WatchAs I've posted before, I welcome the sane messages that Patrick conveys, and in theory, it's better to rent than buy, even in this market, in my chosen city of Walnut Creek.
Except:
- try finding a nice 4BR house that isn't a hovel
- try finding one that allows pets
- try finding one as above for under $3000/mo
- try finding one with a stable landlord
After a nightmare situation where we had to leave our last rental because the owner was overleveraged on her multiple properties and lost them all, we moved to our current month to month rental (at $2850/mo for a 3BR), keeping it flexible because I do want to buy given all the above issues.
Doing research on foreclosure properties, came across the landlord's name on 3 houses headed to foreclosure, but not our rental.
Fast forward a few months, bingo, "our" house is on the block as well. Nice.
What to do next? My choices include:
- buy an overpriced house which I can afford, but not if I lose my job
- buy an REO that needs work, still overpriced in most cases
- find another rental and be locked in for a year
- keep hoping for that one reasonably priced listing that offers everything we want in a house, and hope a bunch of idiots don't throw in bids over asking just to make sure they get it
I'm tired of this stuff. When do responsible people like me get a break?
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Walnut Creek, CA
Bumping this because of the posting problem that Patrick mentioned.
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47 male
Lafayette, CA
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Renting can often be a nightmare scenario. Try moving three times in three years like I did in the late 1990s because landlords wanted to sell into a rising market. (every one of them said they were long term holders) I can't even imagine the current market where tenants are forced to pay rent to landlords in foreclosure.
I finally decided to take out an 8% mortgage (rates back then) and pay the extra money to own. The peace of mind was worth every last penny "wasted", even if the market had remained flat for 20 years.
I actually had another version of this decision occur early this year. I was paying $1000 a month rent for office space, but decided to move down the street to a building I could call my own. Our new monthly expense is around $2700 a month (yes it's larger) and it's worth every penny.
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I, too, feel your frustration over landlords renting out houses they can't afford to keep. This is why I would never sign a month-to-month lease on a rental in a city that doesn't have a just-cause eviction ordinance like Oakland and Berkeley (as an aside, I'm not advocating these. I think they're bad policy). If you had a year lease, the bank would be powerless to kick you out even after foreclosure.
I can't tell you what to do, but two things I would keep in mind:
1. You do not want to put yourself in a situation where you need to buy within a certain timeframe to avoid becoming homeless. This is a recipe for settling on a house you don't want, or a bad price - first rule of negotiation, always be willing to walk away.
2. If you do sign a year lease and then buy a place, the landlord has very limited legal recourse. They must actively try to re-rent the place, and can only come after you for lost income until it's rerented. Unless your rent is above market, they should be able to rerent it quickly, limiting your liability to a couple K at most, and possibly 0.
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Murrieta, CA
Play lets make a deal mr/ms landlord. or good luck getting another penny from your rental.
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Oakland, CA
that's all part of the flexibility
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San Carlos, CA
I think a big part of your problem is the 4BR requirement. I actually prefer 2 large BR to 3 (or 4!?) tiny ones. I suppose my lifestyle is different from yours, however. No kids. Still , do you really need 4 BR?
Pets is another issue, but I have found that many landlords do not specify, and will consider 1 - 2 small pets. Having a pack of large dogs is another thing. If you search Craig's for those that specify pets are ok you have fewer choices, but there are many that do not specify and will consider. I find once they meet me, they are more than happy to accept my single, mature, well behaved cat. But yes it is a pain in the neck and limits your choices.
I think there are some pretty stable landlords here on Patrick ...
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Valencia, CA
Yep, it can be a nightmare. I too have had to throw around the idea of buying for the added security. Sold my house and became a renter in summer of '06. Nightmare ensued. Had to move multiple times due to over-leveraged landlords, however I finally decided to sacrifice the ideal 4 bedroom situation with a small 3 bedroom after extensive investigative work on my current landlords. I not only checked public records, but asked for a written statement from the landlords as to their future plans for the house (this of course has no legal weight, but at least gave me the opportunity to look for red flags) I also interviewed numerous neighbors that knew the owners as well as the tenant history. Everything pointed to a stable rental, and so far, after 2 years everything has been acceptable (including a small discount in rent for signing a second 1 year lease). I really want to move to a bigger house, but unless I can be reasonably sure of a similarly stable rental, I will stay put for now.
Iwog, buy a 2,000 sq ft. 4 bedroom in 91355, and I will gladly rent from you. Thanks!
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47 male
Lafayette, CA
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Jeremy says
Sounds like a great offer but I'm only buying homes I can drive to in less than 30 minutes. Cuts down on expenses. Good luck with your search!
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Pacifica, CA
I'm facing a similar situation right now. Frankly I'd rather buy and risk losing my job and not be able to afford the home, than to keep renting.
I've been renting since I turned 18(10 years ago now), and its been one nightmare after another. I do like Patricks ideas on rent/versus buy, but it is a very emotional decision as well, and I'm willing to pay more if it means I don't have to worry about my landlord or their financial situation. If something goes wrong its on me, and no one else.
Its a good time to buy, people are saying house prices will go down another 8-10% in 2011. On 500K thats 50K, if you buy and lose 10% equity so what? You're in a stable place thats all yours.
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47 male
Lafayette, CA
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Remington says
It's an excellent time to buy and I think a 10% decline in 2011 is a very small risk. A much greater risk is paying 6% on a mortgage next year instead of the current 4.5%.
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Pasadena, CA
Remington says
People might be saying prices will go down, but no one knows for sure. Housing is very local from block to block and neighborhood to neighborhood. prices may go up, down or sideways and you can't pick the top or bottom of the housing market any better than you can time the stock market.......make the financial decision that you can afford and don't get in over your head using the formulas you've undoubtedly read about here on Patrick.net; 25-30% payment based on income, fixed rate loan, etc.
Enjoy your home without second guessing your decision after you buy it. It's a very scary as well as an exciting time when you buy your first home. Only you know what is right for your particular situation, but I agree with you on the stability, etc. Good luck with your decision :-)
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Murrieta, CA
If I give a homeowner $300,000 cash for a house no one would argue that I am a buyer and own the house.
and now i have security. and some even say an asset. I guess I'll sleep better at night or something.
If I'm loaned the $300,000 some here still refer to me as a buyer, and an owner. and now I have security too.
that's so cool. and Oh an asset!,... yeah i'm so safe. and the wife is happy (which makes me happy too i guess.)
I love America!
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Walnut Creek, CA
I agree that prices will decline a bit further, but that's not stopping me from buying. Rather, it's lack of inventory.
Yes, I really need 4BR (I have 3 kids) and you'd be surprised how many people don't want dogs (we're talking a 5 year old Lab, not a pit bull).
I chose a month to month lease because I fully intended to buy something, but we haven't found anything suitable (we made one offer, got outbid then it closed for below our asking price).
My post was mainly venting, but I think the predicament of the renter often gets lost in these housing discussions.