People Arguing With Us About Renting Are Missing The Point

[00:00:04] You're listening to Casual Talk Radio, where common sense is still the norm. Whether you're a new or long-time listener, we appreciate you joining us today. Visit us at CasualTalkRadio.net. And now, here's your host, Leistor.

[00:00:20] I was going to talk about the big thing that people were worried or concerned or, you know, in some cases excited about. And that's former President Donald Trump and his parent, Victor, with the Supreme Court immunity for acts done in office, official acts.

[00:00:36] And I was going to talk about it and I figured I'm going to leave that to other people because it's clear that some people just can't have an open, unbiased conversation.

[00:00:49] No matter what you do, they're just fixated on what they're fixated on and it is what it is. So I thought, because I'm not going to share my thoughts on that business. I thought it was better for me to respond.

[00:01:04] I had a pretty spirited conversation with some people and it's obvious I'm dealing with younger folks and I have nothing wrong with that. I'm going to probably younger folks in general. It's just the vast majority of them don't get it.

[00:01:20] I went to the local store out here, a hardware store. I had to get a new lawnmower. Mind you, I have one in storage, but that one's kind of older and not that not good shape.

[00:01:33] And this one self propelled like it moves, you know, so I get that I get to the checkout just an absolute gorgeous thing. Gorgeous that her hair. Now, of course I've got my cut, my facial cut and everything. I look throwback. I do her hair was throwback.

[00:01:52] She has straight on Afro, but it was not, you know, poofed. So that was kind of like, but amazing lips, amazing body, amazing voice, amazing everything. It's an amazing quality. I'm talking speed, accuracy, positive, polite, well-warranting of a tip.

[00:02:10] Most of these young folks working at the hardware store or whatever retail are not going to get tips because that's just not normal. I tip if I see the quality of the service is good, you're polite, you're, you know how to count money because I pay in cash.

[00:02:26] And then of course you being sexy helps on top of this. So I go ahead and make the transaction. I come out, I come back and I have to let the darn thing charge, let it up charge. No problem.

[00:02:38] I get on and this is the spirit of conversation part. And I check on some updates I've done and it's about homes and home buying. I want to level set some people, young people.

[00:02:53] And I know statistically if you're new and you're young welcome, I'm not insulting you at all. I'm telling a story that I think some newer young people don't understand the way this all works. So I want to level set.

[00:03:05] And if you're not younger, you're going to hear me and you may have a different experience. I'd love to hear from you casual talk radio net. But here's the thing. I have been in a number of states now across the nation.

[00:03:19] And when I say Ben in, I'm referring to have either purchased a home have helped someone purchase a home or in some way have gone through the process of purchasing a home. In multiple states, I have multiple exposure now to this to this game because it's the game.

[00:03:41] So and by the way, when I say it's a game, I'm not saying that you should play with your money. That's not what I'm saying. I said on a prior episode of renting as a scam and I elaborated why I felt like renting is a scam.

[00:03:55] I still believe we're in a scam. I believe that the whole concept of renting is a scam. And I say that as somebody who would love to be a property owner, but I would not do property ownership the same way some of these people do it.

[00:04:07] I would do mine differently. There are some things that are statutory and I'd have to look into that. But generally speaking, I would not do what a lot of them do because I feel like it's a discriminatory. I feel like there's a slant away from certain races.

[00:04:21] I firmly believe that because I think what they're doing, especially in some of these states, I think what they're doing is designed to discriminate against lower income populations, lower income populations statistically do what they slant away from certain races. That's the bottom line.

[00:04:41] I think most of the Asian Japanese Chinese Korean among, I think they are largely insulated from what I'm describing. I think this mostly affects blacks, Hispanics, Americans. I don't know. I can't prove a direct correlation.

[00:05:04] I'm saying that I see a pattern in the kinds of things that they're going after that seem to do this slant. Some of the things I called out, right in the olden days, you run an application and let's say you have no credit. No credit.

[00:05:20] It was usually fine. You pay a deposit and it's good to go because no credit. If you had bad credit, they might still approve you, but they might want to like a co-signer. If you're young, that's not a problem.

[00:05:34] But that shifted and then it was, well, we just did a higher down payment deposit. Fine. I'm fine with that. Then it changed to there are places that literally will not take a co-signer. They'll just deny you. That's where I have a problem.

[00:05:51] I have a problem with this idea of denying people the ability to have a place to sleep because all that's doing. We talk about the fentanyl crises and other crises. The homelessness crisis in the United States is a joke because we're not a third world country.

[00:06:09] There are other factors to homelessness, you know, some that are veterans. There's drugs. There's all these other factors that play.

[00:06:18] But in some cases you just have, I told the story about the lady who tried to move back to her home state and she, you know, got scammed off Craigslist. Some people just had a bad situation and they don't make enough money to do something else.

[00:06:34] And so they're trying to get into something and they can't. So they're homeless for a period. I was close to that. I was close to this world of not having a place to stay for I was close right on the border of it.

[00:06:46] I haven't been recover, but at the time I was getting really dangerously close to being homeless. And I happen to get fortunate to sign a different client. But there are people out there that just had a rough situation.

[00:07:01] A lot of these property owners, they're doing everything in their power not to rent to people, which is not the way it should be. It should be that you should want more people in there. It should be that you're welcoming people in there.

[00:07:15] And some of that is correlated, in my opinion, to how easy it is to buy a home and how easy it is to stay in a home, which is correlated in some way to the rates in some way to programs, loan programs, let the government's putting out, including FHA and VA.

[00:07:35] So and the GI Bill. So when the inflation starts spiking and rates now they have to get inflation under control to do this, they raise rates. Rates for mortgages at one point you could get one for like 3%, 4%. I remember when I was about to buy one.

[00:07:57] This was decades ago. I was about by one and I'm pretty sure that rate was like a 3% rate. And now they're up to like near 7%. In some cases over 7% depends on if you get an arm loan or the type of loan that you're trying to get.

[00:08:11] But it shifts, it shifts, it shifts over time and over time and over time. And we get into this world now where it's easier. I didn't say that it's cheaper. I'm talking about it's easier to purchase a home.

[00:08:26] The ease of purchasing a home has to do with availability of programs. This is what's lacking on the renting side. You really don't have very many outlets.

[00:08:35] You're at the whims of that property manager and unless you want to rent in a low safety area, high crime areas, you're going to get nailed, guaranteed on whatever.

[00:08:50] If it's a high crime area and they're desperate, then all of a sudden they're opening the books and they're willing to be more flexible to get you in there.

[00:08:58] But now you're dealing with crime situation, possibly drug situations or other unsafe conditions that the government doesn't want to do anything about. We also started to see the rise of this nonsense called pet rent and all these other fees that they tack on.

[00:09:12] We saw that at one point rents would go up like maybe 50 bucks a month or 25 bucks a month. It was a reasonable increase. Now we're starting to see increases like $200 a month and we're not seeing equitable increases by tenant.

[00:09:27] Like sometimes you'll see a tenant and say they are a white American. They'll get an increase and maybe it's like 25 bucks a month. You have somebody who's Hispanic and they'll get an increase that's like 100 some odd dollars a month. It's obvious what's happening.

[00:09:42] They're trying to get certain people out. Well, what's the correlation if we see that that is clearly race separated? It can only be one thing. It can only be that they have an interest in getting those people out.

[00:09:58] They're trying to force them out by way of the increases and then they post up that same unit online for dirt cheaper than what they were just increasing on this other person. So that means that it wasn't costing them money.

[00:10:12] That's all Pad Profit that they're making off of it. How is that not disproportionate against those, let's say lower income folks or certain races? It is the government allows that though, because there's no regulation except in that I can recall.

[00:10:27] California has it to some degree, but it's not really useful. I think Texas has it to a limited degree. There should be a known calculation as to the increase in rent. Some states will say you can't increase over this threshold. That's not what we're talking about.

[00:10:42] It should be there if you're going to increase the rent. Everybody's rent must increase proportionate to everybody else. Obviously the size of the unit has to play a factor.

[00:10:51] I'm saying that if you have two different people and they're both in a two bedroom unit, you cannot increase one by 50 bucks and another by $200. That should be outlawed. It's not so because of this disproportion.

[00:11:05] And if you remember the pandemic, people were getting kicked out of their homes like crazy even though it's a pandemic. You think about how heartless that is.

[00:11:12] You think about how the government, what they did to try to mitigate it was try to force the states to provide money that the tenant had to apply for. Basically you have to beg for money to keep a place to keep a room over your head.

[00:11:27] That's what it was instead of what it should have been, which is we're going to give you money. You are not allowed to evict them. We're going to pay for your tenants on their behalf for the duration. You can't raise the rent. You can't evict them.

[00:11:44] You have to extend their existing lease until we pass the pandemic and we'll just pay you directly. The tenant doesn't have to beg for that almost cost. They don't have to beg for it. We're just going to pay you directly.

[00:11:55] Some don't like that because, well, how do we know that they're working? Does it matter if it's a pandemic because the way the government presented it is that it didn't matter. They sent the money out anyway and the vast majority of it went unspent.

[00:12:07] So then they shipped it overseas. If they sent it to a specific source, and it didn't matter, it simply go to benefit the people who really needed it instead of having to beg for it.

[00:12:16] And then there was no known campaign to get them get the word out on that stuff. They just basically did an in run. That's what happened. All of which is to say everything is against you when you rent. That's the truth of the matter.

[00:12:30] I'm not suggesting that renting is not suitable for certain people. everything is against you when you rent because that's the way the system is slanted contrast that to purchasing a home. And this is where the argument spirited conversation came into play.

[00:12:45] I've been exposed to, at this point, California, Washington state, Texas, Florida, Arizona, Minnesota, Michigan, New York, Philadelphia, Massachusetts, Connecticut and three other ones that I won't name. But the point is I've been exposed to multiple states and I've seen the same pattern.

[00:13:04] And with the possible exception of I'll say Oregon, it's been a nightmare in each and every one of them, especially California and Nevada. I rented a unit down in California. This was back in 2011, 2010. I rented this unit for $1,600 a month.

[00:13:21] Right now that unit is going for just shy of $3,000 a month. Okay. So just to put it in perspective, it's the same unit. They've not improved it. They've not increased it. It doesn't have any additional. There's nothing additional to it. They've just spiked it because they can.

[00:13:38] The argument was that it's still cheaper to rent versus buy. Now, in certain areas, in certain limited areas, this might be true. And I think some people are speculating that the value holds that we're about to hit another bubble, right?

[00:13:55] And that the housing market is going to crash and that the value and price are going to go down. I speculate the opposite. I speculate that we're going to waiver for at least five or years.

[00:14:06] When I say waiver, I mean, it's going to be a little bit up, a little bit down, a little bit up, a little bit down because first of all, we have to get the current president out of office.

[00:14:15] Once we get the current president out of office and replace him with whoever we replace him with, if that replacement is focused on the economy, the prices of homes is going to go up. There's a strong probability we're going to replace the current

[00:14:28] president, given his performance on the debate stage. By the way, the debate that he called for where he put out a video saying he was ready for it and he was going to do all that stuff and then performs like that. He's not looking good.

[00:14:41] So people are motivated to get him out of office, getting him out of office is going to spike the economy regardless of who like, it doesn't even matter at this point, who you replace him with. Just replacing him is going to spike the economy.

[00:14:53] Now after he's replaced, now it's going to start depending on who he's replaced with. Certain people are focused on the economy and certain people are not. I can tell you if Gavin Newsom is that candidate, he's not going to win

[00:15:07] because California's way of doing things is not the way you have to do it nationwide. So that's number one. But let's say that it's Donald Trump. Let's say that he pulls off the miracle. He'll be there. He's making history every time he turned around.

[00:15:20] He's done this president's immunity thing, the first president to be impeached twice, the first president to be impeached twice and then run again for a second term. The first president to school his opponent, despite being impeached, despite having all these trials like he's making history, history,

[00:15:36] history, history, he will go down in history as the one person who made more history than anybody else in history. That's what Donald Trump is right now. And that's the only thing he's running off of is the fact

[00:15:46] he keeps beating the system over and over again because he has the money to do it. It was all about a money game. Let's say he gets in office. He's going to focus on the economy because he knows it benefits him too.

[00:15:57] If he focus on the economy, your home prices are going to spike. They're going to go up. Taxes are going to go down. If taxes go down, you're going to see a correlation. You're going to see that the rent side, they're going to go up.

[00:16:11] Does that make sense? No, because their taxes are going down. They're maximizing profit to recoup what they lost during the pandemic on the back end. On the housing side, taxes going down benefits homeowners, and that is going to be realized when you see the prices

[00:16:27] and the values of the homes in certain areas. Now, that doesn't apply to every area. It depends on the area. In some cases, areas are losing people. There's strong outflows of people from these areas. They are going to suffer regardless of what changes during the political spectrum.

[00:16:43] But in the vast majority of locations, it is cheaper. And I'm just talking raw numbers. It is cheaper to rent versus buy for one simple reason. And that is the rent side. They can charge whatever they want.

[00:16:56] There may be rent control up to a cap, but they can still discriminate against you in terms of how much they increase the rent. They can still discriminate against you in terms of getting you in there. They can still discriminate against you in terms of kicking you out.

[00:17:09] If they don't pay their tax bill, you can get evicted. If they sell the property, you can get evicted. Yes, some states have noticed requirement. It doesn't really matter. I ran everything. OK, the place I was renting was charging me just over $1,700 a month.

[00:17:24] My rent has averaged largely about $1,600 a month. And I want to span back since 2009 ish has averaged about, you know, 15, $1,600 a month. It is average. This has been a little bit higher, a little bit lower, not much lower.

[00:17:45] Back when I was in, you know, Escondido, it was $800 a month. Just shy $800 a month. That was the lowest I've ever paid in rent outside of the house, the room that I rented with the middle class family. And that was $500 a month. That was a nightmare.

[00:17:59] So I already knew the lower my rent is, the more of a nightmare it's going to be and the higher the rent is, the more of a comfort it's going to be, with the exception of Nevada, which was a nightmare no matter what.

[00:18:10] But I went from a place that was renting just over $1,700 a month and I have a different story I'll tell next week about that fiasco. This is why I hate Nevada, but a little bit over $1,700. The place I bought, OK, and this was higher, mind you,

[00:18:27] than what I initially budgeted for. I could still afford it easy, but it was higher than what I wanted to spend because I had to learn the area. Right now, my mortgage is just shy of $1,800 a month. So I go from like 1750 ish.

[00:18:42] I'm rounding ish 1750 a month to about $1,800 a month buying compared to renting. And yet people swear that it's more expensive to buy versus rent. Do you know why? Because well, the home repair, home repair. And I talked about sweat equity and I may elaborate on a future episode.

[00:19:02] If you do sweat equity, that cost is not substantial. If you buy a home that has good bones as the term goes, it's not a significant cost. Every home will have work that you want to do because you want to make it yours. That's not a downside.

[00:19:17] It's an investment. It is a forced savings in a sense. And you're investing in yourself and essentially paying yourself back because you're the one that took the loan out. Yes, you're paying the bank, but it's a loan for your own benefit because the home is essentially yours.

[00:19:32] So when you're renting, you're paying somebody else. You're lining somebody else's pockets. If you're fine doing that, that's not a bad thing. I'm just talking about the raw numbers of a thing straight over as the raw numbers.

[00:19:44] Yes, you do spend money fixing a home, but month to month in terms of a mortgage versus your rent. It's it's almost a wash if you're in the median for the home prices. Once you start going higher in the homes, obviously that's not even close

[00:20:02] because people are focused on the rate. Well, the rate mostly hits you the higher the home price. So yes, if you're shopping in the 500,000 plus range, there's no way you're going to get a mortgage that's anywhere close to the rent price, obviously.

[00:20:16] But why are you going in the $500,000 range? Now, maybe you have a large enough family that you have to do that. I can tell you I've now shopped in all the states I listed

[00:20:26] and you can easily find I owned a five bedroom, two and a half bath house out in Washington state. OK, and the mortgage now at that time I was stupid and I did an FHA loan when I shouldn't have.

[00:20:39] And I didn't and that forced escrow and it forced mortgage insurance. So my mortgage was twenty two hundred dollars. However, the town home that I was renting just prior to it, which caused me to do the purchase, was trying to raise the rent

[00:20:53] from 15 25 up to two thousand dollars anyway. So it still was a wash. My point is that it's easy to find if it just needs size of the home. It's easy to find large homes that aren't that crazy expensive. That one was 250 grand negotiated for 250 grand by bedroom.

[00:21:14] It sits at two twenty six thirty square feet sitting on nine thousand square feet of land, so there's no real excuse if people choose to shop there. And the reason that they do is because they're trying to minimize

[00:21:27] sweat equity, they're trying to find something that's already a quote perfect home, despite the fact that there is no such a thing. You're always going to have things that you got to fix, things you want to upgrade, things you need to improve, appliances that go out.

[00:21:40] Normal landscaping costs, you're always going to have it when you rent. All of that's passed back to you. Shared utilities pass back to you. Pet rents and pet deposits. And when you move out, you get nailed. It's just that you don't realize that expense up front.

[00:21:57] They do it in a very sneaky way. You're not saving significant amounts of money unless you're buying an absolute fixer of a home. If you're buying a fixer of a home, you knew what you were up against. I'm not suggesting that there aren't certain areas

[00:22:10] because I've seen to myself when I was home searching down in San Diego. And I'm seeing homes for 300,000. I was about to buy one. There was a home that was out in Vista, believe it was Vista, two hundred fifty thousand dollars, but it was an absolute fixer.

[00:22:25] It was a nightmare looking inside nightmare looking outside. And I knew I would have to invest at least unpermitted back at least fifty thousand bucks to get it just to be livable.

[00:22:36] And it's two fifty grand, but I had that as a choice or continue renting at the time. Financially, it may better sense to continue renting despite the fact the rates were lower because it wasn't just about the rates.

[00:22:49] It's about the straight over monthly and how much am I getting nailed for basic things when I rented in Carmel Mountain? My rent was sixteen hundred dollars or whatever it was, BRE properties. Sixteen hundred dollars. But you had all sorts of pest issues.

[00:23:07] The kitchen stuff didn't have work. The air conditioner was loud as all get out when it really shouldn't have done. There was insulation problems. There was traffic, another consideracy. People don't realize there's all these other things that are costs. They just simply are not immediately present costs.

[00:23:26] There are costs still around renting. You can't control a lot of what that's doing. Garages, some people devalue garages. I value garages higher because it goes to security of my vehicles. Plural. I value having access to what I need, where I need it.

[00:23:44] So I'm talking shopping and that's the current problem where I'm at. I get a sense that the area is trying to improve, which is why I said, let's pull the trigger. But all of these things were things I lacked when I rented.

[00:23:57] Now that my experience is not exclusive to me. I guarantee you there's people out there that have the same experience. I'd love to hear from you, by the way, Casual, talk about radio.net. Contact form. Bottom line in the majority of areas, it's going to be cheaper.

[00:24:13] I'm talking in a median price range, not in the high end. Talking to median price range for your area. It's going to be cheaper for you to buy versus rent if you have the capacity to do so. It's going to be long term beneficial to you

[00:24:28] to generate wealth by way of owning a home and paying it off. And your credit will thank you for it, because remember, most rent payments do not contribute to your credit score at all. They can do the rent track and all that garbage. It doesn't really benefit you.

[00:24:43] It's garbage compared to having a mortgage. Diversity of credit on your credit report benefits you more. So if you're just sitting renting for year over year over year, you're not benefiting from having the mortgage, which means your credit score is not going to go past the glass ceiling.

[00:24:56] If you didn't know that I worked at the credit bureau. I'm telling you the inside scoop. The system assumes it's built to assume you're going to have auto loans and personal loans and credit cards and mortgages in a blend of all this.

[00:25:10] And you're perfectly paying everything off without missing a payment. And you never apply for new credit. Everything is just offered to you and you accept it. You don't apply for it because that implies that you need money.

[00:25:21] As in the system assumes you don't need the money and it's just thrown at you. Well, that's not anybody's reality, is it? Even me, that's not a reality for me. I have to burn midnight oil for mine.

[00:25:35] And then I get mine and then I go out and I work. I hustle, I bust my tail because that's what I've got to do because it's the only way to make things work. So. Point, simple point.

[00:25:47] I'm not discouraging anybody from renting that needs to do it or prefers to do it. There was a time that I might have preferred to rent versus buy. I had to learn how the system is slanted against people to do that. The credit system slanted against you.

[00:26:03] Most of the benefits are going to homeowners, tax benefits go to homeowners. Everything is slanted in certain directions that for me, in my opinion, make it make better sense to consider buying over renting depending on the area. And if you do consider buying in the median range

[00:26:24] and you'll likely find that it's cheaper to do that than renting just on the straight over numbers that is a negate sweat equity. Sweat equity always be a thing, but there's nothing wrong with sweat equity. It keeps you in shape. It keeps you healthy, right?

[00:26:38] Because you're active instead of sitting around. You don't want to sit around. You would actually be working out and staying healthy and staying mobile. So I found it ironic to hear people swear up and down that it's way cheaper

[00:26:51] to rent is not they're only looking at one facet. They're not looking at all the other tertiary costs that apply for renting. And they do apply just like they apply for home ownership. I just argue the rent is much less in control than a mortgage,

[00:27:08] assuming you didn't get an arm, a RM. If you get a conventional loan, I'm sorry, it's not even close. Perhaps someday I'll tell the story about the FHA and why I don't agree with the FHA. Unless you have to do it, right? I don't support the FHA loan.

[00:27:23] Maybe I'll tell the story about that experience because I think that's a little bit humorous. But if you have stories, share them. CasualTalkRadio.net hit the contact form. Let me know what you think.

[00:27:31] If I'm off rocker in your area, because it's area specific and from what I can tell, I've been in a lot of states. I've not seen any difference in my opinion sold to me other than, you know, you just have to make it work for what you're doing.