You just admitted this not being always true. Do you remember what you wrote in post #27 ?Originally Posted by Zippyjuan
Nonsense. Rent is based on supply and demand.
Eh?? Of course he will. I would rather get some rent than none. If the market is down, competition is up, and my cost per apartment is $800/month - I will happily take $600/month than nothing at all.
And I'll think about selling that money-pit ASAP.
I think it is time to revoke your financial expert card. Statements like these can impress you fellow coworkers from the checkout line, but can not withstand a closer scrutiny of a minimally conscious individual (not in a state of coma).
Exactly. You cannot afford to keep losing money. Short term, perhaps.
The only thing determing the price of rent is what renters are willing to pay. The landlord's costs have nothing to do with it.
If there are no renters who are (at least) willing to pay the landlord's break-even rent price, then he will have to (1) take a loss (which he may be able to do for a while, but cannot do indefinitely), (2) sell the property, or (3) use it for some other purpose.
The Bastiat Collection ˇ FREE PDF ˇ FREE EPUB ˇ PAPER Frédéric Bastiat (1801-1850)
- "When law and morality are in contradiction to each other, the citizen finds himself in the cruel alternative of either losing his moral sense, or of losing his respect for the law."
-- The Law (p. 54)- "Government is that great fiction, through which everybody endeavors to live at the expense of everybody else."
-- Government (p. 99)- "[W]ar is always begun in the interest of the few, and at the expense of the many."
-- Economic Sophisms - Second Series (p. 312)- "There are two principles that can never be reconciled - Liberty and Constraint."
-- Harmonies of Political Economy - Book One (p. 447)ˇ tu ne cede malis sed contra audentior ito ˇ
Because the banks get a piece of every transaction you make with it.Thank you for letting me know that. I have resisted a debit card and never activate them and cut them up. I don't understand why banks insist on getting a debit card to even open some accounts
No. Reserving a hotel with a debit card for any amount of time can be prohibitive beyond belief, especially internationally. They can and will put a huge hold on your bank account --- something that would not happen to the same degree with a credit card. Keep in mind that the hold is calculated assuming you're a crazy person and are going to do just about anything and everything you can. In short, it's going to be way more than you'd really spend, and that hold can be on there for a week. If you have double or triple what you actually budget for your room in your account, plus money for everything else you planned to do on your trip, by all means, but not everyone does.
Genuine, willful, aggressive ignorance is the one sure way to tick me off. I wish I could say you were trolling. I know better, and it's just sad.
Your reply supports what I said- thanks. A landlord cannot continue to rent out a place at less than his costs of the unit. Thus his costs DO effect the rent asked.
If he can't get his costs back, he takes it off the rental market.If there are no renters who are (at least) willing to pay the landlord's break-even rent price, then he will have to (1) take a loss (which he may be able to do for a while, but cannot do indefinitely), (2) sell the property, or (3) use it for some other purpose.
No. You said, "there are other factors in determining rents. But rents will not be below the landlord's costs or he will not rent it out" That is not the case.
To repeat: The only thing determing the price of rent is what renters are willing to pay. The landlord's costs have nothing to do with it.
Last edited by Occam's Banana; 10-09-2015 at 09:16 PM.
The Bastiat Collection ˇ FREE PDF ˇ FREE EPUB ˇ PAPER
- "When law and morality are in contradiction to each other, the citizen finds himself in the cruel alternative of either losing his moral sense, or of losing his respect for the law."
-- The Law (p. 54)- "Government is that great fiction, through which everybody endeavors to live at the expense of everybody else."
-- Government (p. 99)- "[W]ar is always begun in the interest of the few, and at the expense of the many."
-- Economic Sophisms - Second Series (p. 312)- "There are two principles that can never be reconciled - Liberty and Constraint."
-- Harmonies of Political Economy - Book One (p. 447)ˇ tu ne cede malis sed contra audentior ito ˇ
I don't use debit cards anymore. I just use credit. And I only keep 1.
One percent for primary residence for me , where I really get skinned is the others .
Are you the guy paying for a box of breath mints with a credit card ?
You are playing the game they told you to play. You could have used the money to start a business. Is being a landlord so much fun ?
I see a lot of idealism here that I agree with and have for 7 years, but now I am thinking about reality. Its not as easy as "save up for it like the old days" because the debt industry has inflated the hell out of everything. To live in a city, you need to drop at least $100,000 to $200,000. Now, living in a rural area or buying land or leasing land and building on it is obviously cheaper, but I dont foresee an interest in doing that any time soon. Also, I can scrimp and save for 30 years and finally at 50, own a house. For what? I might be dead 30 years later. Alternatively, I can take out a mortgage in the next 5-10 years and have my own house and in 30 years, own it outright (property taxes aside).
Unfortunately, we live in a system of debt and to have any reasonable existence, you have to join the party. I know I can handle and manage it well, so I think its worth considering. Enjoy it while it lasts, ride the fall, and prepare for it (maybe in that rural outpost).
Like I said - take out a mortgage on an income producing property. A small apartment building or a duplex. Then let your tenants pay your rent.
Borrow $120,000 at 5% pay it back over 30 years. That will cost you about $232,000.00. Managing debt well?
This is inescapably wrong. I have an 800 FICO score. I haven't had a monthly balance in years, as I pay everything immediately after purchasing. No car or home loan.
The epitome of libertarian populism
What are the opportunity costs- what else can you do with that money? You could not borrow money and use the funds which could have gone towards buying a home and gave it away to a landlord to rent a place and get nothing besides a roof over your head. Or you can use that money to pay off the loan and acquire an asset you can sell for some or even all of the money you spent on the loan (depending on what housing prices do). Then when it is paid off, your costs of living drop significantly. Or you can keep paying rent and get nothing. Which gives you the highest return in the long run? Zero in 30 years? Or a valuable asset plus lower cost of living in 30 years?
Me- I am enjoying the extra money I now have every month. (I actually paid mine off in under 15 years).
Start with a smaller home like a condo, before you take the plunge with a large home. In many situations you are actually paying less for the mortgage per month than you would pay for renting the same exact property. If mortgage rates are only 3 to 5% over 30 to 40 years, it makes a lot more sense to mortgage a home. Owning a home will build equity in the long run which you can use as leverage to get other loans. Also put 20% down or more on the mortgage, you will pay it of a lot sooner with much less interest costs.
Some credit card info, you need at least 2 or more cards to establish good credit. Don't ever close an account, it will hurt your credit in the long run, just cut the card up when you pay off the full amount. Don't max out cards, stay around 30% of the max limit. Never pay just the minimum amount per month, this will also hurt your credit. Pay about 20% more than what is required. This will save you a lot of heartache.
In 30 years the home may be worth $500,000 or more. Seems like a great deal.
Mine is worth more than twice what I paid for it. Or I could be paying rent- higher rent than I would have been paying when I bought the place. A mortgage locks in your payments. Rents can (and often do) go up over time.
You have made up your mind. So why ask us?
I already told you there's a different way. A road less traveled. A short circuit. I can tell you about it if you like. But do you want to hear it? Or are you already convinced you're trapped and don't want to hear anything contradicting your theory?
Mortgage might be right for you. Or it might not. But you shouldn't take one out because you're feeling trapped and giving up and think there's no other choice. That's the way to make bad decisions, IMHO. If you get one, it should be because you love the idea and have carefully considered the long-term consequences and with eyes wide open decided "the benefits way out-weigh the costs, this does not violate my values, and this is going to be fantastic." Do it from a position of empowerment, not defeat. Otherwise, you will regret it, guaranteed.
Last edited by helmuth_hubener; 10-15-2015 at 03:36 PM.
Zippy, why don't you take financial advice and shove it where the sun don't shine ? Next you will tell us real estate prices always go up.
You are free to accept or reject anything you read on the forum- by me or anybody else. Perhaps you can share some suggestions on the topic? Which you think would be better and why? Owning is certainly not for everybody but it has worked extremely well for me. I can't promise it will work for you or anybody else. Do you suggest staying a renter? Does that improve ones financial situation in the future?
Last edited by Zippyjuan; 10-15-2015 at 04:48 PM.
Nobody believes you own anything. Maybe a flesh light - http://www.fleshlight.com/
Any structure that shares a roof and dirt with another tenant is not "owning a home"....
That is your solution to where you want to live, eh? I prefer my home ownership but whatever works for you!
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