7 ms·

> $4.5k will get you a 1 BR in the Bay Area Average one-bedroom rent in San Francisco is $3,520, and two bedrooms is $4,550. It's much cheaper elsewhere in the

> $4.5k will get you a 1 BR in the Bay Area Average one-bedroom rent in San Francisco is $3,520, and two bedrooms is $4,550. It's much cheaper elsewhere in the Bay Area. In Oakland, average one-bedroom rent is $2,470, and two bedrooms is $3,050. $4,300 is very plausible in Oakland. Source: https://www.zumper.com/blog/2020/02/zumper-national-rent-report-february-2020/ https://www.zumper.com/blog/2020/02/zumper-national-rent-rep...

jameslk 7y ago
My numbers are a bit off since I last looked, and yes I was mostly looking in SF. Thanks for mentioning- I'll edit it. It definitely won't get you a furnished 3 BR with a decent interior like this place.
333c 7y ago
In this case the scam claims to be a house in North Berkeley (almost Albany), which I believe is more expensive than Oakland.
alteria 7y ago
I saw a 1 bedroom for $4,700 in the Peninsula recently, which explains why that complex has so many 1BR available.
- uoaei 7y ago
  And somehow, that's still the profitable option and not actually filling the apartment.
  - mschuster91 7y ago
    Probably because waiting for the property value to increase over a year or two and then deducting paying the loan rate/interest over the time is more profitable. Classic perverse incentive, the only way to fix this is a drastic vacancy tax.
    - lotsofpulp 7y ago
      > then deducting paying the loan rate/interest over the time is more profitable. What does this have to do with not renting the apartment? Any business will deduct interest payments as a business expense.
      - eru 7y ago
        And a vacancy tax isn't a good idea either. (Though it's better than the UK's tax rebate for vacancy.) Just use a land value tax.
  - bluGill 7y ago
    The problem is if they have some renters at the high price it is better to say they have tenants coming (even though they never arrive) than rent for cheaper and risk the old tenants find out the price is lower and they demand a reduced rate. Now add in a bank who is auditing your books: if you have some empty units "almost rented" that looks better than full units but you are not making enough on rent to pay the mortgage - even though either way you are not making enough in rent to pay the bills.
    - nradov 7y ago
      Banks don't conduct such audits.
      - bluGill 7y ago
        If the loan requires that all units be rented for $x they will do something to check.
        nradov 7y ago
        Bank loans to landlords do not contain convenants requiring that all units be rented for $x. You appear to be confusing policies that some lenders apply when originating loans with covenants that borrowers have to follow on an ongoing basis. Those are not the same.
14 7y ago
That is really mind blowing to me. I just looked at the local rental website for my small town and the first 2 bedroom duplex I looked at had a nice yard and looked good on the inside and was only $900/month. That is in Canadian dollars too I may add. That $4550 would be about $6000 Canadian and you would have people begging you to move in if you agreed to pay them a portion of that.The highest rental I see on the site right now is about $1800Cad.
- gambiting 7y ago
  SF is just another world to me, whenever I read about salaries or rent, it might as well be on Mars. We just bought our first home(3 bed, double drive, large garden) in a large UK city and the mortgage is £580/month(~$750 for you Americans). And it's not like we're poorly paid either, we both drive brand new cars, go on holidays twice a year etc etc. And then you get SF residents being paid well into 6 figures and unable to have a decent standard of living. It's just crazy to me.
  - jaclaz 7y ago
    >And then you get SF residents being paid well into 6 figures and unable to have a decent standard of living. It's just crazy to me. To be more accurate, it is only a subset of SF residents (in the IT space) that get that kind of pay, I often wonder how is the life of those that do not belong to that elite and that do not make that kind of 6 figures money.
    - bluGill 7y ago
      They don't live in SF. It isn't unheard of to commute two hours for a retail job in SF just to get where you can afford the rent.
      - jaclaz 7y ago
        Well, there must be also a given number of "middle class" people, that are not top notch programmers, nor "entry level" or "retail". If we take these as valid data: https://www.bls.gov/regions/west/news-release/occupationalemploymentandwages_sanfrancisco.htm https://www.bls.gov/regions/west/news-release/occupationalem... And set an arbitrary threshold at 45 US$/hour, the amount of people exceeding that are 31.1%, if we set it at 50 US$/hour they are 19.4%. If we draw another line, those that get less than 25 US$/hour are 42.1% and those that get more than 25 but less than 45 are 26.6%. So, even if we assume that 40% of people commutes for long distances (and BTW technically are not SF residents), since only between 20% and 30% of San Francisco workers can actually afford it, it still leaves us with 30%-40% of people that must be in a really tight spot.

jameslk 7y ago

My numbers are a bit off since I last looked, and yes I was mostly looking in SF. Thanks for mentioning- I'll edit it. It definitely won't get you a furnished 3 BR with a decent interior like this place.

333c 7y ago

In this case the scam claims to be a house in North Berkeley (almost Albany), which I believe is more expensive than Oakland.

alteria 7y ago

I saw a 1 bedroom for $4,700 in the Peninsula recently, which explains why that complex has so many 1BR available.

uoaei 7y ago
And somehow, that's still the profitable option and not actually filling the apartment.
- mschuster91 7y ago
  Probably because waiting for the property value to increase over a year or two and then deducting paying the loan rate/interest over the time is more profitable. Classic perverse incentive, the only way to fix this is a drastic vacancy tax.
  - lotsofpulp 7y ago
    > then deducting paying the loan rate/interest over the time is more profitable. What does this have to do with not renting the apartment? Any business will deduct interest payments as a business expense.
    - eru 7y ago
      And a vacancy tax isn't a good idea either. (Though it's better than the UK's tax rebate for vacancy.) Just use a land value tax.
- bluGill 7y ago
  The problem is if they have some renters at the high price it is better to say they have tenants coming (even though they never arrive) than rent for cheaper and risk the old tenants find out the price is lower and they demand a reduced rate. Now add in a bank who is auditing your books: if you have some empty units "almost rented" that looks better than full units but you are not making enough on rent to pay the mortgage - even though either way you are not making enough in rent to pay the bills.
  - nradov 7y ago
    Banks don't conduct such audits.
    - bluGill 7y ago
      If the loan requires that all units be rented for $x they will do something to check.
      - nradov 7y ago
        Bank loans to landlords do not contain convenants requiring that all units be rented for $x. You appear to be confusing policies that some lenders apply when originating loans with covenants that borrowers have to follow on an ongoing basis. Those are not the same.

14 7y ago

That is really mind blowing to me. I just looked at the local rental website for my small town and the first 2 bedroom duplex I looked at had a nice yard and looked good on the inside and was only $900/month. That is in Canadian dollars too I may add. That $4550 would be about $6000 Canadian and you would have people begging you to move in if you agreed to pay them a portion of that.The highest rental I see on the site right now is about $1800Cad.

gambiting 7y ago
SF is just another world to me, whenever I read about salaries or rent, it might as well be on Mars. We just bought our first home(3 bed, double drive, large garden) in a large UK city and the mortgage is £580/month(~$750 for you Americans). And it's not like we're poorly paid either, we both drive brand new cars, go on holidays twice a year etc etc. And then you get SF residents being paid well into 6 figures and unable to have a decent standard of living. It's just crazy to me.
- jaclaz 7y ago
  >And then you get SF residents being paid well into 6 figures and unable to have a decent standard of living. It's just crazy to me. To be more accurate, it is only a subset of SF residents (in the IT space) that get that kind of pay, I often wonder how is the life of those that do not belong to that elite and that do not make that kind of 6 figures money.
  - bluGill 7y ago
    They don't live in SF. It isn't unheard of to commute two hours for a retail job in SF just to get where you can afford the rent.
    - jaclaz 7y ago
      Well, there must be also a given number of "middle class" people, that are not top notch programmers, nor "entry level" or "retail". If we take these as valid data: https://www.bls.gov/regions/west/news-release/occupationalemploymentandwages_sanfrancisco.htm https://www.bls.gov/regions/west/news-release/occupationalem... And set an arbitrary threshold at 45 US$/hour, the amount of people exceeding that are 31.1%, if we set it at 50 US$/hour they are 19.4%. If we draw another line, those that get less than 25 US$/hour are 42.1% and those that get more than 25 but less than 45 are 26.6%. So, even if we assume that 40% of people commutes for long distances (and BTW technically are not SF residents), since only between 20% and 30% of San Francisco workers can actually afford it, it still leaves us with 30%-40% of people that must be in a really tight spot.