the tyranny of rent

[ZoNiE]

If people didn't want everything to be cheap Walmart throwaway products, and our income was more allocated to durable, durable goods, then there would be less for real estate and as such the prices would not have gone up so much, so fast. Part of this is also the interest rates. The banks raped us with double digit interest mortgages for so long, that real estate values stayed low. At the end of the day, your income will always go to something. Only the ratios have changed...

 

[gizmotron]

I have to respond to this: @ Bullfrog: Todays big investors are conspiring to control the housing markets by buying up all the available single family housing to force everyone in those areas to rent in the USA especially the southwest. Take a look at Arizona's housing markets and see who is buying thousands of houses before they are even built in some cases."

No. Sorry but look deeper. " Todays big investors." I don't think so. These are actually suckers with money. They are colluding to stand in line and get disappointed. They are being used by speculators making money off of a sales pitch. Just how do they get revenue from renters that can't find homes that are now off the market? There is no consortium of rental assets that feeds suckers like a spider account in focused stock trades. Rent prices go up all by themselves when there is a housing shortage, past tense. This is just selling shovels and picks after the big gold rush boom.

These investors with money might be buying investment as a team membership thing. But they are buying a lie. It's good to see everyone getting suckered in all this "irrational exuberance." Just think. the land underneath your van was once owned by an Indian that took it from another Indian that thought it was his. And now you have the right to let a pail faced bureaucrat take a slice of your pie just so that you can feel normal.

 

[jimindenver]

You think it sucks to work all day and come home to chores? You should have tried my life. I owed a residential property management service. All day I cleaned, shopped, did maintenance, yard work, pools, cars, bills...everything it took to take care of a home. Every night I came home and had to do all of the things that I had already done all day.

i own a travel trailer. I still have to clean it, do dishes, do laundry, go shopping, etc. While I'll never have to mow grass again, trim the bushes or plant flowers, I do get the joy of emptying waste tanks and providing my own water and electricity. Occasionally a full hook up RV park is such a nice break from it all. Then again that's rent.

Because of my work I see a lot of newbies out here. I can tell you that the two groups that make it are those that simply can't afford to do anything else and have no choice but to deal with the hardships or those like me that no matter what are going to be out here one way or another.

The group that is most likely to tuck their tail and go home are those that have a choice. They are not out here because of a burning desire to live this way, they are out here to SAVE MONEY. They buy into the YouTube about how wonderful, easy and CHEAP it is to live like this. They don't notice that those running the commercials for this lifestyle never seem to mention how much it really cost or how much it can suck.

Lets start with the vehicles. Don't own a van or RV? They are not cheap if you want something newer and dependable. A older piece of crap is cheap in the beginning but keeping it on the road isn't cheap. The trade off is newer and nicer cost more, the taxes and plates are more, the insurance is more but at least you are not stressed all the time that the tranny is going to go out and cost you thousands of dollars.

So you have your van. Toss a sleeping bad, a camp stove and a cooler in it and come on out and live cheaply. It won't be very long before you want some comfort. Building out a van cost money in materials and labor if you do not know how or don't own the tools. Don't want to spent a buttload on ice every week? Wait until you see how much a brand name 12 volt fridge cost.

Power to run that fridge and all of the other things we like cost money. Solar, batteries, generators all cost money especially if you are a brand baby or can't install it yourself. One thing you will find out is not only does gas and propane cost money, it cost money to simply go get more.

Want some entertainment and stay connected? Internet cost money. Yes you can use public WiFi at the library or McDonald's but again, driving to go there cost money.

You want to talk expensive? Wait until you see what it cost to buy food, gas and propane at the only shop in the only little town near where you are camping. It's called a convenience tax because you can always waste a day and a lot of gas driving to and back from the next town where stuff is cheaper.

More than once I have heard a new person say that they came out here to save money but all they have done is spend it. They spend so much that they realize that it will take years of not paying rent to recoup what they spent in setting up a decent van or RV.

So if you are really only coming out here to save money, you might take the time to find out what it really cost and what you are going to be sacrificing to do it comfortably.

Money aside the question I always ask is have you been camping? Did you like it? Was it overnight? A weekend? A few weeks? The reason I ask is because no matter how nicely you set yourself up you are still camping and if you do not like camping, you are going to hate this.

 

[gizmotron]

You think it sucks to work all day and come home to chores? You should have tried my life. 

I had to stop with just that and love it. I'll read the rest in a moment. That was a great beginning.

... I can't keep reading. It's too funny.

Excellent post, not just funny but so true to life.

 

[bullfrog]

Amen jimindenver. It takes a person that truly wants to live this way to be happy living this way. There are lots of people that don't know what they need, want or can afford trying to find happiness. There are lots of ways to live cheaply that don't involve living in a van, hopefully this site will help those that need direction on at least trying to live simply and cheaply without owning a sticks and bricks and finding out more about themselves in the process.

 

[jimindenver]

Thank you

i just think that we do a disservice by not preparing people for the reality out here by focusing only on the money not spent in rent and not discussing the true cost and sacrifices. The closer you get to living a normal life the more it cost.

A example is water. Want even a semblance of normalcy and you had better buy the giant RV with huge tanks, otherwise you will spend all of your time running back and forth between the water source or the RV dump.

This is what I go through to take a shower in my travel trailer with a 30 gallon fresh water tank and 30 gallons in reserve.

Hmmm, I'm beginning to stink. I should take a shower.

Can I take a shower?

How much water do I have? It isn't just do I have enough for the shower but also do other things like drink, wash dishes, flush the toilet and clean until I plan on getting more water. Believe me when I say that thirsty outranks stinky every time.

Okay, I have enough water. What about the grey tank? Do I have enough room for everything until I plan on dumping? There's nothing quite like finding out that you are standing in nasty water because there was no room. Might want to wash the tootsies off separately after that.

Fine, I have water and waste tank. Now lets heat the water. I can use solar but is it a sunny day? Are the batteries full? Will there be enough time to get the job done before the sun drops too far?

Solar no good or I don't have a few hours for it to work, okay I use propane then. How long ago was it that I filled those tanks? The propane water heater sucks more gas in one burn than it takes to run my fridge all week. Running out not only means you have go get more but you might as well get more food too because you are going to want to chuck everything in the fridge.

So I got my ducks in a row, the stars line up and Pluto is in Sagittarius's........ Oh goodie. Now I get to take a NAVY SHOWER. Get wet, shut off water, soap up and rinse. Repeat if I am really lucky.

Even though it is nothing like turning on the water and jumping in for a endless hot shower I really am the lucky one. Imagine being outside on a cool, windy day, nude in a tiny shower tent with a solar shower bag. That doesn't get tedious at all.

 

[gizmotron]

Amen jimindenver. It takes a person that truly wants to live this way to be happy living this way. 

Well said. That point is so important.  What's that line by Sheryl Crow? "If it makes you happy then why the hell are you so sad?"

 

[Calaverasgrande]

I have a couple theories on this whole ball of wax.
When I was younger, it was not hard to make rent on an entry level part time job.
Maybe you had to live in a edgy neighborhood, or put up with less than ideal property, but it was certainly possible.
I had a series of places that were between $300-750 a month. Working 20-30 hours a week at $7 an hour or so, easily achievable.
Knew more than one band who all moved in to a house together which they rented for $1200-1500. Stupid easy to make rent between 4 or 5 people.
Then housing speculation really became a thing. Sure there were always flippers. Heck my mom was doing that back in the 70s. We would move in to a house. Renovate it ourselves and sell it at a profit a few years later. But that was 4 or 5 houses over 16 years.
That was an individual doing one house at a time.
Now there are lots of foreign and domestic investors buying up property, doing no improvements, and just counting on the market to go up.
In some cases they keep the property off the rental market because they do not want to pay to bring it up to code.
There are also all these people trying to copy the TV shows like Property Brothers and Fixer Upper.
This of course negatively affects the rental market.

In my opinion the turning point was the AirBnB thing.
I personally know a few people who have rental units they prefer to keep off market and AirBnB.
This is not just anecdotal. There have been a few cities that put laws on the books to make it illegal to remove a unit from the market for this purpose.
It's obvious that renting out a unit as a hotel is more profitable than dealing with renters.
From the landlords perspective, even if the money is the same. They dont have to deal with long term tenants who demand things to be fixed while causing wear and tear on the place. They can go in after every AirBnB rental and maintain the place at their convenience.

I used to think AirBnB was great. Now I think it's a menace.

 

[gizmotron]

Interesting, the AirBNB's. So they are cutting into government revenues too I suspect. Motels and hotels pay taxes for every night they occupy a room. Correct that. The person staying pays the local tax. I wonder if the AirBNB's collect these taxes. I know that a lot of RV parks avoid paying these taxes by demanding that people stay away for a required period of days or months.

But the nomads are not paying into any taxes for local stays. How dare they.

went and got the answer : "Currently, Airbnb is collecting and remitting taxes on behalf of the host in the following locations. Click through the following links to find out more about which taxes specifically Airbnb is collecting in each jurisdiction.[font=Circular, -apple-system, BlinkMacSystemFont, Roboto,]"[/font]

 

[crofter]

....Fine, I have water and waste tank. Now lets heat the water...

Dwelling has taught me to appreciate the resource conservation value of a cold shower. Though I will heat water in the winter to avoid hypothermia.

Daily showers were essential for health when camp hosting, because the forest service bathroom chemicals are toxic. I tried everything to keep that stuff off me but always would get a splash big enough to make a person feel ill.

Or it would leak thru a small hole in my rubber boots.
-crofter

 

[user 30781]

I used to think AirBnB was great. Now I think it's a menace.

I was chatting with someone about housing on the Olympic Peninsula in WA and they said it was really hard to find a place over there because people were buying them up to turn into AirBnBs.

 

[maki2]

The housing market on the Olympic peninsula has been tight for the last decade. It is related to the economy, including the increased difficulty to get loans. But more recently the huge jump in the cost and increased scarcity of building materials which makes new home construction extreremly difficult to do in a timely manner as well as the issue of unexpected cost overuns on funding due to the sudden cost increases and delays during the construction phases. Of course right now the summer weather is almost over and real estate listings traditionally always fall off after school starts as families do not like to put their kids through mid year transfers.

 

[tx2sturgis]

Think about all those lead acid or lithium batteries we 'rent'. Yeah, you THINK you have bought them, but really, you're just paying up front for a few years of use. Then you pay for another set, and use that for a few more years.

This forum is provided to us on rented server space. You are 'renting' the cellular towers that you pay to use for voice and data.

You can think of tires as 'rented'...you pay up front for a few years of use. Same deal.

So...we all rent LOTS of stuff. Even life itself. Keep making the 'payments' and you get to stay here for awhile.

Of course I'm being a bit tongue-in-cheek...to make a point. Even land ownership is 'rent' because we still have to pay property taxes on that!

It's not really tyrannical, its just life as we know it.

 

[Calaverasgrande]

Interesting, the AirBNB's. So they are cutting into government revenues too I suspect. Motels and hotels pay taxes for every night they occupy a room. Correct that. The person staying pays the local tax. I wonder if the AirBNB's collect these taxes. I know that a lot of RV parks avoid paying these taxes by demanding that people stay away for a required period of days or months.

But the nomads are not paying into any taxes for local stays. How dare they.

went and got the answer : "Currently, Airbnb is collecting and remitting taxes on behalf of the host in the following locations. Click through the following links to find out more about which taxes specifically Airbnb is collecting in each jurisdiction.[font=Circular, -apple-system, BlinkMacSystemFont, Roboto,]"[/font]

AirBnB fought that tooth and nail. In places like NY and SF they have pretty big hotel taxes for a number of historical reasons. It's a 3rd of the room cost in some cases. They are collecting taxes now, same as Amazon etc. But not long ago nobody was paying sales tax at all on internet stuff. So maybe it's just sales tax like everyone else collects.
I'd love to know if AirBnB is actually paying the hotel taxes they are supposed to. Or do they put that burden on the property owner?
I know in a few places in California they bent over backwards for AirBnB (and a few other web companies) because they love techboom money and dont want to be seen as too restrictive to startup culture.

As far as landlords and rent in general, I've had a few great landlords over the years.
Honest people that just want to protect their property investment.
But most of them have been downright sociopathic.
I agree with the idea that paying rent is throwing money away. You are better off buying property. Even just land.
For some of us a big van is the equivalent of buying property. Except it will depreciate instead of appreciating. But then the registration fees are a lot less than property tax.

 

[NctryBen]

I think you’ve got a lot of things going on here. Lower income housing is out there... but you can’t expect it to be optimal accommodations and the supply in areas to the need are low. Houses that are rented out are typically more of an investment vs income. The owner likely has a mortgage, property taxes, repairs, insurance and very little is income per say. The hopes are down the line it can be sold as a profit after paying down the debt or paying it off. And like the stock market you hope it’s value increases. But like mentioned, with our dollar being devalued that part now is likely to take a hit. As far as lower income housing, we can only build it so fast. And there are just so many carpenters, materials, etc... Builders like anyone have to make a living. Places like California where your higher income jobs have been because of things like climate and most professionals push to live, so companies that have the higher paying jobs have typically gone have driven up the cost of living in those areas in the type of housing there are. But a number of those businesses are pulling out because politics are demonizing them because they make money and the need for revenue in the form of taxes. And the same politics are bringing in foreign companies giving them sainthood because they are coming in “creating jobs” even if the wages are eh, and giving them tax breaks for a time until they are deemed demons and they move on to other areas where they can operate more efficiently where both laws and taxes are... well, less taxing. We all work to make money. Everyone is out there to do the best we can. Companies private or public are no exception. And when we make laws that drive companies either out of our state or worse out of our country, well... that upsets the whole economy thing and upsets the whole housing thing as now we have companies paying less in a housing market that was set up for an income level that was more. So the balance is being tipped. And someone has to pay the consequences. And in the meantime, the people that bought housing as an investment is being demonized because they are charging rent that basically pays the mortgage, taxes and expenses but the market shifted and the market of people needing to rent cannot afford, but needing housing rents it anyways. And in the process, everyone is demonized except the ones that are making the policies that is creating the problems in the first place. This is just common knowledge and sense... and a combination of laws created, businesses making business decisions because of these laws, and the market. So basically, it’s what happens when government trumps (and I’m not talking about Trump, haha) good business practices or practical business practices because of lobbied money in political pockets on both sides of the aisle. And that’s where our housing is in a nutshell! Is living in a vehicle the answer? At least short term it seems to be. I think it’s an innovative way to maybe force the scales to be tipped. Even if it means maybe several adjoining landlords to get together and instead of losing on their properties to maybe tear down their existing single residence homes and together build housing more adapted to the income level... mostly spreading out the taxes and expenses amongst multi tenants vs a few. Nomadic lifestyle I believe can be a very viable trend. I believe if the right accommodations are made it could not only be a viable lifestyle, but a rewarding and sought after and respected lifestyle even after the scales are tipped. So instead of fighting the lifestyle. I think it’s in the best interest to accommodate it and make it easier to maintain it. I brought in some politics because it has enough influence that has tipped the scales I believe to fast for proper change to be made. But we’re all to blame. Touchy subject to say the least, but an important one. Especially to the future on the nomadic lifestyle which can be the answer to at least the immediate if not the long term situation. I hope this isn’t offensive... I didn’t type this to offend, but to share my thoughts. No one thing is to blame. It’s just a perfect storm. I mention the political aspect only because it’s one cog in the gear and it’s not to late on this matter to do something.

 

[sephson]

Cammalu touched on this point earlier, but as I too am one of those "evil" landlords, here's a bit of the landlord's perspective.

I own three rental properties. I pay the mortgages, taxes, insurance and association dues for those properties. The rent does not cover these expenses. Now add repairs and upkeep on top of mortgage, taxes, insurance and association dues. Between the three properties, I have to come up with an extra thousand dollars a months above and beyond what the rent brings in just to cover my basic expenses. When the washer breaks down or the air conditioner needs repairs, I have to come up with even more.

When something does break, it gets fixed or replaced as soon as possible and I worry about how to pay for it later.

When a tenant moves out, more often than not, the repairs to get the place ready for a new tenant cost more than the security deposit, so that's more money I have to come up with, plus I now have to pay all the normal expenses entirely out of my own pocket. Even when a tenant has taken care of a rental (which is extremely rare), there are still expenses to get the unit ready for a new tenant. On these rare occasions, I'll refund the full security deposit and just eat the cleaning costs.

I've got tenants who earn more than I do, but I still end up subsidizing their housing. Over the course of the last fifteen years, subsidizing my tenants' housing has cost me almost the equivalent of two years wages.

And no, I can't just raise the rent to cover my costs. If I did that my rents would be well above average rents for the areas my rentals are in and I would be unable to rent them at all.

How do I come up with the money to pay for all of this? I work full time or more. I very rarely eat out. I look for what's on sale when I do my grocery shopping. I try to keep my per-meal cost to a dollar or less. I almost never go to see movies. I don't use any pay streaming services. I keep my vehicles until they cost more to repair than to replace. I have burned through my savings on more than one occasion trying to keep my rentals afloat. There have been times when I had to borrow money to pay my mortgages. A year ago, while I was furloughed from my job, I had to move back into my mother's house and rent out the condo I was living in because I didn't have enough money coming in to pay for my own living expenses, never mind trying to cover the shortfall in the rent.

So with all these costs, why don't I just walk away?

Because owning these rental properties is not about today. It's about tomorrow. Eventually, they will be paid off and the rental income will help to pay for my retirement. I work in a field that requires me to be physically capable in order to do my job. With the injuries I've picked up over the years, there's a very real possibility that I may not be able to continue working until 68. I'm not going to get rich off of my rentals by any stretch of the imagination. At best I'll be able to maintain a lower middle class income.

It can be a bit of struggle holding on to my rentals, but I struggle now so that I don't have to later.

 

[1shemp]

sephson.If you are losing $1000 a month you are doing something wrong.

 

[crofter]

Bottom line is that your housing expense should not be more than a third of your income.  So if you are making $1200 on Social Security, max rent is $400 per month. If you are paying more than that, your economic health will suffer with housing cost eating into funds for other areas of life & is why Americans have no savings left.

If you are making minimum wage of $15 per hour fulltime, then your max rent cost is $600 per month. You can pay more, but does not make economic sense to do so- no matter how nice the place is.

Seems like there is no middle ground where rents are $400 to $600 per month and landlords are making money. I was a landlord for a while and did not find it to be profitable.
-crofter

 

[bullfrog]

Good example Sephson even with your $1000 "loss" a month you are still making money and doing well come tax time if you are in a higher tax bracket. In fact you are doing much better than most with 401K retirements and saving accounts. With todays average house price you are probably making several thousand a month in equity. If you do like many have and use that equity to end up with 10 AirBnb properties you can probably "retire" with between $20,000 to $50,000 a year then sell them all twenty or thirty years down the road to cover assisted living! Lol!!!

 

[1shemp]

Just sitting here thinking about how much I enjoy being drunk again.Good night,all