[lbo-talk] Max's house (was capitalism and collapse)

bitch at pulpculture.org bitch at pulpculture.org
Sun Aug 12 06:14:21 PDT 2007


At 08:38 PM 8/11/2007, you wrote:
>On 8/11/07, Max B. Sawicky <sawicky at verizon.net> wrote:
> > > My impression about the housing problem
> > > is that people won't be on the street -- they'll be renting garden
> > > apartments
> > > and the like. If the mortgage goes belly up they still have the income
> > > they
> > > were using to service it available to pay rent.
>
>I hope so. But a landlords have grown very restrictive. Some landlords
>won't rent to anyone with a foreclosure or eviction. Others will
>insist on extremely high deposits they may not be able to finagle. It
>varies from area to area how serious a problem this is, since it is a
>matter of business practice rather than law. Obviously the lower the
>vacancy rate, the fussier a landlord can afford to be.

Yup. In FL, it was first, last, deposit equal to a month's rent. This demand could and does effectively put people out of the market because, just to rent an $1000/month two bedroom condo, you need $3000, cash money. If you have that, you could buy, especially as first time buyer.

Where you can often get away from that is with apartment complexes and apartment homes. Because these places often get some form of government money, they could get you in with a reduced deposit, lowering the price to get in to about $2250 - 2300.

Here, on the other hand, the practice is one month's rent as deposit. Why the difference? No idea. Military town, so had no choice because so many of the younger families could just live on base. And, because it's a normative business practice, everyone had to follow a similar practice or be less competitive for rentals.

And, if you end up having a flood of people on the rental market, the rents will go up. This happened pretty quickly in Florida. IT was very affordable to rent before the boom, but as soon as the real estate market heated up, it became less and less affordable in terms of what you got for your money.

OTOH, as I mentioned in my last mail, there will be people on the market for rentals, but there will also be a lot of people trying to rent homes they can't sell. Plus, I see what I used to see in the deindustrializing rust belt. Real estate companies will cut a deal with the seller. If they can't sell your home in a given time frame, they'll buy it at a percentage. They end up flipping it or renting it. Or, there advertising their services, more and more, as both real estate company that specializing in selling and in property management. They operate as your rental agent: screening applicants, showings, collecting rent, initiating evictions, enforcing rental contracts, etc. The market's so hot for rentals right now, a lot of this places don't even use labor to show you the place. You stop by, provide a deposit and a copy of your license. You get a key, drive yourself to the unit, look, come back in an hour or forfeit the deposit. And, basically, they act like they don't care about renting you the place in the least. "Oh hi. You want to rent. Whatever."

[1] One funny thing I heard about the desire to rent to anyone, even on a month-to-month basis to someone like us who camped out on a mattress on the floor in the living room so we had a sofa/bed. It's better to have stuff in a house than empty. First, it gives the appearance of an owner living there. Better for preventing buyer from lowballing the offer b/c they can't be sure the owner is desperate. The other thing? Even if you don't want the hassle of renting, they will go to the trouble of having the place decorated and filled with furniture from a service that does this. Why? Because the new open floor plan and loft style homes are hard to sell when empty. People see all this space, but are put off b/c they don't know how to turn it into space that's divided into living areas. It's a booming little micro-business: companies which rent furniture and provide interior decorating services. When the furniture's served its purposes or when it's damaged, they sell it to the public at a warehouse and advertise on ebay and criagslist. heh.



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