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re: The next housing crisis is here, and this time, it’s about rentals
Posted on 5/12/20 at 1:59 pm to RLDSC FAN
Posted on 5/12/20 at 1:59 pm to RLDSC FAN
This is going to be particularly bad in urban/high rent areas where even a $1200 check doesn't cover a month's rent.
These are also not usually renters who are behind on payments but choose to pay $2000-3000 rent specifically because of their high paying jobs. The people that rent in the city near work and buy somewhere they'll retire.
If many are not back to making big paychecks soon I can see a sizeable amount decide that it makes no sense to pay the high rent.
At very least, they may be chaos with the amount that move in search of a super low rent if lots of apartments are coming open.
There may need to be some odd things like stabilization in reverse.
I hope in NYC it causes the extreme amount of investors driving up the market with Air BnB to get out.
These are also not usually renters who are behind on payments but choose to pay $2000-3000 rent specifically because of their high paying jobs. The people that rent in the city near work and buy somewhere they'll retire.
If many are not back to making big paychecks soon I can see a sizeable amount decide that it makes no sense to pay the high rent.
At very least, they may be chaos with the amount that move in search of a super low rent if lots of apartments are coming open.
There may need to be some odd things like stabilization in reverse.
I hope in NYC it causes the extreme amount of investors driving up the market with Air BnB to get out.
This post was edited on 5/12/20 at 2:02 pm
1
Posted on 5/12/20 at 2:08 pm to OysterPoBoy
quote:
The landlord/renter relationship as we knew it could never last. Landlords became reliant on rent coming in and renters became reliant on having a place to live. It was always unsustainable.
My sarcasm meter is not the greatest today
Posted on 5/12/20 at 2:13 pm to Aubie Spr96
quote:
Funny. On CNBC today they did an investment segment stating that the riets were killing it because of solid cash flows.
I think you misunderstood. REITs are struggling mightily. Most have cut dividends substantially.
Posted on 5/12/20 at 2:19 pm to RLDSC FAN
We got out of that business last November. Good timing.
Posted on 5/12/20 at 2:22 pm to lsu13lsu
(no message)
This post was edited on 6/9/20 at 9:16 am
Posted on 5/12/20 at 2:22 pm to RLDSC FAN
Most landlords (not counting large apartment companies) are pretty happy if they come out cash-neutral. It's all about building up wealth in the value of the properties.
If the unemployment spigot if flowing, most people should be getting enough money to pay rent, considering the extra $600 per person per week. But we know it's not really flowing the way it is supposed to be.
If the unemployment spigot if flowing, most people should be getting enough money to pay rent, considering the extra $600 per person per week. But we know it's not really flowing the way it is supposed to be.
Posted on 5/12/20 at 2:26 pm to Eighteen
quote:
I mean, it wasn't a bad risk.
The problem is the cash flows are way out of line. You have a long-term note paid for with extremely short term contracts.
Posted on 5/12/20 at 2:28 pm to wm72
quote:
This is going to be particularly bad in urban/high rent areas where even a $1200 check doesn't cover a month's rent.
These are also not usually renters who are behind on payments but choose to pay $2000-3000 rent specifically because of their high paying jobs. The people that rent in the city near work and buy somewhere they'll retire.
People that pay $3k+ in rent aren’t getting a $1200 check or also having issues pay their rent during this though.
Posted on 5/12/20 at 2:38 pm to RLDSC FAN
Good opportunity to scoop up a few at a real good deal
Posted on 5/12/20 at 2:40 pm to I Bleed Garnet
quote:
People that pay $3k+ in rent aren’t getting a $1200 check or also having issues pay their rent during this though.
Maybe closer to $3k the amount of people diminishes.
However, I pay $2200/mo in Brooklyn.
I can just keep paying but how smart that will be depends on how quickly I'm making the same amount every month and not just dumping savings into rent.
I have a lot of friends in very similar situations.
I would hate to think I had to move -- I've been in the same place since 2009 -- but will certainly consider it if I'm paying much over the new lease rate for similar flats in coming months and especially if my business doesn't bounce back to close to the same level.
This post was edited on 5/12/20 at 3:29 pm
Posted on 5/12/20 at 2:41 pm to Bow08tie
quote:
Good opportunity to scoop up a few at a real good deal
Are you seeing anything? Most people have not been evicted yet.
Posted on 5/12/20 at 2:42 pm to Bow08tie
It didn't seem to affect Orange Beach condo rental prices. At least not for June. Damn, I was hoping.
Posted on 5/12/20 at 2:44 pm to OysterPoBoy
I think they are holding out hope there will be a quick turnaround. I feel like more 3 bedrooms are open than usual.
Posted on 5/12/20 at 2:45 pm to OysterPoBoy
So where are you suggesting these people are going to live? 
This post was edited on 5/12/20 at 2:46 pm
Posted on 5/12/20 at 2:47 pm to lsu13lsu
quote:
The problem is the cash flows are way out of line. You have a long-term note paid for with extremely short term contracts.
Not to mention we seem to have unforeseeable events that greatly disrupt tourism and our economy pretty regularly these days. About every 10 years
Posted on 5/12/20 at 2:49 pm to FlyinTiger93
quote:
We will have families 3-4 months behind on rent payments that they will not be able to recover from.
I wonder how long it will be before "if you sign a new lease today, we can spread that back rent out over the course of the new lease" deals start popping up.
Posted on 5/12/20 at 2:50 pm to OysterPoBoy
quote:
Landlords became reliant on rent coming in and renters became reliant on having a place to live. It was always unsustainable.
We were fools to believe that bubble would never burst.
Posted on 5/12/20 at 2:51 pm to RLDSC FAN
The short term rental issue is a strange one for tourism-reliant cities. See, gentrification these days happens one of two ways. Either, new more affluent residents move in to poor neighborhoods, fix them up, open up businesses, and drive out the residents, or Air B&B's do the same. The difference is that the owners of the air B&B's don't live there, they don't rent to long term tenets, so the people living in those homes just stay for a weekend at a time. They spend money at local stores and restaurants, but they don't open their own businesses. Is that good or bad for the city as a whole? In a lot of European cities, air B&B's have taken over trendy tourist neighborhoods to the point that no locals live there any more. The neighborhoods still have little shops and businesses for the tourists, but the neighborhood has essentially become a giant resort. The residents don't live there and pay income taxes. Do the vacationers pay more sales taxes than renters would have?
Is that good or bad economically? Is that good or bad culturally? It arbitrarily inflates the real estate market pricing out long-term renters. So, I'm sure my friends who live in New Orleans will be happy if this means lower rent prices, but we all know it won't.
Rent prices in cities are like crawfish prices. No matter what blessing or calamity strikes, somehow, the result is always higher prices, never lower prices for the consumer.
Is that good or bad economically? Is that good or bad culturally? It arbitrarily inflates the real estate market pricing out long-term renters. So, I'm sure my friends who live in New Orleans will be happy if this means lower rent prices, but we all know it won't.
Rent prices in cities are like crawfish prices. No matter what blessing or calamity strikes, somehow, the result is always higher prices, never lower prices for the consumer.
This post was edited on 5/12/20 at 2:57 pm
Posted on 5/12/20 at 2:52 pm to Sneaky__Sally
quote:
Not to mention we seem to have unforeseeable events that greatly disrupt tourism and our economy pretty regularly these days. About every 10 years
Airbnb etc was a very good idea for people that wanted to rent their place out or rent out their second home. It is a problem when everyday joe's are essentially a hotel owner with a bunch of units and a bunch of debt.
Posted on 5/12/20 at 2:55 pm to RLDSC FAN
quote:
Congress included a provision in the $2.2 trillion rescue package it approved in March that allows homeowners with government-backed mortgages to defer payments for up to a year.
What they didn't publicize in this is the fact it's not that payments are tacked onto the end of your loan. It's that when the deferment is over, the full amount you would have paid is due. Meaning if your note is $1,000 per month and you defer for 12 months, your amount due month 13 is $13,000.
that's the bubble I'm waiting to burst.
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