What of the renters with the storms to come?

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isaaclewis's picture
isaaclewis
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Posts: 4
What of the renters with the storms to come?

Hello,

I am new to the sight and grateful to Chris and the team he has put together, along with the many visitors and contributors to the information and resources available. Thank you.

I feel numb after watching the crash course and number after reading the first 10 chapters of the book.

I am a teacher in the private school sector and seriously doubt anyone will be sending their child to school the day the three Es make their presence immanent. I currently rent with my wife and beautiful children and before I  ask a thousand more questions and seek out those answers, what do you think will happen to renters in the US ( I live in California, Contra Costa County)? I have a hunch that after the shake down of the global markets and who knows what kind of currency surfaces in the US, outside investors will snatch up most properties, seeing many owners will be attempting to liquidate their properties out of necessity. Am I on the right track or what are the other scenarios for renters? What would you do?

 

Sincerely,

Isaac

Poet's picture
Poet
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Joined: Jan 21 2009
Posts: 1892
Renters May Still Be At An Advantage
isaaclewis wrote:

I am a teacher in the private school sector and seriously doubt anyone will be sending their child to school the day the three Es make their presence immanent. I currently rent with my wife and beautiful children and before I  ask a thousand more questions and seek out those answers, what do you think will happen to renters in the US ( I live in California, Contra Costa County)? I have a hunch that after the shake down of the global markets and who knows what kind of currency surfaces in the US, outside investors will snatch up most properties, seeing many owners will be attempting to liquidate their properties out of necessity. Am I on the right track or what are the other scenarios for renters? What would you do?

Isaac

Welcome to the community! I would suggest, while the memory may still be fresh in your head, taking some time to fill out our informal survey:
http://www.peakprosperity.com/forum/how-did-you-find-out-about-crash-cou...

That said, I am a suburban renter in Southern California. At this time, I believe real estate prices are still too high. If bubbles crash, typically back down below where they took off, then there is still quite a ways to go. If there were to be a collapse - whether hyperinflationary or deflationary, it is likely that property prices may drop even as rent prices drop as well. Even now, a two-bedroom apartment in my area costs as much or less in rent as the mortagge+insurance+HOA fees on a one-bedroom condo.

I believe the logic is that owners can only charge what renters can afford, not what they need to recoup expenses (even during the bubble, owners were charging less than the cost of their mortgages). While there may be more demand for rental units due to foreclosures, that is also offset by household consolidations - moving back in with family, moving in with friends, etc. - indeed, something like 1 to 2 million households have disappeared since 2007, and there's still room for more.

Poet

Johnny Oxygen's picture
Johnny Oxygen
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Posts: 1443
Re: What of the renters with the storms to come?

Hi isaaclewis

Welcome to CM.

I am a renter also. Let me throw my two cents in.

Right now the average household spends 42% of their income on housing. During the great depression they spent 4% on housing.

The reasons why? As the economy got worse people tended to group together in one place. Aunts, uncles, grandparents, children, etc. This allowed each person to share in what the group could produce and survival was easier. It also freed up a tremendous amount of real estate so prices dropped drastically.

This time around I would suspect with less people living on farms and more people living in cities and more housing than ever that the same thing is sure to happen again.

I think we will pay much less for rent but times will be hard and working in groups will be the norm if not a necessity.

 

 

isaaclewis's picture
isaaclewis
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Posts: 4
Renters

Thanks Poet. It is nice to know that you are not to far away. It makes sense that there will be a unique collaborative effort of many to reside together. As it stands right now, my mother lives with us and it has been wonderful. I will continue to go through the steps and look at community in depth and see if it makes sense to think of renting somewhere else, namely where there are some advantageous resources touted by contributors and Chris when considering residence. Thanks again.

isaaclewis's picture
isaaclewis
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Posts: 4
Renters

Thank you Johnny. I wrote back and you can view my thoughts. I really appreciate the 2 cents. It makes sense.

 

Isaac

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avocadotoast
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Posts: 5
Renters

Hi Johnny:

How will these renting groups form? 

What if you don't have any family?

What kind of living situations working within groups are you speaking of? What does that mean?

Avocado :)

 

Johnny Oxygen's picture
Johnny Oxygen
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Posts: 1443
avocadotoast wrote:Hi
avocadotoast wrote:

Hi Johnny:

How will these renting groups form? 

What if you don't have any family?

What kind of living situations working within groups are you speaking of? What does that mean?

Avocado :)

 

Its organic.

I'm simply saying that rent prices will drop because people will do what they have to in order to survive. So maybe people in their 20's move back home and grandma and grandpa also move in with their kids.

I wasn't speaking of an organized 'renters group' although I'm sure those will come into being if they are not all ready here.

Speaking for myself I sold the house I owned in 2005 because I knew the market was going soft. I made my money back plus some. Then I started renting for $1200 a month. Then as things got worse I found a small house for rent for $700 a month which is where I am now. As renting opportunities make themselves available I will continue to move and step down in price. Its a pain but its all about survival.

DRHolden's picture
DRHolden
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Joined: Oct 18 2009
Posts: 131
I don't picture rents coming

I don't picture rents coming down all too quickly, and in fact for a while they will probably continue to climb.  There will be more and more people looking for cheap rents, and that alone will drive the price up.  In order for there to be rentals there must be owners.  If owners can't afford to own and rent, the dynamic will change.  Unfortuantely I think people will always have to pay a price to live in a safe neighborhood.  I don't know what the price will be.  There will probably be more Ghetto type areas where you can live cheaply, but not safely, but if you have nothing to lose, then safety is not as big of a concern.

Johnny Oxygen's picture
Johnny Oxygen
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Posts: 1443
DRHolden wrote: I don't
DRHolden wrote:

I don't picture rents coming down all too quickly, and in fact for a while they will probably continue to climb.  There will be more and more people looking for cheap rents, and that alone will drive the price up.  In order for there to be rentals there must be owners.  If owners can't afford to own and rent, the dynamic will change.  Unfortuantely I think people will always have to pay a price to live in a safe neighborhood.  I don't know what the price will be.  There will probably be more Ghetto type areas where you can live cheaply, but not safely, but if you have nothing to lose, then safety is not as big of a concern.

There will be a certain dynamic to it.

Those that 'own' houses via a mortgages can't lower their monthly payments which means they can't drop rent prices if the are renting out the place they own as an 'investment property' (SmileRemember those days). Thats the first barrier that has to break.

As the economy gets worse more people will move out of the places that are too expensive to rent because they have to. That leaves the renter in a pickle. If he can't find another renter, and soon, then he doesn't have a lot of choices. He can dig into savings, take out a second mortgage, rent at lower cost and pay the diiference, etc. But in the end you can't do that forever.

Eventually many will just walk away from the mortgage and focus on their own survival. Now that the bank owns it and there are no buyers, even at low prices, because banks aren't lending and there is a huge surplus then real estate prices will drop.

There will be more and more people looking for cheap rents, and that alone will drive the price up.

Not necessarily. There will be consolidation first. Like I said, relatives moving in together to survive. That doesn't involve find a cheap rental. If two kids move back home and the grandparent move in also then there are three owner/renters out of the market right there.

When you are broke and can't find a job you don't look for a cheap place to rent you look for a free place to live.

 

avocadotoast's picture
avocadotoast
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Joined: Jun 30 2011
Posts: 5
apartment life: a garden, clean water, stored food

I have a small deck where I planted herbs, a cucumber and tomato plant...we'll see. I am a novice gardener.

I have a single doulton candle filter on my tap and change it every 3 months.

Not much for storage space here; not sure how I would stack water jugs or extra food...but I purchased (4) 5 gallons of water and put them on the deck.

We currently pay 128 for a storage locker just to hold our Xmas stuff, Seasonal Clothing, Bikes, Paddleboard, and....Stuff.

I guess people could use storage lockers as a way to store food and water jugs. Right now our storage is over-packed with Stuff. Seems like a lot of money to be wasting on storing Stuff. Actually it seems really stupid the more I think about it.

Anybody living in a small apartment that are creating ways to be self-sufficient?

Hydroponic Gardening? Anybody go on THE LAND ride at Disney? Pretty cool set-up! Spray the roots, no soil...hmmm.

Johnny Oxygen's picture
Johnny Oxygen
Status: Diamond Member (Offline)
Joined: Sep 9 2009
Posts: 1443
avocadotoast wrote:I have a
avocadotoast wrote:

I have a small deck where I planted herbs, a cucumber and tomato plant...we'll see. I am a novice gardener.

I have a single doulton candle filter on my tap and change it every 3 months.

Not much for storage space here; not sure how I would stack water jugs or extra food...but I purchased (4) 5 gallons of water and put them on the deck.

We currently pay 128 for a storage locker just to hold our Xmas stuff, Seasonal Clothing, Bikes, Paddleboard, and....Stuff.

I guess people could use storage lockers as a way to store food and water jugs. Right now our storage is over-packed with Stuff. Seems like a lot of money to be wasting on storing Stuff. Actually it seems really stupid the more I think about it.

Anybody living in a small apartment that are creating ways to be self-sufficient?

Hydroponic Gardening? Anybody go on THE LAND ride at Disney? Pretty cool set-up! Spray the roots, no soil...hmmm.

You'll find there is a lot of information on this site about small scale gardening. Here is just one link:

http://www.peakprosperity.com/forum/square-foot-gardening/18771

I really encourage you to search this site. There is a huge wealth of information on nearly every topic. Go to the home page and look up in the top right corner and you will see a little white search box. Just type in what you are interested in and I'm sure you will find plenty of info.

Wendy S. Delmater's picture
Wendy S. Delmater
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Joined: Dec 13 2009
Posts: 1988
Not so free room and board

Johnny Oxygen said:

When you are broke and can't find a job you don't look for a cheap place to rent you look for a free place to live.

So true. My ex husband was supposed to leave his business to my eldest son. It was a construction firm (strike one), that worked for real estate companies doing "flips" (strike two), and then my ex got Parkinson's (strike three). My son was effectively unemployed in a bad unemployment area, and came to live with us when I was sick with the hip replacement. He's been a great help; still is. He's been couch surfing here for a year, and recently got a job. He has no plans to move out any time soon, and we are fine with that as he is really pulling his weight around our suburban homestead.

There is no problem since my son is a prepper and he works hard on everything we need muscle for. What I see as a huge problem is renters who want to move in with relatives and not contribute. I do not necessarily mean contribute money: for example my son helped us build our square-foot garden, finished our attic for us, helped make a bathroom leak-and-mold free, put in a chain-link fence, and splits firewood. I know of people who will just sit all day, playing computer games and/or watching TV. We have a couple of relatives that will not be welcome here if TSHTF, but most would be. They have useful skills and the right attitude. They'd be here on what I call "not so free room and board." You don't work? You don't eat.

Johnny Oxygen's picture
Johnny Oxygen
Status: Diamond Member (Offline)
Joined: Sep 9 2009
Posts: 1443
Re: Not so free room and board

Sounds like you raised a good man there.

I'm sure during the great depression (the one before this one) there were plenty of dead weight relatives. Probably some that were more trouble than they were worth. If my grandparents were still alive I'd ask them.

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