I recently rented a house in Great Neck, NY. Appraised value $1.5m, approx $17k tax - my rent is $5,000 per month. Not a particularly low rent, but a "steal" when compared to buying.
My margin of error is so large here that I don't give a sh!t if my landlord raises the rent 10% a year for the next 5 years, I am still better off renting. And I guarantee you, the rent won't increase 10% a year. Any increases in rent in recent years have been due to increases in maintenance plus horrid increases in property taxes which were passed on - to neither the benefit of landlord nor renter; however, in the scheme of things these variables still only account for ~15% or so of total rent.
The rent the landlord charges me as do MOST landlords here in NY is to cover his mortgage. However, when you have a number of people sitting on homes that have increased 100%+, rents can be low (compared to buying) and stay low for a long period of time since enough landlords are working off mortgages from the late 90's.
If housing values, fall, as they are already, then it's ludicrous to assume that rents will begin to increase. If anything, homeowners will demand reasssements on property tax and negotiate harder with contractors/laborers.
All in all a steal, especially because AMT makes 1/2 my itemized tax deductions worthless. |
