Rental Madness

[Menehune Man]

My wife and I have lived in two apartment buildings in the McCully/Moi'iliili area for twelve years now. Both times were forced out by owners of said properties needing to upgrade then sell the units. It's their properties and everything was done legally so I don't fault them. Though it makes life unsettling for us renters. I heard of horror stories where forty or more people are trying for each rental unit. I feel very lucky that I found a place for us to move to in Makiki. We signed the lease today. I think the elderly gentleman who owns the building, gave it to us because he likes my wife. The real point of this whole story is... "How are renters going to fair say ten years from now?" Our new apartment is a one-bedroom with lanai on the third floor of a walk up. Cost? $850 plus electric/month. We'll make it comfortable, but it's nothing fancy, you know. I've heard of one-bedrooms going for over a thousand nowadays. Whew! It's getting scary out there.

[mel]

Re: Rental Madness

"How are renters going to fair say ten years from now?"

Worst.

The Governor will let the general excise tax rise in 2007 by letting HB 1309 become law. The Mayor of Honolulu is hell bent on getting the GE Tax raise Bill 40 in the City Council to Pass on August 10.

When that happens your rent and anything else you consume in the City and County of Honolulu will increase on January 1, 2007.

If you oppose this tax increase, contact your city council persons and ask them, write them or fax them... tell them you want Bill 40 defeated.

You cannot afford to pay higher rents because of higher taxes.

[jdub]

Re: Rental Madness

i feel ya, buddy...i live downtown in a sweet apartment i lucked into 4 years ago and am now forced to move because my lease-mate wants out...i'd be more than happy to keep the place, but must go through a credit check and the entire application process if i want to keep the lease (an indignity i was spared when i first checked the place out)...i met the owner's brother, we got along, and i gave him the cold hard cash...my landlord was forced into hiring a management company in november of last year, and they (the mgmt company) have caused me nothing but grief...they know they can get at least $400 more per month for this place and have made it clear that they want me out...what's a small, self-employed business owner with no credit to do in these chummed rental waters?

[AbsolutChaos]

Re: Rental Madness

I've heard of one-bedrooms going for over a thousand nowadays. Whew! It's getting scary out there.

1BR apartments have been going for over $1000 for at least as long as I've been living on Oahu (almost three years now). I pay over $1000 for my 1BR mainly because of location, but also because it's a secure bldg with covered parking and many utilities included (people who've seen my apt have commented that it's very large for a Waikiki apartment, apparently). It's actually a good deal (relatively), and I noticed that rental notices now for my same space are going for much more than what I'm paying.

What scares me is that I'm probably going to have to voluntarily move at the end of the year due to changed circumstances that will require me to find a pet-friendly dwelling. Trying to find a decent pet-friendly apartment in town (my job requires that I live in Honolulu itself) is going to mean paying closer to $1500/month, so I'm trying to mentally prepare myself for that.

[Miulang]

Re: Rental Madness

Unfortunately, it's going to get worse before it gets better. Many building owners are seeing $$$ in their eyes, so a lot of what used to be apartments and budget hotels are being converted into condos, which takes a lot of units out of the rental pool. Less trouble for the developers (who get their money and run) than for landlords who have to put up with managing the places and dealing with cranky tenants.

Until the housing market in Hawai'i cools off and the profit motive becomes less strong, people who don't own their own housing are going to have to struggle to find a place to live. You can also pray that the stock market starts getting healthy again so investors will pull their money out of real estate and put it back into the stock market.

Miulang

P.S. What Craig said (below).

[craigwatanabe]

Re: Rental Madness

Unfortunately, it's going to get better before it gets worse. Many building owners are seeing $$$ in their eyes, so a lot of what used to be apartments and budget hotels are being converted into condos, which takes a lot of units out of the rental pool. Less trouble for the developers (who get their money and run) than for landlords who have to put up with managing the places and dealing with cranky tenants.

Until the housing market in Hawai'i cools off and the profit motive becomes less strong, people who don't own their own housing are going to have to struggle to find a place to live. You can also pray that the stock market starts getting healthy again so investors will pull their money out of real estate and put it back into the stock market.

Miulang

Ummmm Miulang...don't you mean worse before it gets better?

My feelings is that the same market economy that will bring relief to home buyers when the interest rates rise will bring some relief to renters. But that economic move has a double edge to it meaning wages and personal income will drop before rental rates do and those who have staying power (money in the bank) will be the survivors when the crash hits.

Best thing to do is to weather this storm and at the same time start building up your bank account. When the storm passes you'll have several advantages over those who didn't save:

1) Better credit score for those rental credit checks
2) Better position to afford buyng a home if you save a lot
3) Better leverage when negotiating a lease...

When I rented a two bedroom apartment on Paani and Waiola street in McCully about 11-years ago I offered $35 more per month (the landlord was asking $515 and had four families after me to interview) I wanted this apartment because it was a short 15-minute walk for my wife's working place (behind Varsity Theater) and only two miles (long walk/short bike ride) to my work in Kakaako plus kitty corner to our apartment was the infamous Waiola Shave Ice (Hi Jerry).

I offered a monthly rental amount of $550 plus two month's deposit for a total first month payment of $1650 and each month's rent paid on the first of every month automatically from my bank.

We signed the lease right on the spot and we moved in shortly thereafter.

I couldn't have done it without having a savings account with several thousand in the bank. He knew I had a good reserve of cash so he never had to worry about late rent payments.

You gotta have money in the bank to successfully snag a decent rental unit cuz the bidding war is alive and well in the rental market as it is in the home buying market.

[Menehune Man]

Re: Rental Madness

Thanks for the responses guys. I'll try and hold onto something for the future. Sure wish I could travel back in time in order to change some of the choices I've made. Hindsight and all that, you know.