Just Renewed My Rental Contract

drewkawa_IHB

drewkawa_IHB

New member
Happy Sunday everyone,



The wife and I renewed our lease here in Irvine. We are in one of those "San... " Apartment Homes locations. I figured I would share how much we're paying/paid to add to the ongoing information of rental prices vs. home mortgage cost. I'm sure I paying more than some, perhaps I'm paying less than some but plese keep in mind I chose to put this extremely private information up for knowledge not ridicule. <em>(not trying to be a jerk, please understand.)</em>





<strong>Current location</strong>



<em>1 bedroom 1 bath + loft

870 sq. feet</em>



$1550 (2007 price)

$1580 (2008 price)

$1570 (2009 price)



<u>Rental Per Sq. Foot</u>: <strong>$1.80</strong>



<strong>Comparable Market Listing</strong>



365 Orange Blossom Unit: 140 Irvine, CA 92618



<em>1 bedrrom 1 bath + loft

814 sq. feet</em>



$189,900 (2009 price)



<u>Price Per Sq. Foot</u>: <strong> $233.29</strong>





Aloha,



Drew
 
Drew, have you checked out the new apartments in the IBC for comparison?



They've got some competitive deals for a brand new place w/ the amenities and also surpasses the bare minimums of apartment, like includes a washer and dryer.

Of the "market rate" they were taking $250 off, plus one month free, which after the "savings" could be equivalent to your rent. For me it would have been worth it, but some people don't like the hassle of a new security deposit and moving.



If I had only known about these places, it could've been leveraged during my rent negotiation... oh well. I'm stuck with a 2b/2bath "San ...." apartment with the bare minimum for the $16xx range, where I think it could've been to the $1500 range.



Thanks for sharing your info.
 
[quote author="Drew" date=1241398165]Happy Sunday everyone,



The wife and I renewed our lease here in Irvine. We are in one of those "San... " Apartment Homes locations. I figured I would share how much we're paying/paid to add to the ongoing information of rental prices vs. home mortgage cost. I'm sure I paying more than some, perhaps I'm paying less than some but plese keep in mind I chose to put this extremely private information up for knowledge not ridicule. <em>(not trying to be a jerk, please understand.)</em>





<strong>Current location</strong>



<em>1 bedroom 1 bath + loft

870 sq. feet</em>



$1550 (2007 price)

$1580 (2008 price)

$1570 (2009 price)



<u>Rental Per Sq. Foot</u>: <strong>$1.80</strong>



<strong>Comparable Market Listing</strong>



365 Orange Blossom Unit: 140 Irvine, CA 92618



<em>1 bedrrom 1 bath + loft

814 sq. feet</em>



$189,900 (2009 price)



<u>Price Per Sq. Foot</u>: <strong> $233.29</strong>





Aloha,



Drew</blockquote>
I'm sure you could have gotten a bit lower...the 1bed/1den here at Quail Meadows goes for $1,530-$1,540 per month for new tenants. But overall, you got a decent rental rate.
 
[quote author="Drew" date=1241398165] I'm sure I paying more than some, perhaps I'm paying less than some but plese keep in mind I chose to put this extremely private information up for knowledge not ridicule. <em>(not trying to be a jerk, please understand.)</em> </blockquote>


I don't think you're being a jerk or even unreasonable.



Thanks for sharing your data.
 
In a similar vein, last month, I spotted a "for sale" listing in my University Park neighborhood for a 3/2 home that is the exact same model as the one I rent from a private party landlord. Based on the photos, the two places are in very similar shape internally, and it's only two blocks from my place. The for sale home went to "accepting backup offers" within 10 days of listing (!!!) so I'm thinking they must have gotten an offer at or near the asking price.



But then I do the numbers, using the rent vs own calculator found on the main page on this site. (Please issue one "thank you" to the author.)



I pay $2,400 per month in rent. The landlord is very responsive to any problems (I've only had a few) and he knows he's on 'autopay' with my bank, so he will get his check regularly. I don't have any kids or pets; and I hate parties, so there's no really hard use of the property. I'm happy with the arrangements, and I assume the landlord also is happy.



The identical home was listed for sale at $549,000. I plugged the following numbers into the Rent vs own calculator: Purchase Price: $541,000 (get credit for the new homeowner tax credit), HOA dues $209. I used the default values for everything else. If the home is purchased for the listed price, the new owner will pay $1,000 per month more than I do.



As IR says, we've got a ways to fall to reach rental parity!
 
So here's my question. I did the math for cost per sq foot for both renting and then owning a similar property. How do I run the numbers to figure out what my monthly rent would equate for a fictional ownership? Does that even make sense?



So I rent for.... $1570

using the most basic formula we could say that that's my mortgage for 30 years....



(12months) x (30years) = 360months

(360months) x $1570 a month = <strong>$565,200 </strong>



So... supposedly based on my current rent on a (0 down, 0% interest) loan this property is worth $565,200? Someone either slap me, the Irvine Company, or slap a Texas license plate on my truck so I can afford something. (God Bless Texas.....)





Mahalo,



Drew
 
[quote author="Drew" date=1241427541]So here's my question. I did the math for cost per sq foot for both renting and then owning a similar property. How do I run the numbers to figure out what my monthly rent would equate for a fictional ownership? Does that even make sense?



So I rent for.... $1570

using the most basic formula we could say that that's my mortgage for 30 years....



(12months) x (30years) = 360months

(360months) x $1570 a month = <strong>$565,200 </strong>



So... supposedly based on my current rent on a (0 down, 0% interest) loan this property is worth $565,200? Someone either slap me, the Irvine Company, or slap a Texas license plate on my truck so I can afford something. (God Bless Texas.....)





Mahalo,



Drew</blockquote>
May I present the RentVsOwnulator?



<a href="http://www.irvinehousingblog.com/calculator/">http://www.irvinehousingblog.com/calculator/</a>
 
Drew, I'm confused. Are you asking how much the place you live in would sell for and therefore cost you per month as a homeowner... or are you asking how much of a mortgage you could carry while keeping your payments what they are now?
 
[quote author="Drew" date=1241427541]So here's my question. I did the math for cost per sq foot for both renting and then owning a similar property. How do I run the numbers to figure out what my monthly rent would equate for a fictional ownership? Does that even make sense?



So I rent for.... $1570

using the most basic formula we could say that that's my mortgage for 30 years....



(12months) x (30years) = 360months

(360months) x $1570 a month = <strong>$565,200 </strong>



So... supposedly based on my current rent on a (0 down, 0% interest) loan this property is worth $565,200? Someone either slap me, the Irvine Company, or slap a Texas license plate on my truck so I can afford something. (God Bless Texas.....)





Mahalo,



Drew</blockquote>




$565,200 is your total payments. The amount you can afford to finance for that payment is about $300,000. For a PITI payment roughly equal to your rent, the total purchase price would be about $300,000 with 20% down.
 
[quote author="SoCal78" date=1241431946]Drew, I'm confused. Are you asking how much the place you live in would sell for and therefore cost you per month as a homeowner?</blockquote>


Yes, exactly that. Also, am I overpaying or underpaying monthly in comparrison to a similar property that instead of rented is for sale.





Thank you,



Drew
 
[quote author="Drew" date=1241439182][quote author="SoCal78" date=1241431946]Drew, I'm confused. Are you asking how much the place you live in would sell for and therefore cost you per month as a homeowner?</blockquote>


Yes, exactly that. Also, am I overpaying or underpaying monthly in comparrison to a similar property that instead of rented is for sale.





Thank you,



Drew</blockquote>


Drew,



Seriously -- go back to the main blog page. Click the "Calculator" tab. Plug in your current rent in the box near the bottom (the 'rental' portion of the calculator). Leave all the other boxes as the default, and click the calculate button. You will be presented with the equivalent home purchase price.



The other side of the equation takes a bit more effort, but the tool is there. If you have a home purchase price and want to calculate the actual monthly cost to you, you need a few more numbers, and work with the top section of the calculator. Specifically, the home owner's association fee and your marginal tax rate are important. If you are home shopping, you probably know how much you could put down as a down payment and what interest rate you could get. Plug in the purchase price and your best estimate of these figures, and click the calculate button. Compare the actual monthly cost with what you pay now for rent, and decide if you can afford the home. Juggle some numbers. Play 'what if' scenarios. (What if your wife's income is cut in half? What if you make a smaller down payment? What if....)



Also, on the right side of themain blog page, under "analysis post" go to the "rent vs own" discussion. That will enlighten you on the analysis performed.
 
[quote author="Drew" date=1241427541]So here's my question. I did the math for cost per sq foot for both renting and then owning a similar property. How do I run the numbers to figure out what my monthly rent would equate for a fictional ownership? Does that even make sense?



So I rent for.... $1570

using the most basic formula we could say that that's my mortgage for 30 years....



(12months) x (30years) = 360months

(360months) x $1570 a month = <strong>$565,200 </strong>



So... supposedly based on my current rent on a (0 down, 0% interest) loan this property is worth $565,200? Someone either slap me, the Irvine Company, or slap a Texas license plate on my truck so I can afford something. (God Bless Texas.....)





Mahalo,



Drew</blockquote>


This is what we call a GRM, you are using a GRM of 360. We usually use something around 160. So you could buy something worth $250,000 with this monthly payment.
 
I also just rented a 1200 square foot with two car attached garage apartment in Turtle Rock. I would pay at least $500k for a similar sized property, so using the calculator I came up with a monthly cost of $2867.



My rent is going to be $2365. So a monthly savings of roughly $500.



But the fact is that when I eventually buy, I would not buy something that is the same square footage of what I am renting. I found a house I really liked that was massively overpriced at $849,000 ($362 per sf), which is why I didn't buy it. That was the asking price. So assuming I could have gotten it for $800k, let's see how the numbers turn out on the rent verses own.



That puts my cost of ownership all the way up to $4,467. So a monthly savings of roughly $2100 in the current market conditions to rent verses own.



Pretty much the same house would have to be more like $650,000 purchase price for it to be worth it to me to come out of renting. Is that possible in Turtle Rock? A home that is currently on the market for $849,000. Could I hope to buy something similar some day for $650,000? Or am I just living in fantasy land?
 
[quote author="anteaterscientist" date=1241400413]Drew, have you checked out the new apartments in the IBC for comparison?



They've got some competitive deals for a brand new place w/ the amenities and also surpasses the bare minimums of apartment, like includes a washer and dryer.

Of the "market rate" they were taking $250 off, plus one month free, which after the "savings" could be equivalent to your rent. For me it would have been worth it, but some people don't like the hassle of a new security deposit and moving.



If I had only known about these places, it could've been leveraged during my rent negotiation... oh well. I'm stuck with a 2b/2bath "San ...." apartment with the bare minimum for the $16xx range, where I think it could've been to the $1500 range.



Thanks for sharing your info.</blockquote>


Can anyone tell me where can I get more info on the apartments in the IBC? I'm moving in a couple months and and want to weigh my options...
 
I just concluded negotiations with my landlord for a lease renewal. I convinced him to drop the monthly rent by $150, or 4.7%. It would appear the market has softened by around that much since last summer...



Just for comparables, new rent will be $3,050 for a 10-year old 4/3 2400sf SFR on a 6,500sf lot.
 
[quote author="irvine_home_owner" date=1242371478]How long did you renew for?



And to think you were considering breaking lease not too long ago.</blockquote>


Another year. No lease breaky anytime soon for us. Wouldn't dream of considering it given my employment situation and what is hopefully just a dead cat bounce going on with Irvine home prices right now.
 
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