High Rental Market and what to do about it.

[2rocky]

So the Local paper came out with an article about how much per hour a person would have to earn to afford to rent a 2 bedroom apartment or home in the various zipcodes in our local area. As expected around my area, it ranges from $30-60 per hour to be able to afford a place to live.

To answer these questions, we’ve compiled data from the National Low Income Housing Coalition’s annual “Out of Reach” report, which examines the cost of housing and hourly wages across the nation.

The report uses fair market rent, which are estimates determined by the U.S. Department of Housing and Urban Development, to determine how much rent costs in each ZIP code. “Out of Reach” then uses those rents to determine how much workers need to earn per hour to pay for rent without spending more than 30% of their total income.

Here, we’ve looked at fair market rents for two-bedroom rental units, and how much full-time workers would need to earn hourly to cover the cost. Data was not available for a few ZIP codes in the county, such as 95433.

To view the report or search rental housing costs by ZIP code, visit reports.nlihc.org/oor.

I'd like to talk about ways to work around that, and overcome high rent cost, while staying in the area.

Right off the bat I can say:

1. get roommates
2. work side jobs in addition to regular job
3. rent a room.

What other inventive ways have people created a sustainable way of having a home base to stay in?

The main point here being young people who want to be independent and perhaps save for a home of their own. I know a lot of us live in high cost areas and we want our kids to be able to spread their wings and not be living at home forever.

 

[LCH]

I'm not really in a high cost area, but my wife and I bought a used house trailer for 12,500 when we were younger. Lived there for 3 years, then sold it for 12,500. Lot rent was $50/month on the edge of a hayfield that some of her relatives owned.

This may not be a realistic option in a lot of urban areas, but could be in a lot of the country, especially if you can drive an hour or so to/from work or school.

 

[TOGIE]

gotta have roommates.

but numero uno is to just freaking stop spending money on so much useless crap

also don't rent a two bedroom if you don't have roommates

 

[flatcoat]

I work (unpaid) for the local housing authority. We're a resort town in a (the?) state that has banned regulations on short term rentals. 1/3 of Aspen's inventory for rent or sale is 'Afforedeable' sustaining businesses large and small with employees. It's made possible by a real estate transfer tax. A lot of mountain towns add a "Transient Occupancy Tax" onto STR's of 10%ish. This money then goes into housing for local employees. Tourists don't bat an eye and property owners just build it into their pricing structure. There's only so much employees, or those on fixed incomes, can do when wages are stagnant and housing costs/property taxes are increasing exponentially in such a short period. I'm not a frivilous tax person but these 2 are proven effective and in providing affordeable housing options in places where there traditionally isn't. Pressure your local electeds to prioritize affordeable housing because right now the free market isn't. If not you'll see all manner of small businesses and local governments struggle to function because they can't afford to pay the 30-60$/hour for employees to exist.

 

[Elkmagnet]

Look at your chosen careers income to the cost of living in different areas and move. It sucks but it is what it is.
Local Rent has gotten to the point that we no longer have employees available for fast food and convince stores. I am seeing ff and convince stores close at night and on weekends because they can't find people to fill shifts regardless of compensation offered. 16hr plus 500 signing bonus to work at McDonald's.

 

[DouglasR]

Nammatj 2 • 2 person tent • Hilleberg

The single vestibule, 2-person, all-season Nammatj 2 tent is a superb choice anytime great strength and reliability at a remarkably low weight is needed.

hilleberg.com

 

[mevertsen]

I am not sure the exact zip code, but I have seen multiple ads in the Reno area during the evening news.

Amazon warehouse, multiple others. I have not seen one place offering more than $20 per hour. Most were 15 to 18.

A quick 1 bedroom search for Reno reveals $1200 minimum to $2300 for a 1 bedroom.

So basically, a single person who is moving out on their own, and is on an entry level job (possibly even with a college education), can't technically afford to rent in the town they work.

Not sure how to fix the problem, but even in this scenario, roommate and rent a room are out.

I have been with the same organization since 2004. Started at $12 per hour, and rent was $350 a month for a crappy trailer. Now I am at a little over $30 with a family, 1200 Sq ft house and my mortgage is $996. No way in hell I could afford a 3 bedroom anywhere else on $30 an hour. Luckily the market here is very odd and cost of living low.

 

[HighDesertSage]

As much as it sucks, you don't get a pass on math regardless of where you live. If your going to spend more than 25-30% of your take home pay on housing, you will struggle. I faced this last year, and had to relocate. As much as I miss my mountains, the financial freedom I have is awesome.

I really feel for the younger generations though. I got a cousin and brother who are in their late 20's and everytime we talk I can hear the frustration in their voice. One's a firefighter in the phoenix metro, the other a welder in Reno. Home ownership for them is not even a reality anymore. Rent without roommates isn't even sustainable. Furthermore, how in the hell are they supposed to save for a down payment on a home with costs so high? It really is a shitty situation.

2Rocky, to answer your question regarding creative ideas, what I tell them is they got to embrace the suck and do something out of the norm to get their cash flow up and, more importantly, their expenses down. If I was a single guy, I would scrape $5-10K together and buy a camper and try and rent a spot for it where I can get hookups. I would then save every penny I had and buy land within an hour of a metro where you can make good money. Then move the camper to the land and cash flow a build. It would probably take 5-10 years, but you'd end up with a place that's paid for, close to where you can make money.

 

[Nameless Range]

If I weren't so lucky to have built a home during the recession, or were not an individual with a family, this is some things I would explore:

-Live out of a camper. The Helena area in MT is filthy with folks doing this. I know folks who travel for work in the medical industry who do this, and they are making a killing and living comfortably enough.
-Buy land and live there, either by utilizing the option above or by buying a shed of some sort and retrofitting it to be survivable. Folks I know also doing this.
-Be willing to commute longer. If my wife and I were starting now, we would likely be looking 15-20 miles further away from the city in which we work to purchase or rent a home. It's certainly true that longer commutes seem to make for unhappier people,but nothing would make me less happy than giving someone ten thousand dollars a year in rent money.

I currently have two jobs, but would be highly hesitant to pick up extra work just to pay rent. In fact, I would be highly hesitant to rent period. If you are in a place in the west where rent is skyrocketing, assume it will continue to do so. Set yourself up for the future and buy land or a home, even if it is on the fringes of that which is undesirable right now, I bet it will be a solid investment. I do not believe this state of affairs will meaningfully recede.

This financial advice brought to you by someone you should not take financial advice from.

 

[MarvB]

I second the travel trailer route. In college my friends mostly stayed in the dorms or split houses. My tuition was going to be “self-funded” so I bought a 26’ Aljo trailer when I graduated high school, moved it to the town I was going to school… paid $3600 for the trailer and sold it five years later for $3000. $55/month for long-term RV parking back then

 

[Deleted member 28227]

Right off the bat I can say:

1. get roommates
2. work side jobs in addition to regular job
3. rent a room.

sustainable

Sustainable? None of those are sustainable. Sure for a couple a years… but like work 3 jobs, have two roommates… while married and having kids?

You serious Clark?

1. Move, Bozeman is ‘cool’ but there are a lot of other great places. There is beauty and great stuff to do outside all over the country.

2. Not really a solution but the income ratio between 24 year olds today 55 year olds is wildly different than 24 year olds and 55 year olds a generation ago. Any parent complaining about kids at home, how much does your company pay interns? Low level staff? Etc?

 

[RobG]

It's hard to have roommates when you are a family. You can't find a small place in Bozeman because everything being built is high end. Lots around here (Bozeman) are several hundred thousand dollars. Rents and housing costs would be lower if they would stop building only high end places.

From a landlord's perspective... get rid of the dog, credit score is important, when you visit don't smell like pot and dress professional like you are a responsible person.

 

[Carnage2011]

House hack. Buy a duplex, triplex, or four plex and live in one of the units and rent the others out. It’s easy and as an owner occupied there are different financing options. The tenants make your payments for you and you get the tax benefits and appreciation.

 

[belshawelk]

I have a rental that I rent for $1895. Going rent for a place like this is $2250-2400. Its a great house with big yard in fantastic neighborhood. The reason I charge less:

Great renter: Pays direct deposit always on 1st
Never nickels and dimes me on little maintenance stuff. Will try and fix herself first ( minor stuff)
since I am out of town owner she works with my landscaper or other subs I use.
the house looks exactly like it did when she moved in 2 years ago. Even pays to clean carpets herself ( didn't even know this). Paid for bug guy to come out and spray for seasonal bugs/ants.

its all about the type of renter you are. If you treat it like its your own property you'll get a better deal. My renter will live there as long as she wants without a rent increase other than any property tax increase I get.

 

[Pucky Freak]

There are lots of temporary solutions for the individual, but the best long-term solution may be to relocate. The house I grew up in just sold in July for 1.3m. I live in a different state now and I’ll own my home free and clear by age 40. If I stayed in Ritzville my mortgage would outlive me.

For the community’s perspective, I think public-private partnerships are worth exploring. For example, a city and a company jointly subsidize housing for an employee that agrees to set terms. This still doesn’t address low-paying service jobs, but in that case maybe the incentive to get out of a multiple-housemate scenario is to develop a higher-paying career.

 

[huntandfly]

I have a rental that I rent for $1895. Going rent for a place like this is $2250-2400. Its a great house with big yard in fantastic neighborhood. The reason I charge less:

Great renter: Pays direct deposit always on 1st
Never nickels and dimes me on little maintenance stuff. Will try and fix herself first ( minor stuff)
since I am out of town owner she works with my landscaper or other subs I use.
the house looks exactly like it did when she moved in 2 years ago. Even pays to clean carpets herself ( didn't even know this). Paid for bug guy to come out and spray for seasonal bugs/ants.

its all about the type of renter you are. If you treat it like its your own property you'll get a better deal. My renter will live there as long as she wants without a rent increase other than any property tax increase I get.

This is exactly how I operate. I am renting my first house to a member of my squadron who honestly might take better care of it than I did, and is never late with payment. I get 3-400 less a month than I probably could, but I have serious peace of mind and will be getting the house back in great shape. Quality tenants is one of the most, if not the most, important factors I think of as a new landlord

 

[Bob-WY]

Most of it is choices:
- Did you go to college or trade school? If not, you're starting from a rough spot
- If you went to college, what did you go for? Good choice here helps, poor choice: you're in a tough spot
- When you went to college, did you graduate with tons of debt?

Can your income afford where you want to live? Longer commute may lower that, but then you may be away from "fun".

Family: Family needs to be a calculated decision, simply put, can you afford it? Double income (or single), at $20/hour, you can't afford a kid, never mind 2,3,4 kids. So don't do it.

This is why there are so many boomerang kids these days. They partied up in college on a useless major, piling up debt, then are "shocked" when the useless college degree doesn't get them a $100K job right out the door.

Much of financial situation is the result of choices and hard work. It's rarely luck.

 

[The_Jim]

Most of it is choices:
- Did you go to college or trade school? If not, you're starting from a rough spot
- If you went to college, what did you go for? Good choice here helps, poor choice: you're in a tough spot
- When you went to college, did you graduate with tons of debt?

Can your income afford where you want to live? Longer commute may lower that, but then you may be away from "fun".

Family: Family needs to be a calculated decision, simply put, can you afford it? Double income (or single), at $20/hour, you can't afford a kid, never mind 2,3,4 kids. So don't do it.

This is why there are so many boomerang kids these days. They partied up in college on a useless major, piling up debt, then are "shocked" when the useless college degree doesn't get them a $100K job right out the door.

Much of financial situation is the result of choices and hard work. It's rarely luck.

That last line sums it up. Pay now play later or Play now pay later...

I live in a small Nebraska city. Is it exciting, not really. But, there are lots of good paying jobs here. I am only 37 and my house(its a nice house) is 100% paid for and I have had 0 debt. I work in the trades so i don't have an unusually high paying job, anyone can be debt free. I have been debt free since I was 30. When you have no debt you can do whatever you want. It is true freedom!

Think long term on your financial decisions!

 

[SAJ-99]

while married and having kids?

Married means instant roommate. Plus with the finances (if the spouse has a job), negative is they are ALWAYS there. If you are young and struggling paying for a place to live, PLEASE wait to have kids. Those little roommates are financial blackholes. Money goes in and never comes out.

It's a rough market. I feel for those just starting out.

 

[Deleted member 28227]

Married means instant roommate. Plus with the finances (if the spouse has a job), negative is they are ALWAYS there. If you are young and struggling paying for a place to live, PLEASE wait to have kids. Those little roommates are financial blackholes. Money goes in and never comes out.

It's a rough market. I feel for those just starting out.

There's a house in my mom's neighborhood that was built as one of those crazy rich people's lairs.

For a while like half the fire station rented it together. Another Bond criminal mastermind chateau has 2 different families living in it... 3 or 4 kids?

Mountains are weird.

Also funny descriptions aside, in Texas both houses would be like 700-800k (maybe) 5 bed 4 bath, in CO they are +1.8MM. All of the listing in that area under $600k are for dirt lots.

400k for a 1acre lot