Renting in today's market. Advice needed

loyolabenson

loyolabenson

make monies
May 17, 2007
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Alright, I'm in the market for a home/apartment/town home (doesn't matter)
for rent. We have money to buy, but are waiting for the market to dip even more, until I see jobs created Its a frozen market IMO.

I see all the leverage renting or buying on the side of the consumer.


My situation is good 750 credit scores for me and my wife, a combined after expense monthly income above xx,xxx and has been such for the last 4 years.
An asset column in the low xxx,xxx.


So we find this place that we like and the owner wants itemized bank statements from my personal and business accounts. I'm thinking thats too much, especially when I know that place is going to be empty for awhile anyway. This guy has no leverage at all. We already provided deposit info, credit scores and references.


Can anyone fill me in on a way to handle this? My wife is driving me crazy cause we just had a kid, so she is so emotional with any decision. But fuck that, I have principles. I don't like getting fucked. Especially by anything to do in real estate knowing full well that they should be kissing my ass in today's market.

I don't want some asshole with a townhome all up in my business.
 


Depending on where you are in the country - you have it completely wrong on the rental market.

Many people lost there homes and many people can't get loans because you actually need a down payment and job these days. This has caused a MASSIVE increase in the rental market in many areas. In many places it most definitely is NOT a market favorable for renters and prices have gone up a good deal. The reason the LL is requesting that stuff is because you are likely mistaken about how easily he could fill it with another person.

In my area there are many places that if you buy the home with 20% down your interest+HOA+tax is going to be less then renting. That's because tons of people are forced to rent because they can't get a loan.

As for advice on your indivudal situation.

1. Show him the bank statements. Really this causes no harm to you and seems to just be a source of pride for you. "I'm awesome he should rent to me without asking to many questions because my God I'm awesome." It's just business you should get over the pride. It certainly doesn't cost you anything or put you at risk to do this.

2. Find a different place to rent.

Those are your only 2 options IMHO - some people might advise you to offer to prepay a few months rent ahead of time or have a larger deposit. That would be a really stupid thing to do though if you could have gotten it with just showing bank statements because you then put yourself in a situation to get fucked.

Edit : I think it's kind of amusing you are accusing your wife of being the emotional one when it's you that doesn't want to show bank statements to prove income to, as you see it, a lowly town house owner.
 
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I'm going to guess you are a property owner, sorry about the market bro.

I've seen a few places withe everyone kissing my ass and rightfully so. Not because of who I am, but because of the market. In this economy I'll use all the leverage I can get and I advise all u gay web masters to do the same.

My wife showed her poker hand by offering to pay more than the asking price, after putting her in line we are on the same page again. She now realizes that may have cost us the place. I'm indifferent where we live as long as I have a kick ass view.


If we have to find a different property, fine. But I'm not giving in to those ridiculous demands, in fact, my accountant agrees with me.

Keep lying to yourself where the leverage is. Maybe if this were a cheap property I'd agree with you. But this won't fill up fast and peeps will want that Christmas cash instead of an empty property.
 
As a property owner, I've had several tenants that sign with good FICO scores and good income and have still been burned. Your being asked to show proof of resources because a lot of people with good credit turn into shitty tenants.
Put yourself in their shoes.
 
I tend to agree with miketpowell. As a land lord of both low end and higher end homes the rental market is most definitely with the land lord. Lots of people lost their homes but still need a place to live, and renting is where it's at. I can't keep people out of my rentals, I increase the rent every time the contract is up for renewal and I have no vacancies. I get people that call me weekly looking for a place to live. If you were buying I'd agree with you. Banks aren't lending without 20% and that's keeping a lot of people from buying.

With that said ... I never ask for bank statements. That always seemed a little nosy IMO. I do ask for tax statements from the last 2 years on my higher end stuff however but I'm basically just looking at their income to make sure they can afford it. I'd tell him that your bank statements are none of his business and keep looking if it were me.
 
medicalhumor said:
As a property owner, I've had several tenants that sign with good FICO scores and good income and have still been burned. Your being asked to show proof of resources because a lot of people good credit turn into shitty tenants.
Put yourself in their shoes.
Click to expand...

I hear ya, I guess I think it's silly to show itemized personal expenses. I mean do they really need to know about my fleshlight and 100 tubes of lube?
 
cheshire said:
I tend to agree with miketpowell. As a land lord of both low end and higher end homes the rental market is most definitely with the land lord. Lots of people lost their homes but still need a place to live, and renting is where it's at. I can't keep people out of my rentals, I increase the rent every time the contract is up for renewal and I have no vacancies. I get people that call me weekly looking for a place to live. If you were buying I'd agree with you. Banks aren't lending without 20% and that's keeping a lot of people from buying.

With that said ... I never ask for bank statements. That always seemed a little nosy IMO. I do ask for tax statements from the last 2 years on my higher end stuff however but I'm basically just looking at their income to make sure they can afford it. I'd tell him that your bank statements are none of his business and keep looking if it were me.
Click to expand...
Good post. Good advice. Thank you.
 
Lol, they'll see the boxes of lube when you move in anyway

I know the market is still stagnant but rates are historically low, but that might not last as long as the low RE market. 20% down on a jumbo loan is still standard but you should be able to get an FHA with just 3-5% down
 
+1 to miketpowell

Right now is actually one of the best times to buy for those who can get approved. Rock bottom interest rates.
 
As a real estate investor that owns 20+ rental properties I wouldn't expect you to show your bank statements if everything else was clean. If the credit/background checks came back good and you didn't have any prior evictions I wouldn't require it on any of my properties. If there was an issue with those then I'd probably ask for proof of funds/income as well as first, last and security (with the current economy I usually only ask for first and security if I'm comfortable with the tenant).

That being said if you're looking to buy I would say this is as good a time as any time depending on what metropolitan market you're in. There are very few that are still showing big drops, most have been pretty stable for a while now. I wouldn't expect any significant increases but if you want to buy I'd start shopping for a killer deal and being able to be patient and not "needing" to buy right away will help you find that deal. You have time though, with the backlog of foreclosures prices will stay down for another 2-3 years. Interest rates are also on their way back up so whatever small dip you see in home prices will be negated by the fact you are borrowing money so cheap. Just find the right motivated seller or try some short sales that can take 3-4 months to play out, sometimes you can get stuff for less than you think. Even with the market prices being so low right now I'm still able to buy stuff substantially below market value, it's just a numbers game. I look at 10+ houses a week and buy one every 4-6 weeks, and I put in a ton of lowball offers.
 
Yeah i think you've got it wrong here.

Because of the housing market. Renters are everywhere.

So. If you were buying the house yeah. Tell the guy to go fuck himself. But you're actually just one of many possible renters.
 
Hav3n said:
Yeah i think you've got it wrong here.

Because of the housing market. Renters are everywhere.

So. If you were buying the house yeah. Tell the guy to go fuck himself. But you're actually just one of many possible renters.
Click to expand...

Yeah the housing market has been great for rentals. My single family rental homes last 2-3 days on the market and my apartments last maybe a week. If somebody thinks because the housing market is crap they have leverage on me they're wrong. I've had potential tenants try to offer lower rents than I was asking and I always end up getting my full price from somebody else.
 
Many good responses here all pointing to the same thing- Your strong stance on the leverage is incorrect. You should be buying not renting.

miketpowell said:
Depending on where you are in the country - you have it completely wrong on the rental market.

Many people lost there homes and many people can't get loans because you actually need a down payment and job these days. This has caused a MASSIVE increase in the rental market in many areas. In many places it most definitely is NOT a market favorable for renters and prices have gone up a good deal. The reason the LL is requesting that stuff is because you are likely mistaken about how easily he could fill it with another person.

In my area there are many places that if you buy the home with 20% down your interest+HOA+tax is going to be less then renting. That's because tons of people are forced to rent because they can't get a loan.
Click to expand...
Spot on.

medicalhumor said:
As a property owner, I've had several tenants that sign with good FICO scores and good income and have still been burned. Your being asked to show proof of resources because a lot of people with good credit turn into shitty tenants.
Put yourself in their shoes.
Click to expand...

I second this. Have friends this has happened to as well. In the end, you are in the huge herd of "renters" and any owners is going to label you as such and not give a fuck if you say you make lots of money because guess what... you are still a renter. If you don't like what they require, move the fuck on to a different house and stop bitching about it.

cheshire said:
I tend to agree with miketpowell. As a land lord of both low end and higher end homes the rental market is most definitely with the land lord. Lots of people lost their homes but still need a place to live, and renting is where it's at. I can't keep people out of my rentals, I increase the rent every time the contract is up for renewal and I have no vacancies. I get people that call me weekly looking for a place to live. If you were buying I'd agree with you. Banks aren't lending without 20% and that's keeping a lot of people from buying.
Click to expand...

another great response.

sublimeguy said:
That being said if you're looking to buy I would say this is as good a time as any time depending on what metropolitan market you're in. There are very few that are still showing big drops, most have been pretty stable for a while now. I wouldn't expect any significant increases but if you want to buy I'd start shopping for a killer deal and being able to be patient and not "needing" to buy right away will help you find that deal. You have time though, with the backlog of foreclosures prices will stay down for another 2-3 years. Interest rates are also on their way back up so whatever small dip you see in home prices will be negated by the fact you are borrowing money so cheap. Just find the right motivated seller or try some short sales that can take 3-4 months to play out, sometimes you can get stuff for less than you think. Even with the market prices being so low right now I'm still able to buy stuff substantially below market value, it's just a numbers game. I look at 10+ houses a week and buy one every 4-6 weeks, and I put in a ton of lowball offers.
Click to expand...

also true. while I would certainly stop throwing your money away on rent, if you are convinced you are right and all of us are wrong, odds are you still have some time before the market goes back up. But the odds of it getting even better? slim to none. housing market/mortgage rates are as low as they are gonna get generally speaking.
 
Thanks for all the opinions and advice in here. Its appreciated.

A couple things to note to anyone who says to buy instead of rent...


How can you be so sure the market has not bottomed out yet? These government programs can't keep these artificial prices up forever. The jobs are not coming back people. No jobs=no money= frozen market.

I will patiently wait and pay cash for a home if the right opportunity presents itself.


I will state again, the overall rental market is indeed on the side of the owner for the most part. But when you hit a certain price point that is out of the price range for the majority of families then you are dealing with an extremely smaller demographic, that is my situation. We have absolutely 0 competition for this property. It has been empty for months.




@guerilla touche, but when it come with women I am old school. I do not mind doing all the hunting, but you better make me a sandwich and shut your mouth when it comes to making significant household decisions.
 
loyolabenson said:
A couple things to note to anyone who says to buy instead of rent...
Click to expand...
I am a lifelong renter. I love it. I am free. I have saved thousands of dollars in interest, and I have had the money to fund most of the things I want to do or try, most of the time.

Also, unlike most home owners, I have savings and zero personal debt.

If renting is good enough for Peter Schiff, it is good enough for me.

Also, property comes with a lien, which is property tax. If your house is worth a million but you don't pay your property taxes, you lose your house. No one truly OWNS any land, and convincing people to invest in something they cannot truly own seems like fraud to me.

I say, it is better to acknowledge the reality of [sic] property ownership and rent, because even the guy buying a house, is just renting it from the government at the end of the day.

loyolabenson said:
@guerilla touche, but when it come with women I am old school. I do not mind doing all the hunting, but you better make me a sandwich and shut your mouth when it comes to making significant household decisions.
Click to expand...
I can dig it. I am not a fan of genderless households.
 
You could buy if you plan on holding for at least 3-5 years.

We aren't bottomed (in all places in the country) but it will eventually come back.

Real estate is all local so your area might be well on its way to recovery or... just looking at the ledge.

I'd rent with the option to buy after 1 or 2 years (if you can swing that from the sellers).

'Recovery' is still a ways off - 2014-2018 is the best estimates


BTW: my FT job is in the Bank REO/foreclosure biz.
 
loyolabenson said:
I will state again, the overall rental market is indeed on the side of the owner for the most part. But when you hit a certain price point that is out of the price range for the majority of families then you are dealing with an extremely smaller demographic, that is my situation. We have absolutely 0 competition for this property. It has been empty for months.
Click to expand...

Sounds like the owner already owns the property outright and/or isn't hurting for cash flow. Just because you think there is zero competition doesn't mean it's in your favor.

You have to look at it from the owners perspective. Just one bad tenant can easily cost more than an empty one (in property damages or in non-payment and eviction headaches, depending on the state)

Requesting itemized bank statements is definitely overkill for most rental units but if it's high-end as you say, maybe not. Might be a result of you being self-employed.
 
If the landlord is a pain to deal with now, he'll probably be a pain to deal with whenever you need repairs or maintenance on the property. Since you're set on renting over buying, I'd keep looking for another decent place to rent.
 
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