San Diego real estate is very undervalued compared to rent

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Submitted by gzz on May 29, 2017 - 7:58pm

Find a rental house or condo listing, find a current listing or recent sale that is comparable, run the cost to own v the rent.

The first few I did showed owning was 30-40% cheaper. That is not even counting the fact rents usually go up and intangible factors like pride of ownership and stability of homeownership.

For laughs, check this ad I found doing this research. "Maid/cook wanted, you pay us. Must enjoy cleaning up our pit bull's poop and call us Boss"

Submitted by flu on May 29, 2017 - 8:20pm.

Couple sounds to be inexperienced jackazzes. Gonna come back and bite them in the azz, if they find a professional renter like this lady...

It would be too funny.

But in reality, it's probably a joke.

Submitted by gzz on May 29, 2017 - 8:15pm.

There is so much LOL in this ad.

The author is in Law School, and randomly capitalizes Nouns like Vegetarian, Washer, and Pho, one of the things her future servant that pays her $300 a month will be cooking. Make sure you know how to cook Vegitarian Pho!

Also her pit bull "has lots of Energy" but "is not trusting of new People."

There will be a "Roomate Contact" with additonal details. You can trust her to do a good job because she is in Law School and she will type it on a Keyboard. One thing she did not learn in Law School however is that "Netflix and chill" has a Specific Meaning.

Submitted by flu on May 29, 2017 - 8:19pm.

Well, anyone can say they attend a particular school...Question is if the guy will pass the bar...

The LOL will be if a professional renter moves in....

Professional renter + Owner's pitbull + Fake Dogbite => Owner wishing he had umbrella insurance and went to Harvard law school .....

That said, this has got to be a joke making fun of the housing situation....

Submitted by spdrun on May 30, 2017 - 7:08am.

Either housing is undervalued or rents are overvalued. See also: NYC, SF.

Submitted by FlyerInHi on May 30, 2017 - 10:34am.

Those two lovebirds are real entitled asses.

I never heard of a live-in maid not getting a salary and having to pay rent to take care of the residents. Haha, and they are too cheap to furnish the maid's room.
Normally accommodations are included as part of the renumeration. They will never find anyone.

Submitted by spdrun on May 30, 2017 - 10:49am.

One thing she did not learn in Law School however is that "Netflix and chill" has a Specific Meaning.

Cue the snarky responses to the ad.

This being said -- Nf&C is code for schtupping. Maybe they're admitting that they're really "schtupping" whoever responds to their ad :)

Submitted by FlyerInHi on May 30, 2017 - 11:00am.

Cooking a healthful meal takes at least 2 hours not including planning and cleaning. And they expect to split the grocery bill with the maid. Sounds like slave labor to me.

Plus they run an Airbnb out of the house, with a pit bull in residence. Really?

Submitted by mixxalot on May 30, 2017 - 11:20am.

oy veh! Are you pulling a Bill Handel? Only that dude says schtupping instead of porking, lol.

Submitted by thejard on May 30, 2017 - 1:18pm.

Are you using 20% down as an input? What if you use the 3.5% HFA?

Submitted by gzz on May 30, 2017 - 3:43pm.

I used 5.2% of the full price to include mortgage interest, taxes, insurance, and cost of capital (ie lost return from an alternative use of the downpayment.). Then I added HOA if applicable. You can mess around with these assumptions but it won't really change it much.

I ran the numbers for a 2/2 union square low rise condo downtown, a 3/2 with a standard lot in clairemont, and a 1/1 near UTC. For the condos I was able to find comparable recent sales with the same floorplan in the past 3 months. For the house I used an average of three rentals and three recent sales.

Further confirmation is the very low inventory. Anecdotally, seems like the percentage of listings that are estate sales or renovated flips of recent estate sales is higher than I've ever seen.

Submitted by gzz on May 30, 2017 - 4:05pm.

My impression from the ad is they manage airbnbs elsewhere and store the loaner bikes in their own garage.

A conservative estimate is the work they demand is 100hrs a month, which they claim to pay with a $950 rent discount. That is below the minimum wage and therefore illegal. While you can informally give one roommate a little rent break for doing more than half of the chores, this ad involves taking direct orders, regular fixed hours, and says normal outside employment is unacceptable. In other words, it is a job and requires the Law Student to pay payroll taxes and unemployment insurance, even if the "pay" is in-kind. So what the ad proposes is illegal in many different ways.

While there might be some bed/bath rentals in PB for $1250/mo, this one involes sharing a 2 bedroom with a couple and a pit bull, but none of your pets allowed, and no parking. $1250 would be reasonable for a nice place like this shared with one person, or for two couples, but I have never heard of a couple splitting rent evenly in a 2 bedroom with a single person.

I do think they will get responses, but they will be from people with mental and drug problems.

Submitted by FlyerInHi on May 30, 2017 - 5:00pm.

gzz wrote:

I do think they will get responses, but they will be from people with mental and drug problems.

Wack people deserve one another.

I agree with everything you said.

Are they renting or are the owners? The tax records will tell you.

Normally when you hire a live in maid, you may change a small nominal amount for rent. But it's never fair market value. Fringe benefits would include free utilities and food, especially if the maid cooks. Plus on top of that you would pay the maid a salary.

I don't know what those people are smoking.

Yesterday, I fixed a toilet paper holder and reinstalled it on the stud. It took almost all afternoon with patching, painting, getting screws, etc. Granted it's not continuous work. A handyman would have to charge min 6 hours especially if he has to run to Home Depot to buy screws, match paint, and return to next day to apply coats of paint

It's not a 5 min job like people think. People who don't do just don't have a clue.

Submitted by no_such_reality on May 31, 2017 - 7:39am.

spdrun wrote:
Either housing is undervalued or rents are overvalued. See also: NYC, SF.

Or borrowing money is dirt cheap.

Submitted by spdrun on May 31, 2017 - 7:44am.

Maybe so, but that doesn't help renters who are paying overvalued rents. If 40% of DOCTORS can't afford SF...

Submitted by poorgradstudent on May 31, 2017 - 4:44pm.

High rents are one of the main reasons I can't call the current home prices a "bubble". Rents are high in part because supply stinks.

I know way too many people who work in San Diego but live in Chula Vista, Temecula or Ramona. Remember when Santee was thought of as the boonies? Now it's just another suburb with a tough traffic pinch point heading west on the 52.

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