<p>This just came in from news:</p>
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<p>In the Bay area, renting is still better than buying. We are renting a house that is worth 1.4 million for less than $4000/mo</p>
<p>In HI, the only way you can get the low rents you cite in the article is if you are renting a subsidized housing unit. Our housing costs are about the highest in the nation. 
Both renting and buying is VErY high and causes many to live in multi-generational situations because it’s just too high to have a place of one’s own.</p>
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<p>The other thing about Texas is that property taxes can be crazy high.</p>
<p>I guess in HI it is small enough to commute to work. The buildable land must be scarece. But has the homes devaluated during this housing crisis?</p>
<p>This also means that potentially, it is attractive to invest in rental property. If buying is cheaper than renting, then you buy and rent the place out to renters. Been thinking about doing this, but haven’t gotten serious yet.</p>
<p>Most people think the equation is price + costs / rent. </p>
<p>That is a deceptively easy to understand equation that is also wrong.</p>
<p>“In the Bay area, renting is still better than buying. We are renting a house that is worth 1.4 million for less than $4000/mo”</p>
<p>That’s a good deal…</p>
<p>In Hawaii, distances are close but the traffic is truly gridlock in the worst sense. I had a sherriff once who told me he left the office about 4 or so to catch the EXPRESS bus back to him home as usual, which is maybe 25 or so miles from where he works downtown. At 8pm, he was still on the bus & his poor wife was wondering where he was, so she called him & he told her he was still in transit. There was no accident that day either. His case was NOT usual. We have no mass transit other than SOME bus service that as you can see is not very fast.</p>
<p>Another friend woke every morning at 4:30, to carry his kids into the car & drive them 25 miles or so to his MIL so they could sleep in the car, have breakfast & then go to their private school which stated at 7:30. If he left at a “regular time,” they would have just sat in traffic for hours.</p>
<p>I do everything in my power to schedule around traffic because I hate to sit waiting around–it makes me absolutely crazy. I do a lot of work out of my home and nearby places at least partly because I hate traffic–would rather leave 30+ minutes earlier & KNOW I’ll be at my destination on time or early than chance it. </p>
<p>Many of the areas of our state, real estate hasn’t seen much (if any) decline, including the neighborhood I & many friends & family live in–prices just keep getting further & further out of the reach of our kids & loved ones.</p>
<p>On the Big Island rents are not bad at all and prices are OK too. If I could handle living on an island we would think about going there to retire. But real jobs are scarce too.</p>
<p>Not all islands are the same either. I am OK living on Oahu, where I can get to most places I want within a shortish drive AND have decent medical care. On the outer islands, lots of the things that one MAY wish to do may involve a plane ride, including good medical care. There are very few specialists on the outer islands, which becomes an increasing problem if you have a chronic condition and also as we age, unfortunately. There are only a handful of pulmonary specialists to cover the five islands other than Oahu. Other specialities are similar.</p>
<p>^^^ The cost of housing, the medical piece and the traffic I’ve experienced in Honolulu are enough to dissuade me from considering Hawaii an ideal retirement spot.</p>
<p>^^^^ People in paradise don’t get sick and you suppose walk the beach, not drive on it…</p>
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<p>Percentage wise, the better neighborhood gets worse rent. We had the house in the best school district, therefore the rent is low for comparable priced home. For the same amount of money you can buy a muti-family building in crime ridden neighborhood and get around $12,000 in rent.</p>
<p>And enjoy trying to collect and do repairs etc. Also bad neigborhood = no appreciation unless it turns over (gentrifies) .</p>
<p>If you have cash on hand for a down payment why would you want to rent when you could build up equity on a mortgage even if you plan on moving in a few years?</p>
<p>Sent from my DROIDX using CC App</p>
<p>^^In a down market like we had experienced from 2007, your “equity” and “down payment” are all fizzled. That is why so many forclosures and short sales on the market.</p>
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<p>^^ I just put in some thing like $6000 in repair(we had to paint inside and out) and my next door neighbor just told me that her renter just skip town without letting her know and she had to hold 2 mo. without rent and the deposit just covered the repair. I told her she should not rent to some one who had pets…</p>
<p>No…your example of rent of 4,000 on a 1.4 million place is a good deal for the renter…</p>
<p>You misunderstood me.</p>
<p>I agreed with you.</p>
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<p>It may be less good than it seems. There’s a good chance that the property is only worth 900K. Although even there it may be a good deal compared to owning and having downside equity risk.</p>
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Assuming you are able to break even on price, and assuming you pay 6% commission when you sell…then on a 20% down deal you’ll lose 30% of your investment even if your house holds its value. </p>
<p>What’s happening with the rents is that people are showing the value of not having their capital tied up in housing where the party is not over, but still ending.</p>
<p>"Quote:
“In the Bay area, renting is still better than buying. We are renting a house that is worth 1.4 million for less than $4000/mo”</p>
<p>That’s a good deal…</p>
<p>It may be less good than it seems. There’s a good chance that the property is only worth 900K. Although even there it may be a good deal compared to owning and having
downside equity risk."</p>
<p>Huh?</p>
<p>If the house is worth 900,000…then it isn’t a 1.4 million dollar house.</p>