours away hoping to do some light vacuuming in preparation for future tenant viewings.
He was horrified to see 4 ft grass in a trash filled yard, holes in the wall, trash filled rooms, a broken mirror, a filthy kitchen, filthy bathrooms, peeling paint, soiled carpets, disconnected plumbing as a result of unpaid water, and a notice on the door for unpaid electrical bills.
Needless to say, my buddy is currently under heavy sedation. The doctor said he’ll be fine.
After rolling on the floor laughing my arse off for the last 2 hours and uncorking a bottle of bubbly, I decided to post the news.
Cheers,
Maven
Reply to this comment
Comment by Clair Voyant
2007-10-07 16:31:29
Is he a good friend? You must mean, “acquaintance”. Though I laughed, I don’t know the guy. Thank you for sharing.
Reply to this comment
Comment by riding the wave
2007-10-07 17:19:58
lol,he must have rented it out to a crack head.
Reply to this comment
Comment by mrktMaven FL
2007-10-07 18:01:14
Worse than a crackhead, he rented to a recently foreclosed FB.
Reply to this comment
Comment by auger-inn
2007-10-07 18:44:50
I guess the FB was “sharing the love” with your buddy! LOL. Great story!
(Comments wont nest below this level)
I have to go along with you on this. My parents owned a house and a grocery store. They rented two apartments connected to the house and three connected to the grocery store. Most tenants were nightmares. When they found a good one they wouldn’t even *think* about raising their rent for years at a time. They even gave them free groceries at Christmas as a perk for staying with them.
I’ve inherited the house. I grew up in that house and didn’t want to sell it, but it’s in Maryland and I live in Southern California. It’s the house I grew up in and the last link I have to Maryland (other than stubbornly being an Orioles fan even tho they’ve stunk for 20 years).
I lucked out. My cousin’s church’s Director of Christian Education was desperate. He couldn’t even afford an efficiency apartment in a small apartment complex that he could afford. I rented the entire upstairs (about 2000 sq ft) of the house to him on the condition that he find a good tenant for the downstairs and he take care of everything. A few weeks later, his son and family moved in downstairs. They send me money every two months (enough to cover the taxes and insurance) and Tom handles everything. They’ve very appreciative of having a nice place to live they can afford, and it doesn’t cost me anything to keep my childhood home a little longer. I even spent about $10,000 on some repairs my parents had neglected in their final years.
So it worked out for me, but if I thought I’d have to go through what my parents did to find good tenants, I’d have had to sell as soon as I inherited the house.
I’m renting in SoCal (moved to the “Inland Empire” in June from Texas), and it was this blog that saved me from making the horrible mistake of buying something. As the agent told me, “it was a great time to buy.”
Terry
When stuff in our rental broke, we fixed it.
We painted it before we rented it and only rented it for a total
of 2-3 years.
What else were we supposed to do?
But yes, the law is definitively on the landlord’s side. If you are diligent you can get a defaulting tenant out in about 6 weeks, if you are lucky and the Writ of Possession doesn’t sit on the judge’s desk for weeks, or it doesn’t get lost between the Clerk’s and the sheriff’s office accross the street (happened to me once, the client thought I had done something wrong.)
Still I would say, in Florida, people are prejudiced against people who live in trailers, not renters. (AKA hurricane/tornado bait) That’s because we all think that buying a trailer is an incredibly stupid thing to do in Florida. I think most would agree it’s much smarter to rent a CBS structure than buy a trailer. (Concrete Block Stucco)
Where I live the majority of property managers are realtors, so let me tell you what recently happened to me and my husband. We were lucky enough to sell our home and make a tidy profit, we then decided to rent for year or two, so we contacted a couple of the local propery managers who basically told us “well you just made a lot of money, you NEED to buy another house.” We of course did not want to buy another house in this market, so we filled out a rental application and were told that the house had been rented (when in fact they sit empty today), this happend to us twice before we got the clue … they were not going to rent to us because we just made a boat load of money off the house we sold. Happy to say, we found a house for rent by an out-of-state couple.
Gosh, and I thought Miami was the epicenter of this sort of stuff.
Justarenter, same here.
what I have notice lately is a little bit different.
Its seems when people ask if I bought (just moved to a house a few weeks ago) I get a look of ” you lucky son of a B####. 😀
Better yet a Colbert “Citizens on Patrol” submission…
I don’t mean to generalize because there are many people out there like yourself.
You will probably reap many benefits from renting now and postponing a purchase, so good luck to you!
That is so funny that you mention the year-round-christmas-lights! We actually had renters on our street that did this, and honestly, it was one of the least offensive aspects of them living there.
The worst was a toss-up between the visits from the police at 4 AM or the 7 of 8 weeks in a row they held a garage sale. It seriously gave me a new appreciation for HOA’s.
In the mid 1990s, I was renting a house that looked a bit old. The owner maintained it, but it was outdated. With his permission, we put in wainscoating over an area where the plaster looked bad from a pipe that had leaked years ago. We replaced the showerhead and faucets. I put down some new tile in the bathroom. We repainted. We figured out that two of the sliding glass doors should open from left to right instead of right to left, and reversed them. The flow and furniture arrangements were much better.
It looked nice. He was one of our favorite landlords. He thought we were great tenants.
Then, he put the house up for sale. We didn’t worry, because it was a terrible housing market and he was asking above market. He accepted an offer more than 20% below his asking price. That was the one thing that I wish he had done differently. I would have bought the house for that lowball price. Since I had said “no” to the list price, he didn’t think to ask again.
You bring up an interesting point about neighbors not wanting to put much effort into developing friendships with renters. While it is unfortunate, I don’t think it’s something to point to as being shameful. It seems perfectly reasonable to me that somebody may not want to become to invested in a relationship that may not last. No?
I would agree with you on this one. Although there are some long-term renters who do become part of the community.
I believe that the garage sales fall under Irvine City rules. That is, you can’t hold garage sales every week and you can only hold so many per year.
Next time, call the IPD.
We’ve had some good friends that were renters. Our kids grew up together. One pair eventually moved back East, another pair wanted to stay longer but their land lord moved back from HK and did not renew their lease.
They moved to Concordia and then I lost track of them.
Sure, homeowners move too, but often the expectations are that homeowners will be in for the long ride ( our kids have grown with their buddies for eons ) while renters stay for shorter “visits”.
More detailed, more educational than usual news article
Lost your home? You may owe IRS
Even if you received no money from a foreclosure sale, you may have to pay capital-gains taxes on the phantom income. And that’s not all.
http://realestate.msn.com/selling/Article_bankrate.aspx?cp-documentid=5427263
I’ve been to Jaco… Pura Vida Mae!
While we are on the subject of the frailties of human nature, can we share a brief moment of disgust at those neighbors with nothing better to do all day than complain to the HOA and IPD? Get a backbone and say something before you go off whining about it. That behavior was immature in grade school.
Question:
If a percentage of marginal home owners will be returned to the renting ranks over the next year or two, doesn’t that restore some cache to owners? Those owners left standing in ’09 and ’10 will certainly have accomplished something in terms of frugality, planning, financial management, etc.
And if the renters’ numbers swell with the newly foreclosed, doesn’t that bring some further stigma to renters as a group?
ice weasel,
Sorry to hear about your deposits. In my opinion, you should have considered small claims court. I am not a lawyer, but the onus should be on the LL to prove why he is entitled to the money. If you win anything back at all, the LL should be liable for court costs, though I am not sure how it works if you only have a partial win – I have always won the complete amount I have sued for in small claims, including the costs. I think it is up to the judge to decide that amount as well. Of course, I don’t know how this would affect future rental situations, but when applying somewhere else, I would think a credit report carries great weight. I would also consider submitting a copy of any judgment so as to counteract any bad reference the previous LL might provide. But what do I know? I really have not had any adverse situation occur as yet… but I hear there is always a first time 🙁
I have gotten deposits bank from evil landlords, with
vicious letters. Never had to sue to get them back, but
I urge anyone in this position to sue in small claims court.
After all, the ll has a good asset to go against–the house.
Oops, I keep forgetting, maybe the house. Gosh, it’s like
referring to someone who died as if he were still alive.
The dead housing mkt. Maybe it’ll resurrect.
Ugh we had the same issue with the X-mas lights with the house across the way that happened to be a rental. It was college kids and thank god they moved out. Now we have a nice family living there. Hopefully they stick around for awhile because the rent is sure cheap enough.
Nationally the percentage of households owning their home increased 5% from about 65% to about 70%. My guess is that these 5% will go back to renting.
Interesting question about the rental stigma in 2010. It probably will increase the stigma as many of these people will also be foreclosed former homeowners. The surviving homeowners will certainly be battle tested.
San Diego Sep. Sale is out:
Time Frame 2006 2007 diff
August 1,781 1,467 -18%
Sep 1-9 351 188 -46%
Sep 10-16 323 219 -32%
Sep 17-23 356 210 -41%
Sep 24-30 450 265 -42%
Sep total 1,480 882 -41%
http://www.bubbleinfo.com/ journa…d.html#comments
how about Oct:
Time Frame 2006 2007 diff
Oct 1-7 312 150 -52%
Battle Tested? I guess I better get the kids helping out with the moat out front. I don’t think the HOA and the City will let my put mines out there, but perhaps a two story tower like those in Stalag 13, facing outwards, will help me out.
No pit bulls, but maybe I can find my a hungry gator for the moat and some concertina wire on the back yard fence.
Battle Tested?. hmmm… I think I need some anti tank fortifications by the front and garage doors.
Jah Vohl Kolonel Klink!
“Jawohl” is one word…
Fannie Mae: Jumbo Market “Remains in Distress”
http://calculatedrisk.blogspot.com/2007/10/fannie-mae-jumbo-market-remains-in.html
Signs of Mortgage Market Stabilization?
http://www.fanniemae.com/media/berson/weekly/index.jhtml?p=Media&s=Economics+%26+Mortgage+Market+Analysis&t=Berson's+Weekly+Commentary
Builders open most O.C. projects in six years
http://lansner.freedomblogging.com/2007/10/08/builders-open-most-oc-projects-in-six-years/
Housing consultant John Burns of Irvine blamed the increase on slow home sales. “The anomaly is sales are so slow that few projects are closing out,” Burns said. Meanwhile, developers continue to pursue projects long in the works and are forced to put their homes on the market even though prices are down to pay off land-purchase loans.
I think all participants and spectators forget that real estate is a live active market. For our client’s looking to buy they cheer every price reduction for the sellers they weep at the “lost” money. “Equity” is magic money to until you convert it to cash through a sale or refinance. I posted a piece on the jumbo market you might want to read it.
Cheers.
http://thegreatloan.blogspot.com
This is like the Miami-high rise condo problem. There should be a
way to mothball these projects until supply is used up–in some years. Otherwise everybody is going to lose worse than they would have otherwise.
The problem is that any prospective messenger knows they are going to be blamed, not thanked. No bank officer ever wants to admit they made a mistake. Almost none up to now are authorized to take a loss in order to avoid a bigger loss. Actually they really still aren’t. Most lost mitigation depts are a sham. Why don’t the developers just default on the land purchase loans. The consequences will no doubt be harsh, but doing anything else is probably worse.
Even tho the disaster is obvious to anybody who looks at them, the developers continue to work on unsaleable high rise condos here, and the banks continue to fund the construction. Any bank officer out there who can suggest what the least bad thing to do is?
Didn’t Greenspan say the more quickly housing corrects, the less damage it will do to the rest of the economy? In which case, what’s actually happening is good – the price correct can happen faster, we can get in a buy faster, and then there is less wasted time and space (ie. less empty homes with no one in them, and when prices are reasonable, the construction guys can build and re-employ people currently out of work).
The deals I have witnessed where there is financial distress, the developer generally defaults and tries to force a “cram down” of loan terms with the bank.
The banks are really the ones in a tough spot. If they foreclose, the property is not worth the balance of the loan, and then they have to bring someone in to finish the project (which is always more expensive.) If they don’t foreclose, the developer will simply stop making payments and go into default, but since the bank won’t foreclose, who cares? If the project is not finished, the bank will need to continue funding through completion because a partially finished building has a small fraction of the value compared to a finished one. Until the project is finished, the bank has nothing to bargain with.
At completion, the banks and the developer can look at valuations and negotiate over who takes the losses. Banks generally lose out in these negotiations. They don’t want the property, they just want their money back. This often facilitates a “cram down” where the bank gets what they can and the developer makes enough profit to cover overhead and finish off the project.
Huh? Why do you think I would be one of those? Why do you think that talking to bad neighbors will fix everything.
Good neighbors are the ones that you can talk to and they will see to it that it doesn’t happen again. Usually they weren’t even aware.
Bad neighbors are the ones that don’t care.
Now then, as a rule of thumb I got out and tell them… however, this is not necessarily the best option all the time. Some times, you can not get through to some people at all and stronger measures are called for.
If you had bad neighbors that had barking dogs, constant loud parties, frequent garage sales, and you already had talked to them about it and they ignore you, what could you do?
So. This is not grade school. Because if it were, at some point you’d get a baseball bat and have it out. However, since we’re in a somewhat civilized state, at this point you have to call the cops.
The HOA is not a help on these things. Unless you live in a condo where they control the outside spaces.
Is this why they’re still building that tower on Jamboree?
I believe the original example was calling the cops on a neighbor for having too many garage sales.
But never mind. I think you have given me an excellent idea of what constitutes a “bad neighbor.”
In the story, Greg Giniel is trying to buy back his foreclosed house back at the foreclosure auction. Is this allowed, or possible? Does Giniel have to buy outright with cash?