Renting a House

Well, I ran out of time on my real estate search, so I'm stuck renting a house just to have somewhere to live. Typically, as soon as I signed the lease, better options appeared. The house I'm renting is in the Florence section of Northampton, MA. The rent is $1200/month, furnished, with the tenant paying all of the utilities. It's been a long time since I had the gas and electric in my name, so it will be interesting to see what they're running per month in the spring/summer. I'm estimating about $100/month together. The rental is short term, through July 31st at the latest, so I'll be continuing with my build or buy search in the interim. The rental was found through CraigsList, and was listed through an agent charging a finders fee equal to 60% of the rent, no pro-rating for the short stay.

I remember years ago paying a security deposit into an escrow account and wondering whether the landlord would try to hold onto some of the money for imagined damage. These days, with digital cameras, it's quite easy for the tenant to walk-through the house and take a couple dozen pictures, walk around the outside of the house and take a couple dozen more, then burn them all on a CD as a permanent record. That's what I'll do, because I've learned through the business world that contracts work best when everything is fully documented and everybody understands the conditions. It's misunderstandings and wiggle room that cause problems.

For somebody who's been living in apartments all his adult life, it will be a good reintroduction to the world of lawn mowing and sweeping sidewalks. I'm not going to start a program of home improvements on a house I'm renting for three or four months, but I'm sure there will be plenty home maintenance issues I've forgotten about. Since I bought a car last month from friends in town and it already has a recycling/landfill sticker on it, I'm set there. Besides, I don't produce a much garbage, maybe a kitchen bag worth every week or two. In the spirit of my renting an apartment last winter without noticing there wasn't a sink in the bathroom, I've rented a house with a two car garage without noticing if the bays are empty.

The $1200/month rent would have made a nice mortgage payment, closing on $200,000 if it's just the mortgage, without taxes and insurance. However, house prices are falling now in Massachusetts, and if you measure housing prices between now and the summer, I'm confident that the $1200/month will have paid less principal that the loss in value of the house, had I bought today. It's not just the sub-prime market that's in trouble, though the sub-prime loans certainly helped drive up the prices since housing prices are set on the margins. I'm gearing up to start a new financial research and writing project as soon as I move in, so expect to hear a lot more about the the phony housing compensation for negative savings that the eggheads have been blabbing about the past five years.