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Post by Savoir Faire-Demogague in NJ on Mar 14, 2011 8:20:53 GMT -5
Old couple being interviewed, lived in apartment since 1980, rent was low up until the last few months. Local university bought the property and is going to remove the building, the couple have 1 month to move out. Cheapest place to rent now.....4 times what they were paying.
The problem here is not being forced out of their apartment and having to move into much a higher priced apartment, but rather this couple not paying the market rate for a rental fo rthe last 30 years.
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brdsl
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Post by brdsl on Mar 14, 2011 9:21:29 GMT -5
Actually, the problem was they didn't own a home....they rented.
I am not sure the condition of the apartment, it could have been in disrepair and now they cannot find a similar slum.
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Post by Savoir Faire-Demogague in NJ on Mar 14, 2011 10:30:54 GMT -5
Actually, the problem was they didn't own a home....they rented.
They were paying below market rates for an apartment for 30 years, per your post. They also did not have to pay for maintenance and repairs for 30 years either. The bottom line is, there is not sufficient data in that story on their finances to come to any sort of conclusion. For every example someone can come up with to show that home ownership is more beneficial, an opposing example can also be presented. I can cite my personal experience with renting in the last 16 years but that is besides the point.
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brdsl
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Post by brdsl on Mar 14, 2011 11:08:43 GMT -5
"For every example someone can come up with to show that home ownership is more beneficial, an opposing example can also be presented."
You are commenting due to your experience of 16 years on the east coast.
I am commenting due to my experience in the market in which I was posting the story from.
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Post by Savoir Faire-Demogague in NJ on Mar 14, 2011 11:27:42 GMT -5
You are commenting due to your experience of 16 years on the east coast.
I am commenting due to my experience in the market in which I was posting the story from.
Location is not relevant. A HCOL area will have higher real estate prices, correspondingly higher rents, and likely out of proportion RE taxes A LCOL area will have lower RE prices, lower rents, and much lower RE taxes.
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brdsl
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Post by brdsl on Mar 14, 2011 12:54:33 GMT -5
Location not relevant in real estate?
HCOL have low cost areas, just as LCOL have high cost areas.
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Sum Dum Gai
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Post by Sum Dum Gai on Mar 14, 2011 13:01:21 GMT -5
Old couple being interviewed, lived in apartment since 1980, rent was low up until the last few months. Local university bought the property and is going to remove the building, the couple have 1 month to move out. Cheapest place to rent now.....4 times what they were paying. That's actually the dream scenario for always renting. They had below market rental rates for three decades, which gives them a lot more to invest. If you're going to rent for life, that's exactly the situation you want to be in. Oh, and the people commenting on my census numbers over the weekend are probably right. I wasn't even looking at national averages, it was by state. I was looking at the averages in CA. I haven't gone back and looked, but I imagine the numbers will vary a bit from state to state, and even area to area within the state. The area I live in is expensive. It's pretty much always been expensive. Even back in the day when it was cheap (compared to current prices anyway) it was still expensive compared to most of the rest of the country. It's just something you accept by living here. If you live somewhere that's historically been cheap the math will work out differently.
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brdsl
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Post by brdsl on Mar 14, 2011 13:42:32 GMT -5
Dark,
True. If they invested the difference of rent and home mortgage, factoring in maintenance, and incrementally adjusting the amount of money investing due to inflation.
btw. The people are broke, elderly, and unless they find another apartment to live in for roughly what they were paying (probably not happening), homeless.
The second scenario is the typical. I would guess if you buck the trend, and find a place with low rents the next 30 years, and invest the difference...you can do it. I am not sure that is realistic in most instances.
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