Would you get into a bidding war for an apartment?

The Globe reports it's starting to happen, due to the tight rental market in Boston. Also, undergrads looking for fall apartments? So, so screwed.

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    When I lived in Allston I

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    When I lived in Allston I received multiple calls in December asking if we planned to renew the lease, which started in September. Their rationale was that for the bigger houses (a 6-bedroom in the Gardner/Ashford/Pratt cesspool) the kids wanted to have their arrangements all set before they went home for Christmas break.

    Did you whip out your crystal ball?

    Nine months is a long time for many tenants to look out.

    I tried to sign a five year lease at my current apartment. The rental office laughed at me. I even offered to put up an entire year's worth of rent. They didn't like that idea either.

    Mass Law

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    Mass law prevents them from taking a year's rent even if both parties agree to it. Only first, last, security and key deposit can be collected.

    Where did you read this?

    I read through the City of Boston website. They have some material on renting apartments. I didn't see anything which mentioned longer leases, or payment for a full year's rent.

    Yup, $1600 to live in a 475sf

    Yup, $1600 to live in a 475sf 1 BR apartment off Huntington between LMA and Brigham Circle has finally forced me and my husband out of the city this year when my lease expires in July. Whoever wants to pay $1600 to live in an apartment with unsealed windows, 6 square feet of kitchen counter space, the loudest radiators ever, and a mouse that comes up through a hole in the floor can gladly have my place that I've called home for 4 years.

    I guess my mortgage is a great deal

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    I bought a single family home about 4 miles away from that location and pay just over 1800/month including mortgage, insurance, and taxes. IF you can come up with the down payment these days there are great deals to be had for buying a house...at least in Roslindale.

    Thats not that bad

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    for the location, and the types of units out there.

    Sadly places like Southie, Charlestown and Dorchester are getting just as expensive without the same rise in amenities or niceness of the properties.

    This city and the surrounding citlets have a major, major problem with housing. The state as a whole has an issue, and while it's good time now for investors, once all these rich babyboomers and investors die it's going to hit the state very hard because of the collateral damage it's causing.

    When the older slanted population ebb recedes, and the state finds that most of the people that would have taken their place had moved to cheaper states to start families... well.. it's not going to be fun.

    You're going to see a horrible crash in value, or a lot of empty luxury condos for a long time.

    Maybe not

    When the older population recedes in 10-20 years, then those apartments will also be older and will become priced for less affluent renters probably, like post college people 25-35. It won't resolve the issue of family housing, but the issue there is the schools as much as the value and inventory. I think Boston might be a more attractive city to live in in 10 years due to this factor. Has the addition of all those condo and apts in the Fenway raised or lowered rents there?

    Luxury condos

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    Will probably help the situation. They can easily be converted to rentals, and then their prices will come down as the supply outstrips the demand- which will bring down the prices of the less-luxury places even more.

    It's getting harder to rent

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    It's getting harder to rent out condos. Banks won't give mortgages to anyone in the building if more than a certain percentage of units are rented out. So condo associations are starting to make rules to discourage people from renting their units.

    Harder to rent is right...

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    if you give a crap about condo association rules, and many people don't. I have ruled out renting my condo (one unit in a three unit triple decker), even though we don't have a prohibition in our condo docs, in part because it would prevent my fellow owners from refinancing at favorable rates or perhaps at all.

    I cannot say whether they would do the same for me (and we all get along). I can only imagine some of the behavior in larger buildings - my hunch is that lots of people are renting out their units on the DL.

    I do admit

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    Access is a key for me, and I love my 20-30 min walk to work (30-40 on public transportation when not FAILing).

    That said, when browsing I haven't noticed much of a difference in availability. I haven't found any bidding wars for the normal rental units I've ever looked at. The apartments themselves haven’t been renovated beyond need for a large rent increase. All I’ve noticed is considerable price creep, and everything getting the label of “luxury”.

    400sqft, not remodeled, studio shit in an old closet? Luxury!: $1350!

    And let’s face it, while inflation has been low, wages still haven’t been keeping up. Just seems a lot of landlords can justify their high and increasing rents because of the September influx of migrant residents and lack of this city building anything besides the super marketed “luxury” condo.

    Didn’t JK just show some charts that showed the 25-35 demo shrinking in Boston? Exactly the people that go after these non-luxury, but non-slum places. The other amusing thing is tracking these places, and watching them go unrented for 6-8-10 months without pricing them to their real rental value, only to finally find someone gullible and take it. The housing rental market in this city is just as stick and stingy as the commercial market in places like DTX.

    Factor in the cost of a car

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    One way that young people are paying down their student loans at a high rate is by not owning a car.

    It is a very striking phenomenon, but doing the math makes sense. Most small vehicles are now $20,000, plus financing costs, plus insurance, taxes, etc.

    It doesn't make sense when public transit is unevenly distributed, non-comprehensive, and unreliable.

    You have a car-based job so that works for you. Unfortunately, many people can't afford to be in inconvenient areas because cars are a luxury in the city.

    Please don't tar all

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    Please don't tar all landlords with the same brush - we're not all scum. I bought a two family just as the air was beginning to leak from the housing bubble (it's the only way I could afford to buy in this godforsaken city) and I charge $1450. for a massive, 1300 sq ft 2 bedroom. I also subsidize my tenants heat until I can afford to upgrade their heating system. I'm not making any money as a landlady but I like knowing that my rent (mortgage) is stable for the term of the loan.

    The Free Market Is Broken

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    Well that is in essence part of the problem. 20 years ago that building would have cost you half as much, and the rent for that size apartment would have averaged $700. Over that same 20 year span incomes have not really raised at all, especially when factoring in inflation of other items such as utilities and food.

    People who buy at these rates are as much a problem as those selling. Since landlords need to stay ahead of property taxes dictated by artificially raised values, and people are forced to pay whatever the landlords are charging or be homeless we're locked into a cycle. One made worse by fluctuating [mostly up] interest rates.

    It will take a mass government intervention to fix the problem by forcing artificial price limits in line with the inflationary value of the dollar, and that won't happen until one person [me] can assume complete, absolute power.

    Yes-Menino is broken

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    Literally and figuratively. And he is the "free market" in Boston.

    Nothing gets developed without his say so, and the only thing he says so to is large, luxury developments (high taxes, no kids in the schools). We have built almost nothing in the way of moderately priced housing and we are significantly overbuilding the downtown luxury market because we live in a Stalinist/Meninoist economy. Imagine what would happen if appropriate sections of Comm and Beacon were zoned for 6 story mixed use/residential instead of all that one story commercial? Now stretch that to Washington Street, Centre Street in JP and W Rox, Hyde Park Ave, Dorchester Ave, Columbia and a host of other streets.

    Unfortunately what we may end up with is a total bust of the luxury market while the moderate price range goes wanting-I didn't used to think so but they may end up meeting at some point - with an luxury apartment renting at $3k a month considered the new standard for undergrads around here. You can't build enough housing simply by squeezing 15% affordable into giant luxury towers (which in itself is a dumb idea - but for another day).

    I am a landlady that owns

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    I am a landlady that owns property out of state in a major city. I bought a multi-family as a long-term investment property and currently just about break even on my rental income and mortgage payment since I cover the cost of heat. While many landlords as well as residents protested, property tax went up to cover the shortfalls in place due to the wars we are in overseas. I do understand that with the federal government allocating less money towards states and cities, there are still many aspects of a city that need income to operate properly.

    I reluctantly and nervously approached my own tenants letting them know of a 3% rent increase to cover the increase in property taxes, the increase in the cost of gas that I pay, as well as the increase I have to cover for the house's water bill.

    I actually reside in a rental unit in Boston and until I was on the landlady end of things, I was upset about rent increases. I still am because it is unfortunate for so many people, but realize that not all of it is directly because of landlord greed. I am not defending the greedy landlords but I don't think a lot of tenants understand that there are rising costs of... everything. If a district's budget increases, while the assessed value of all property remains the same, the property tax rate will increase and individual property owners will pay higher taxes.

    Soooooo property taxes going

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    Soooooo property taxes going up, federal funding being cut to cities, congressional turmoil over federal deficits leading to spending cuts, and the defense budget that makes up the lion's share of federal spending are only linked by coincidence? Sounds like a severe shortage of clues

    Please

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    Notwhitey is right - Boston's taxes have been going up at twice the rate of inflation for over a decade because Menino never saw a dollar he couldn't spend. Property taxes are a straight formula and Menino (with the authorization of the city council) raise the property taxes by the statutory maximum every year - it has ZERO to do with any kind of federal funding or any other funding for that matter.

    I have to agree with anon, Stevil.

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    Part of the reason that property taxes are so high in lots of places is because they do help pay for our illegal, wrongheaded and stupid wars abroad. If the United States Government wasn't so busy sending our troops to war abroad needlessly, our taxes wouldn't be as high as they are. The fact that Federal funding to cities, etc., are being cut back does have lots to do with our wars abroad, also.

    Um we haven't had a budget in

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    Um we haven't had a budget in 4 years because Harry Reid refuses vote on any that would pass both houses. Social security/medicaid/medicare now outpace defense spending by a hefty margin. Even zeroing out the DoD budget won't fill the hole SS/medicare/aid are in. Hence why the country is in deep shit in a few years as the demographic bubble of elderly people on entitlements overwhelms the younger poorer tax base and compounded interest of the debt reaches astronomical levels.

    All of that of course is at the FEDERAL LEVEL and has nothing to do with LOCAL property taxes.

    Derp

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    the House controls the pocketbook, and there hasn't been a budget out of the house that can pass the senate thanks to Paul Ryan.

    Writing up a far right wing sploogefest bill, passing it along a party line vote, then claiming the senate didn't act on passing a budget because it would easily fail the more moderate house of congress is a bit disingenuous, no?

    up
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    Isn't that the same kind of tripe the senate sends the house

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    They just passed a budget bill that has no chance in the house.

    The way it's supposed to work is each side makes a proposal and then you agree on something in the middle. The problem is, neither side wants to budge (at least Obama finally got off HIS high horse on the CPI calculations for SS - it's a start). Would help if we had at least a common goal (eg - federal revenues should be 18% of GDP and expenditures 20% - averaged out over time) Then you just argue about who pays how much and where it goes.

    More moderate house of congress - are you referring to the senate? Surely you jest. I always laugh when I hear one side being called more moderate - because the definition of moderate seems to depend on your party affiliation. The problem is that we have no truly moderate party in this country. We have tax and spend liberals who do good work on the social side (at least I agree with them) and common sense fiscal conservatives who are social neanderthals. If you ever got a small truly moderate party that controlled the middle - socially liberal and fiscally conservative - you could control the direction of the country with a small minority. Who's in?

    Historically

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    You put in what you want, minus poison pills that you know only antagonize the other party. That's no longer BAU, which is why you're seeing the breakdown.

    I mean this is the house that has voted to defend Obamacare several dozen times.

    This isn't the first time Obama was on board for chaining CPI, so not sure the point there.

    For Fiscal Conservatives I'd argue we have none. The GOP looked the other way while Bush was in office, and Rove (and the party) declared deficits don't matter when in office. They only bang the drum when out of power, forgetting once in. And the drum they bang is laughable when compared to the budget and GDP. Duck genitalia and funding for past presidents combined makes for 0.00004% of GDP. If we're to get to fiscal balance on the back of that, we're going to need to change the laws of mathematics.

    In that vein, I'd rather tax and spend. Fool me once...

    It's YOUR investment

    Too many people become landlords thinking it's going to be a lucrative investment. If a landlord has to take out a mortgage to buy a rental property, then maybe it's not a wise thing to be doing. If a person went out and invested $10,000.00 in Apple stock at $700.00 per share, they own it. They can't go to Apple and ask for their loss back now that it's selling at under $500.00.

    Raising rents by 3% might not seem like much. If you ask around, that's what most people get for a pay increase per year. I'm even confident in saying many more get less than that.

    Nearly Driven Out

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    Seriously getting so bad I am considering selling and moving to Providence. Only way I can ever afford to upgrade beyond a studio at this point is to live somewhere like Providence where I will need 8 Rottweilers to keep predators out of my house (which, as it will be in Providence, will be somehow surrounded by highways on all 4 sides of the property). Ok I am exaggerating how bad it is there, but not much. And I don't like being "In B4 the Gentrification" because I like my stuff. Also not a fan of old wood frame houses. Providence doesn't have many apartment buildings or townhouses.

    LOL! Is this post a joke?

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    You make it sound like you would be moving to Camden, NJ or something, ha! Where do you live now, Beacon Hill or Back Bay? Talk about about being spoiled and sheltered, wow! Not a fan of old wood-frame houses?! That's practically 3/4 of Boston's housing stock!

    It would be much easier for

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    It would be much easier for the government to streamline the processes to allow people to build more housing.

    Interest rates are....up?

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    Did you mean down? I thought you were about the make the argument that housing prices are being artificially inflated by interest rates being kept artificially low by the Fed.

    At all events, I think your problem is solved not by price controls, but rather by allowing interest rates to rise to levels that actually reflect the real risks associated with lending. Even a 1% rise in rates would would put a major brake on what is quickly becoming an overheated Boston-area housing market (at least for the more desirable areas within the Boston-area).

    Check out Venezuela

    if you want to see how things work when one person decides how much things should cost based on some arbitrary opinions.

    'Artificially raised values'? No-one is writing laws dictating what a house should cost. If you want a cheaper house, move to Detroit- we will not miss you.

    Outbidding

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    Not surprised. It happened to me in Watertown in 2011. I heard from the broker that it ended up going for a couple hundred more than it was listed for. I ended up living somewhere else.

    so much to comment on

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    Ok, so I have some feedback for a number of the other comments:

    I bought a condo to live in in 2007 and couldn't sell it two years ago due to its value having dropped so I've been renting it....it's in a not so desireaable area of Dorchester so I'm charging $1100 a month to rent it as a 696 sq. ft. one bedroom with a separate dining room. It costs me about $1050 a month between the taxes, mortgage, condo fees and insurance. I feel I'm giving the tenant a fair deal. my previous tenant was paying $1190 and I had to evict her because she was dealing crack with her boyfriend. If the current tenant wants to stay I'll leave the rent the same.

    I think the large number of section 8 rentals is driving up rents a lot since the low end of the market is flooded with them and landlords tend to like government guaranteed rent checks every month so they take them over market rate tenants. This is especially relevant in dorchester, roxbury, mattapan, hyde park and roslindale where rents are lower so section 8 vouchers cover the monthly rent....the units in these areas also tend to be larger (3-4 bedrooms) so much of the inventory for larger units exists here. The section 8 tenants deter market rate tenants from renting in the same building and the area becomes mostly low income and those who can afford to live somewhere else do.....

    I bought a house two Augusts ago in a nice part of Hyde Park (9 houses from Milton) and pay $1,700 a month for a five bedroom house with a large yard and two car garage...granted it was a fixer uppper but it's now much nicer than anything I could have rented for the same price and the mortgage is fixed for 30 years so no increases!

    I take my landlady's dog

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    when she goes to Foxwoods with the ITAM group. I take him for the long walks that she can't make in the snow. I take out her trash and change out her windows. I clean the snow off of her car.

    Do I have to do all that? No. It sure contributes to the fact that she charges me twelve fifty for a large two bedroom in Belmont and hasn't raised my rent once in six years. She stopped asking me to sign a lease after my second year.

    Now the house across the street was in a real state of disrepair and the previous owner did not have the money to fix it up. He sold it to a nice Irish immigrant kid who fixed it up real nice and now gets eighteen fifty for his two bedrooms. The funny thing is that he's had three tenants in two years for various reasons, the main being that the tenants bought because it was cheaper.All were upwardly mobile types.

    When the third set of tenants was loading the moving truck across the street,my landlady remarked to me: "now you know why I never raise your rent".

    Moral of the story: find a nice older person who has a two family and never leave.

    And when that nice older person passes on?

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    Have some money saved up to either buy your own place or make an offer.

    Otherwise, you are at the mercy of the estate, as countless renters have discovered.

    Or, you can do what a friend did. He had owned a house in Cambridge, and then moved to NYC for 15 years. Upon return, the elderly lady that was his former neighbor offered him a somewhat too small apartment at a reasonable price. About a year later, she sold the building to him and traded units to get the smaller, first floor space, living rent free as a part of the great deal. She passed away a couple years later, and now he rents the unit.

    Landlady

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    You missed your own key point. You live in Belmont. I doubt the article was referring to Boston suburbs when they discussed bidding wars. And before you get all emotional, yes I am knowledgable about Belmont. Spent 18 years there.

    What?

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    There are no two family houses owned by old ladies in the city of Boston?

    Sure are

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    but their 10 deatbeat kids and grandchildren live there already.

    /snack

    Bidding Wars Outside Boston

    They are happening in the inner ring communities (i.e. those still closer to downtown than West Roxbury), and its getting crazy.

    Friends who own multi-family property have told me that people are trying to outbid each other for rentals in Somerville and Medford, a friend who sold last July in Medford had to navigate a bidding war, and a friend who is looking to buy in Medford has been outbid in bidding wars several times.

    People are even contacting owners directly in neighborhoods where they would like to live, making offers to buy and offers to pay a lot more a month than the current tenant to move in when the current tenant's lease ends. I've had five cold-call offers from realtors this month alone, as have my neighbors, from realtors who caught wind of the bidding war on the house next door to us.

    Maybe Belmont prices have outstripped the perceived value curve, or we just haven't heard of it going on there as well.

    I have a three family that I

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    I have a three family that I bought right after the housing bust. Rent from just one apt covers my mortgage and taxes. The rest is pure profit. And I keep the rents fair.

    And you know what? Thats how its ought to be. Landlords are businessmen and are not out there to subsidize housing. If you cant afford it - move out to suburbs.

    You just proved his point

    And we thank you for it.
    Yes, the landlord is assuming a degree of risk, as you've shown in your link. He's assuming risk to his capital investment, and also risk in having renters, who aren't always *ahem* cooperative. By assuming this risk, there's a chance that his investment can be a good one. Is that a bad thing?