Offbeat Weekend News: Home Rental Scam
Maybe all those reports about the rental market getting tighter and tighter were true. In fact, the market is getting so tight, people are paying thousands to rent places that aren't even available!
Imagine checking on a vacant rental house you own, only to find a family you don't know living there.Doh. Seriously though, that would really suck. How would you even protect yourself from a scam like this? Demand to see the title to the property before moving in?
It happened this week to a King County man. But the people who were living on his property insist they paid another man they thought was the owner nearly $6,000 to move in.
...
Mike and Lia Lester claim that they and another couple rented the house after seeing an ad on the Craigslist web site.
They met a man they thought was the owner of the house and paid him $5,700 in rent and security deposits and he gave them the keys to the home.
Now, they say they've been scammed.
...
Sean Stewart doesn't know who they paid — but it wasn't him. Stewart owns the house and he's never met the Lester's.
"I feel sorry for anyone who gets screwed like this," he said. "There's no doubt about that."
The problem is Stewart has other renters moving in next week, so he says the Lesters have to go.
Of course, if the Lesters had just gotten on the equity escalator, they wouldn't have put themselves into such a vulerable situation to begin with.
(KOMO Staff, KOMO, 10.28.2006)
7 comments:
Owning is just awesome, isn't it?
Gimme a break trackbike, ever heard of the word 'anecdote'? I'm surprised your own personal Tyler Durden hasn't paid you a visit yet...
trackbike,
You should spend some time in the archives. You will find that most of the assertions in this blog are based on data.
Antectdotes can be a good companion to that data.
As a pilot, I can tell you that 'looking out the window' is just as important as meteorological data in predicting the weather.
The same goes here. Please take your angst elsewhere. You may find better company at a place like the RCG or Susan Ryan's blogs.
He should have bought that Craftsman in West Seattle for $25,000 instead of renting the whole time.
It would have been worth at least half a million by now.
Or he could've thrown it into the stock market and had at least 1 million dollars by now...
"He should have bought that Craftsman in West Seattle for $25,000 instead of renting the whole time. It would have been worth at least half a million by now."
Or not.
I don't have data going back to 1944, but if our man Pete Peak had simply dumped his money into the Dow in 1969, it would have been worth over $1.9 million in 2004 (here's a source. You do the math.)
"For arguements sake, lets just say Pete Peak doesn't really have 25,000 to throw down on the stockmarket in 1945. How could Pete afford to just buy a house? Maybe a loan would be a good idea for Pete."
Uhm...yeah. So what? The question is not: "how does Pete purchase a home in 1944?"
The question is: "Should Pete have purchased that West Seattle craftsman in 1944?"
The short (but absolutely correct) answer is: not as an investment.
The long answer is still far more complicated than you're letting on. For example, Pete has to consider the differential between the cost (or benefit) of renting versus that of buying in West Seattle in 1944, as well as the profit (or opportunity cost) of investing that differential.
To be fair, in 1944 West Seattle, it probably made sense for Pete to purchase a home. The cost of buying property on margin was likely cheaper than the cost of renting, and Pete could cover his fixed living expenses for less money by taking out a mortgage. But if you're trying to imply that this is a universal truth of the housing market, you're well out of line.
Right now, it's actually cheaper to rent than to buy. In 1944, that probably wasn't true. Historically, it definitely isn't true. The only way that people can rationally justify the additional expense of buying a home in West Seattle in 2006, is by convincing themselves that their homes are "investments" with greater yield than the financial markets. Grivetti and I are merely pointing out that historically speaking, this is a sucker's bet.
The numbers are absolutely clear: over the long term, you do not
"invest" in a house. You live in a house. You invest in the financial market.
off topic but how's your 50 inch plasma better in picture vs my 65 inch DLP TV?
I have an HK Home theater setup and all of it was less than 5G's... (livingroom)
just like the RE market, more expensive isn't always better...
In 5 years your 20K will be worth 5K and my 5K will be worth 2k...
It's good to know you have your priorities straigth though... drop 20K on an entertainment center but keep going to garage sales... I like the concept...
Seriously, no plasma can ever beat my other entertainment center (Den)... 100 inch front projection... 7.1 THX surround sound... awesome... also less than 5K for this too...
"You would not consider a home an investment?"
No. A home is a home. It may have financial benefits, but it is not an investment.
"Here is what the dictionary says: the investing of money or capital in order to gain profitable returns, as interest, income, or appreciation in value."
If you live your life by the dictionary, then more power to you. The rest of us also consider things like liquidity, rate of return and carrying costs when we choose investments.
To illustrate my point -- five years ago, beanie babies and pokemon cards fit your definition of "investments". For your sake, I hope you didn't go all-in on the pikachu cards in 1998....
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