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I'm sure this is happening a lot; it's a market that's hurting many people. But for every tennant being kicked out, there's a homeowner facing foreclosure. The tennant can certainly rent again, after much aggravation and maybe the loss of some money. The homeowner's prospect is not nearly so good.
Here is a solution for you.
rent until prices hit a bottom. Then purchase.
Then if prices ever skyrocket ever again, sell.
repeat.
Fal: I have heard of that happening quite a lot lately. The landlord pockets the rent payment, but doesn't apply it towards the mortgage and also pockets the deposit. The house is foreclosed on and the renters are left having to find another place to live...
I have experienced this. In my case, everything has worked out fine; but, this definitely is a risk for renters. It is a good idea to find a property that is being let by a rental management company. At least then there will be a third party keeping the deposit in escrow - and someone that will answer your call if there is a problem with the property.
Prospective renters should also research the public records for any filing of lis pendens and look into the owner's mortgage history to see if there is an ARM or a big, fat HELOC that might "motivate" the owner to stop making their payments.
Falzonia
Where exactly is this "devastation" you are talking about? The loss of the security deposit? I don't think comparing the loss of a $7,000 security deposit vs being a foreclosed on your primary residence is "devastation".
Also, please check with your local real estate attorney, but here in IL, if the landlord defaults on the obligation, take him to court and get a judgement for your security deposit. This is not like CA SFR real estate, the landlord can't just walk away from your security deposit. If the landlord can't come up with your deposit, the order will give you rights to search for the other property he/she owns and you can put liens on it. You can also ask the judge to give you power to garnish the person's wages or to put liens on his/her bank accounts. When faced with all this, most people come up with the $7000 (or give you property worth $7,000) so as not to ruin their lives even more.
Regards
"All I am saying is don't assume that renting is a risk-free way to ride the market until it bottoms out. It's not."
Risk-free is your word, not ours.
Renting now compared to buying is such a no brainer that it might seem almost risk free compared to the freeway you're running out into in your underwear with no shoes by buying now.
Renting now compared to buying is such a no brainer that it might seem almost risk free compared to the freeway you're running out into in your underwear with no shoes by buying now.
It is not a no brainer. It's based on where you live. Based on that calculator that's floating around, it would take only about 4 years in my location for buying to be better than renting. But in other locations, it would take 20 years (and how many people stay in one house for 20 years anymore). Research definintely needs to be done before deciding to buy or rent.
... and, it's free and anonymous
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Renting vs. Buying
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