Post: #1

Many are now paying over 50% of their incomes on rent alone. The healthy rate should be about 25 -30%. With most of one's income going on rent, many have little money to spend or save. This slows down the economy - no has money to buy things. This also causes loss of jobs. People become frustrated, angry and depressed.

The real estate market has been heavily speculated with. It seems it is ready for another crash.

How is this being managed with some. With little money one cannot travel -- one is just stuck.

Post: #2

Mortgages are allowed to be leveraged up to 60% of a person's income. I highly doubt it's renting that is the issue. For the average person, a home is the largest "asset" they will have. I would never buy a home for myself until I can put 50% down as it is not guaranteed to increase in value, as we've seen. However, buying rental property is a great way to generate passive income on a monthly basis.

In regards to your last point, make more money.

I'm sick of hearing "it's going to crash" with regards to any market. People make money in all environments, and simply, be smart. When you start to see a pull back, hold off. When prices are still declining, hold off. When it nears the bottom, buy. These things are cyclical.

You also don't buy on speculation, you buy on principle of cash flow. Housing has historically kept pace with inflation, so it's really not this huge vehicle to getting rich everyone seems to think it is (especially in China where there are entire cities sitting vacant because "Real estate always goes up!")

Post: #3

Easier said than done. But where there's a will there's a way. Play the game and become an owner. This is a great time, but unfortunately home prices have risen I believe pretty much all across the US. If it does crash again, that will be your chance. Like FinalEpic said, you buy based on principal of cash flow. Then get yourself a property manager so all you have to do is collect the check.

Post: #4

If you have a job that pays you a lot of money, you won't have time to travel anyways. Higher earners generally work brutal hours.

You have to build a long term strategy to become an owner yourself.

Post: #5

(01-12-2016 12:55 AM)Disco_Volante Wrote:  If you have a job that pays you a lot of money, you won't have time to travel anyways. Higher earners generally work brutal hours.

This is true for "Employees" not necessarily "Employers."

I think the bigger issue is housing pricing reflects the modern 2 income family. It leaves single people in the dust.

To some level it likely forces many people to live with their partner / wife / girlfriend whether they are ready to / want to.

Post: #6

All of this is irrelevant if there is a financial crash. You don't own anything then, except something that can be burned down by a crowd of angry drunken people. Then the bank forecloses on you *anyway* and you have nothing except a huge debt. You are living in the slums with the rest of the angry people who burned you out.

That's what happened in the Great Depression. Then they had WW2 and killed off half the male population. Just sayin.

Post: #7

I think the OP was talking more about primary residence real estate options vs buying property solely to generate rental income that has been mentioned. Not everyone wants to be landlord and deal with the bullshit that comes with it. The advice people gave though is solid however.

In a lot of metro areas (where the largest amount of jobs are located), there are serious issues with lack of available middle-tier rentals. It's either high-end luxury apartments or sketchy gentrified neighborhoods which still aren't cheap; which might just be reflective of the fact that America is losing its middle class in general. Buying (as a primary residence) is even more problematic unless you know you are going to remain in a single location for an extended period of time and even then, you are always potentially competing with international buyers with lots of cash trying to park their money somewhere. This is assuming you can even afford to buy; many cannot due to limited inventory that is within their price range.

There are also issues with over-regulation in metro areas and everyone in a good location fighting every piece of development and often winning. It's going to take a lot to turn things around in a lot of cities real estate wise as jobs become increasingly scarce nationwide with limited land to develop on and the population exponentially growing. A Trump Presidency might fix this as he fights to kick out illegal immigrants (improve wages and opportunities) and bring jobs back to a lot of smaller cities all over the US, thereby making living in these cheaper areas a more viable option. But who knows at this point.

If you want relatively cheaper real estate and don't want to deal with being a landlord, you have three realistic strategies today:

1. Make enough money in expensive metro areas that any increase in rental cost is made up by increased income. "Average cheap rent" in flyover country is $600-700. "Average expensive rent" in major metro areas is $1600-2000 for something comparable.

If you can after tax make around 15K more a year (which you should get close to given being in a more expensive area), there is no real difference in the end between an expensive area vs cheap area of the country. Generally speaking, you should live in the expensive area due to better amenities, higher income potential, and more professional opportunities.

2. Develop a career skill set that is portable enough to allow you to live in many cheaper/flyover country spots. Medical jobs for example are very portable and actually have trouble filling staff in more suburban/rural areas and will pay better vs city opportunities.

3. Live at home for free/cheap or live with roommates cheap and aggressively save to purchase a property largely with cash in several years.

If you are living in an area where most of your money is going to rent, you need to move or find another job. Too many people I've notice have quite the entitlement complex when it comes to their living situation; thinking they deserve more or have a default right to live wherever they please because they like a particular neighborhood. I'm not saying this is you; just speaking generally. But if you want prime real estate in a prime city, you better get a prime job and prime cash flow. There really isn't many ways around it.

Post: #8

In the Midwest where I'm from rents have exploded and many people younger than Baby Boomers don't have the money to buy houses. They don't make enough to save for a good down payment and the banks have tightened up giving out mortgages to waiters and Uber drivers. As a result a lot of money from investors has come in, bought up most of the rest estate and is jacking up the rent. Its like shooting fish in a barrel. The investors know people cant get a loan from the bank so they have to rent or live with their parents. Living with mom and pops is not cool, so people rent.

Its an anecdote, but one Ive heard from people all over the states.

Post: #9

Here in Austin, rents are outrageous. I know lots of people who are living in houses with four and five, and their rooms are small. Even more ridiculous is that people are sometimes signing two-year leases.

I'm probably going to leave Austin in the near future, but I'm not sure where.

I probably spend about 30% of my income on living expenses--rent, utilities, etc.

Post: #10

I think its important to mention the locales that you are referring to in terms of rent etc.

Northern Canada - rents have risen, but aren't outrageous despite low vacancies. This is because the rental clientele is an increasing amount of native indians that are on fixed government income. Low vacancies but fixed prices. Residential real estate is ridiculous, like the rest of Canada. A house I bought for 110,000 in 2003 sold in 2014 for 210,000

Rural Wisconsin - rents have gone up because people can't get mortgages as easily and section 32 housing has expanded which forces up rental prices for private renters. Real estate there seems pretty stable though.

East Tennessee - rent is high with few options due to a) katrina displacements b) a large population that can't ever get a mortgage under new rules c) a rental market that doesn't have much inventory to begin with...this is why trailer parks exist. Real estate is rising quickly though it is still not recovered 2008 losses.

Post: #11

Generation rent has next to no pension. Struggling grey generation have to sell their homes to be looked after and the young disregard them. Can't wait for my generation to turn 60. It will be even worse.

Post: #12

One of the reasons I wanted to move to Texas so badly (at least until oil crashed) was that it consistently had the best ratio of housing prices to median hourly income.

Post: #13

As much as I hate landlords and loathe rentals as a whole, they really aren't all to blame. They're just opportunistic whores in it for the money.

There's three parts of this equation.

1. Speculators (ie landlords) You can't really blame them, they're just taking advantage of a situation. If this wasn't available they'd game something else.
2. Bankers: These folks are working hand in hand with number 3. These guys get money when mortgages are made and since we're in a fractional reserve system they can hand out loans like crack cocaine.
3. Government: The government and the bankers are mostly in collusion with each other. The government after letting businesses export jobs abroad need tax revenue. They're not going to get it from sales taxes because lets face it, minimum wage people don't spend enough. The best place to get it is from property taxes. The best way to get more revenue from property taxes is a good 'ol real estate bubble which the bankers are happy to provide free money for. By goosing real estate valuations, the government gets more money. They also can say they "helped" the economy because of the fake wealth effect the speculators are experiencing while fixing none of the real fundamental problems.

Personally, the whole system is a sham designed to extract more wealth from hard working people. Home ownership is a good thing and the unrealistic valuations aren't going to last forever.

I also see this as part of the reason why we are having this immigrant problem in Europe and North America. White people as a demographic are shrinking thanks in part to social and governmental policies. Right now real estate is in a massive bubble, but who are the current landowners going to pass on their over priced properties to if there's no population demand for housing? Enter illegal immigrants stage left. However, this short sighted policy will backfire as well because the immigrants coming in are trash and will be trash for a few generations. There isn't any wealth creation coming from these folks nor will they ever be able to afford that 1.6$ million dollar house or three bedroom in the city. They're banking on something to save their lofty home valuations but as far as I can tell there's nothing for the foreseeable future that will help them.

Personally, when it comes to low and mid density homes people should only be able to own two properties. This will be wildly unpopular with landlords, the government, and the banks but the way the system is right now it encourages home supplies to be limited. Why bother building new homes if it means my current property value will decline in value?

Post: #14

I could swear the majority here has been pro rent don't buy since I came here. My mortgage is half of what my rent here would be now.

I think the G started this hype along with not having a car.

Post: #15

(01-12-2016 08:43 AM)el mechanico Wrote:  I could swear the majority here has been pro rent don't buy since I came here. My mortgage is half of what my rent here would be now.

I think the G started this hype along with not having a car.

I agree, I used to be pro-rent pre 2008 when the real estate bubble was still there and people were buying ridiculously overprices homes on bad credit.

Today, its the opposite. The mortgage barriers to home ownership are quite high (insane levels of documentation required, plus no credit belmishes, plus bullshit mortgage insurance premiums if you don't have 20% downpayment). That barrier to mortgages pushes more people into the rental market and fewer into the home buyers market.

I'm paying about 2/3 what rent would be on my house, including property taxes. If I look at pre-2008 prices I would be right about even with renting.

However, renting still always gives that 'I don't give a fuck' advantage that you don't have with owning, especially if you have renters insurance you almost hope that your apartment catches fire.

Post: #16

(01-12-2016 01:31 AM)lavidaloca Wrote:  

(01-12-2016 12:55 AM)Disco_Volante Wrote:  If you have a job that pays you a lot of money, you won't have time to travel anyways. Higher earners generally work brutal hours.

This is true for "Employees" not necessarily "Employers."

I think the bigger issue is housing pricing reflects the modern 2 income family. It leaves single people in the dust.

To some level it likely forces many people to live with their partner / wife / girlfriend whether they are ready to / want to.

The problem is the supply of cheap accomodation has been built for a time when everyone got married, but now everyone are single which means essentially double demand, not just for housing but for everything else.

Post: #17

Symptom or cause?

Post: #18

Heh, I love hearing people complain about rents - try on a 400sqft studio in the lower east bay side of the SF Bay area - not exactly desirable starting for 2700.00/month(plus utilities and parking) - this is a recent construction building with amenities - almost entry level if you ask me. Even if you earn around 6 digits thats more than half of your take home. Yet people continue to relocate to the SF Bay Area. Fortunately I've been here a while and can deal with this crap financially.

Frankly just get me the fuck outta here...I have a bugout plan.

Post: #19

You could just vote with your feet...

Figure out how to make a $1,000 a month online. (And if you can't do that - you're a moron).

Get a nice $150 a month serviced-apartment in a place like Chiang Mai.

Drink beer lao, eat 1$ street food, and bang Asian honies.

There are worse ways to live...

Post: #20

(01-12-2016 10:46 AM)Uncircumcised Coke Can Wrote:  You could just vote with your feet...

Figure out how to make a $1,000 a month online. (And if you can't do that - you're a moron).

Get a nice $150 a month serviced-apartment in a place like Chiang Mai.

Drink beer lao, eat 1$ street food, and bang Asian honies.

There are worse ways to live...

Post: #21

^Haha. That's a good one.

And my squeeze page is right here:

No, I realize it's a notion that's been almost caricatured by now. But still - it beats the hell out of the lifestyle corporate chumps live. Whenever I visit America, I'm appalled at just how bad the average guy has it. Even those with a lot going for them...

There's little merit to making 6 figures - or having a high-profile career - if your income is being eaten a way on rent and high COL.

Post: #22

Pretty much any coastal city needs to replace low density housing with high density housing. Every city would look like Paris.

All the jobs that can be done remotely should be done that way. I'd take 15-20% pay cut and move to someplace less dense.

I could buy a decent house for what I pay in rent.

And how much better would family life be if a man "farmed" his own field and his woman kept house, instead of needing a second income to pay for low educated woman to mind their young children.

WIA

Post: #23

(01-12-2016 10:46 AM)Uncircumcised Coke Can Wrote:  Figure out how to make a $1,000 a month online. (And if you can't do that - you're a moron).

Enlighten us.
Walk the talk and drop a datasheet, or write an article for ROK to reach a wider audience.
Your fellow men would surely appreciate that.

Post: #24

(01-12-2016 11:13 AM)Celtic_Austrian Wrote:  

(01-12-2016 10:46 AM)Uncircumcised Coke Can Wrote:  Figure out how to make a $1,000 a month online. (And if you can't do that - you're a moron).

Enlighten us.
Walk the talk and drop a datasheet, or write an article for ROK to reach a wider audience.
Your fellow men would surely appreciate that.

I'd also be curious to read said datashe....erhm newsletter

Guess i'm a moron because i haven't figured it out yet. Not to mention, I enjoy the corporate life.

Post: #25

(01-12-2016 11:13 AM)Celtic_Austrian Wrote:  

(01-12-2016 10:46 AM)Uncircumcised Coke Can Wrote:  Figure out how to make a $1,000 a month online. (And if you can't do that - you're a moron).

Enlighten us.
Walk the talk and drop a datasheet, or write an article for ROK to reach a wider audience.
Your fellow men would surely appreciate that.

A writer...I am not.

But there are dozens of different ways to make a living online.

I'd say starting out - you'll want to begin with some sort of service. (Less startup capital needed).

And instead of battling it out with other online marketers, go after your local markets. Brick n' mortar business in your area.

Use online marketing to make them more money.

What do do they want?

-A better website
-SEO
-PPC advertising
-Graphic design
-etc...

Give them what they want - and you'll make money.