[Basil Ransom]

Many of us live in expensive areas, where a decent 1 bedroom goes for $2k+. But I regularly meet people who pay below market rents - sometimes it's a hundred or two hundred bucks, sometimes five hundred or thousands a month under.

My rent is probably $100-300 under-market. An acquaintance recently told me she's getting 50% off - to the tune of $1000-1500 off a month.

One strategy: Rent out an entire house or multi-bedroom apartment and then charge the other housemates more than their 'fair share' of the rent. A little skeezy I suppose, though you are shouldering some risk for that.

The typical route though is 'knowing someone.'

People will have rent controlled places and rent them out to a friend, or they're leasing it from a landlord who is stupid and vastly underpricing their property, typically in places where rents have gone up faster than local landlords realize. Or they're run by property managers who are too lazy to raise rents because they only get a 5% commission - an extra $15 a month for a $300 rent increase just bores them.

Certain parts of LA are like a Hollywood club - either you get in by knowing someone, or you pay obscene amounts for a place at the table. You wonder how so many people can afford these crazy rents - and they don't, because they don't need to. The whole real estate system in dense liberal cities in the US is fucked, and slanted to enrich some old people and a lucky few poor people.

[Ensam]

Generally you have to know someone. Even then usually the place is below market because there's something 'up' with it. Often times the owner wants to make some easy cash under the table and doesn't want the hassle of tenants who might demand real services (such as repairing appliances, etc.). I lived in a place like this in grad school. Well below market prices, paid in cash, we were 'house guests' and responsible for any repairs we wanted on the place.

[ryanf]

I thought about doing a similar write-up. The way I've done it is I found a "mom-and-pop" renting out a condo in the downtown area instead of an apartment farm, and I negotiated and used a little bit of charm, and I'm 2-3 hundred under market value for the area. Individuals will negotiate, your average apartment farm won't.

Or, purchase if you have the credit and desire to squat for awhile. Mortgage is almost always cheaper than renting.

[Basil Ransom]

Paying in cash is not a problem. As for repairs, if they're not too expensive or substantial and the place is cheap enough, sure.

I rented a spot in college that understated the number of bedrooms by one because one room legally could not be a bedroom, for whatever reason, but the landlord let prospective tenants know.

Also, if you're chasing housing that is a bargain, make sure to show up with 2-3 months worth of rent, a checkbook or even cash if need be, to sign a lease on site. Many times, a person told me I had the property, I just had to come by a couple days later to sign the lease. And then their friend or whatever ended up taking it. It's like taking a girl on a date - if you don't bang her right then and there, you may never hear from them again. But if you go balls to the wall on the first meet, you have a much better chance of sealing the deal and getting that connection.

ryanf, the girl I mentioned getting 50% rent is moving into one of those apartment farms, I think. I wonder how much latitude those property managers have, and what's really going on that you can just piss away a grand or two a month. This girl had a background that I'll say might make some people feel bad for her and extend her a kindness, so that could be a factor.

Another method is to simply monitor Craigslist like a hawk. Be prepared to lose a month of rent though when you have to move on less than a month's notice.

[el mechanico]

Why don't you just buy a place? Even out of town then work it to your advantage.

[Sebastian]

I am not sure it would be possible unless there are some corruption going on where both parties get benefits.
(eg: Landlord or Manager gives you Low income rate by charging more money in exchange for you Passing the line on waiting list. not sure if this is even possible)
Landlords are business savvy people and they won't give up extra $50 a month I believe

I thought about renting a whole place and rent it out to people so by doing some extra work and taking some risks, I can at least get my room 50% off. it doesn't usually make sense to rent out the whole place.
Let's say a room by itself goes for $500 each. 3 bed apt or condo will go for $1300~1500. Even you rent it for $1300, if one of your two rooms sits for a month or so, then you gain nothing. It doesn't make sense for me but I guess there are people who will just take it like that.

I am still thinking about this idea though in a different way.
When I go to LA, I'd like to rent out 2~3 bedroom and put 2 bunks beds in each rooms. I want to rent it out to mostly foreign girls (priority) or guys. Foreigners visiting temporarily are in party mode. it would be fun to live with them.

But I am not sure which landlord would say 'cool, you can put bunk beds in my house and rent it out to bunch of foreign people'???

[Basil Ransom]

(09-28-2014 10:21 PM)Sebastian Wrote:  

Landlords are business savvy people and they won't give up extra $50 a month I believe

I thought so too until I started renting places.

And 'landlords' often don't exist. Who is the landlord? The person who owns the property? The onsite manager? The property management firm that is responsible for filling vacancies?

When you separate ownership and management, you get some perverse incentives, like I mentioned before. Property managers, when they don't own the property, could not give a shit about maximizing revenue. An extra $200 a month in rent isn't going to affect them, it's just going to line the owner's pockets. Property management firms, it's the same deal as buying and selling a house.

The agent might have to put in twice as much work to make you 100k more on a sale, when his share will only go up $3k, on a base of $30-60k. People are starting to realize the perverse incentive there, and the same goes for property management.

The bunk bed idea could be good. I know that goes on around here with foreign students, especially girls sleeping 2-4 to a room. Just make sure you get a spot with very hands off management.

[jamaicabound]

I think the two easiest ways to save on rent are A. Look for people renting short term and B. Pay cash upfront for a discount.

In terms of renting short term many people need to leave a city for a few months for work. It's really a hassle because it's not long enough to really find a tenant but at the same time long enough that it sucks paying two rents or mortgages. Look for housing being rented for say ideally 6 months or less but potentially even less than a year. Most people are going to want something for at leasst a year so anyone renting a place for under a year or even under 6 months is going to have a really hard time finding someone. For that reason you can get stuff really cheap. Another option would be rent something thats in foreclosure. Assuming you don't have a lot of possessions and can pretty much pickup and move in a day and fit your stuf in your car or truck you can save a ton of money this way. I rented a foreclosure for 6 months I was planning on buying. My buying it wound up falling through but I was only paying $250 a month for a place that would normally rent for $1200 a month.

Another scenario a girl I used to date really wanted to live in the city so of course had to go and get a place in the nicest apt building in the city or at least one of them. Any of you guys on here in Chicago probably heard of Aqua over on columbus right across from navy pier. I think it was $1900 for a studio after parking and some other fees I think over 2 grand. Don't get me wrong really nice building, great amenities etc but just too expensive. After about 6 months she couldn't afford it as she was also paying her parents mortgage to help them out. Wound up subleasing the place for the last 4 or 5 months for half of what she was paying for rent and still wound up having the place sit vacant for a month.

I tihnk those are the easiest ways to pay cheap rent. I personally would advise against charging ohters your living with more. If its your friends your fucking over your friends which isn't cool and if its a stranger for you to be able to charge them more htey probaly wont see the lease which means they are not on it which means your liable for their damages or not paying the rent. Doesn't seem worth the risk for squeezing an extra $100 out of your roomate.

Lastly the other option is paying upfront for several months of rent. When I first started renting out my first place I was really concerned with getting someone who paid rent and on time as you hear all the horror stories. Looking back it would have been stupid but being in a situation where I knew getting stiffed would sink me I would have gladly knocked $200 to $250 off rent for every month prepaid. Glad I didn't but some people out there may do that

[redbeard]

If you can manage to buy a place and rent it out, you could be making serious cash.

I have a friend who stayed in our college town for work.

He bought a 5-bedroom house and rents out the other four rooms to college kids. The total rent coming to him is a few hundred dollars more than the mortgage every month, so he is actually getting paid to live there, on top of building his assets.

Now this is an extraordinary outlier. But if you plan to stay in an area, know the market, have cash for a down payment, and don't mind roommates, this is a great option.

[Engineer]

Make it easy for that mom and pop renting to you:

I'm a very low-impact tenant, I just want a quiet place to read and relax
Great reference from previous landlord
I'm handy and fix little things myself, I'm not going to bug you about things
I love this neighborhood, I'm staying long term
No pets, except for the occasional overheated hamster

You want them to get a good vibe; dress up when you talk to them, all the usual negotiating tactics

I rented a house and after a year put together a spreadsheet of how little sex I was getting, oops I mean what the market actually was: real addresses nearby with real quoted rents and the guy dropped like 10% on the spot when I asked for a discount. Might be related as to why: later on I figured out this dude was not paying the mortgage as there were a bunch of people calling and knocking on the door looking for him at all hours. I drove out to his place to ask about it, since he had long since stopped answering the phone, and in a haze of sweet ganja smoke he sheepishly admitted it, then never stopped by to pick up the final check. Deadbeat landlord discount!

[jamaicabound]

Not to knock anyones hustle because if your doing something unique and making money more power to you but I agree with sevral other posters who have said if you want to do this buy the place and reap all the rewards vs just skimming a little off the top and taking on all the risk.

Here's my point. If you buy a place and rent out rooms not only are you getting your mortgage paid and building equity, your also probably making a few hundred extra on top of what the mortgage is. By doing it this way and renting a place from someone else, to then rent out yourself your paying their mortgage and property taxes, your probably putting a few extra bucks in their pocket, and you get to live rent free or skim a bit off the top. If you do this yourself you get all the benefits.

A few people have mentioned similar strategies to this recently and I'm surprised nobody is concerned about the liability. YOur basically bringing several strangers into a house together. I'm guessing they don't have leases with the landlord your renting it to them either sorta unoficially month to month or maybe you make up a lease. Either way, if the house gets broken into or if your tenants steal the other tenants xbox, tv, etc guess who they are going to come to? You, your their point of contact. Why bring this potential liability and headaches upon yourself for a relatively small profit.

Just to make an analogy before fiverr was popular I tried a little hustle selling like FB likes, Twitter Followers, etc. I was basically buying gigs from fiverr and resellign them for $10 or $15. Now granted I was making a few bucks but ost of the profit was going to the guy I was buying from. I'm doing all the legwork and after Fiverr fees making $4 and sending this guy all the gigs. If I was smart I would have figured out the software end of it, created the likes myself and pocketed the whole $10 or $15 I was charging instead of making $4 myself and giving hte majority of profit to another fiverr seller.

I would say this landlord hustle is the exact same thing I was doing with fiverr gigs. Buy the place yourself, cut the landlord out of it and make some money as well as building equity.

[jimukr104]

NYC is a TALE OF TWO CITIES. We have the rent stabilized apts = to about 40% of the apt stock and then we have the normal market rate apts.

So literally one person could be paying 2-3 times what their neighbor pays. Example, my aunt paid 1400 for a 1 br room apt with doorman on 57th and Lex. Anyone who knows NYC , you know that is maybe one of the most expensive blocks in the city.
My own apt is 50-60% below market rate.

I read an article that says it is basically a tax for people being allowed to move into our great city...you subsidize the other 40% lol.

That being said it is hard to profit on them. Legally you can't rent them on airbnb. You also can sublet for every 2 out of 4 years but you can only charge 10% more than what you pay for furniture usage. Violations will get you evicted.

Also if you get a roommate you can only legally charge them an equal share. Plenty of stories where the roommate or sub tenant complained to the housing authority or landlords.

Other way to get cheap rent is if one is low income they can try to win the lottery on new luxury buildings that set 20% of apts to the side for low income.


Oh year you can move to the projects.

[Drazen]

For me, I was looking for a little over a month. Different places everyday, trying to find the right magical "number" before submitting an application. I slept on my friend's couch and left all my clothes in the trunk of my car. Eventually, something opened up and I have rent control and it all worked out well, been there 12+ years and right now I'm paying probably 30-40% under current market prices (well, the new rental units next to me are 40% more than what I'm paying now).

If I were to do it now, it'd be damned near impossible though. I'd probably go to a "lesser" area that I figure may get better over time and plant some roots.

[Yeti]

Drazen, why would be it be damn near impossible? What changed? Are you in NYC?

[jamaicabound]

(09-30-2014 05:59 PM)Drazen Wrote:  

For me, I was looking for a little over a month. Different places everyday, trying to find the right magical "number" before submitting an application. I slept on my friend's couch and left all my clothes in the trunk of my car. Eventually, something opened up and I have rent control and it all worked out well, been there 12+ years and right now I'm paying probably 30-40% under current market prices (well, the new rental units next to me are 40% more than what I'm paying now).

If I were to do it now, it'd be damned near impossible though. I'd probably go to a "lesser" area that I figure may get better over time and plant some roots.

What's the deal with rent control? We don't have that where I'm from. So what happens if I buy an condo from someone who's been renting the place to someone for 10 years. I'm stuck charging rent from 10 years ago when I paid todays housing prices? I know from Seinfeld and other new york television shows people acting like they are their dead grandma to get cheaper rent but never really understood what rent control was all about. I know I could wikipedia that shit but just curious an insiders take and experience vs just the definition.

[Drazen]

(09-30-2014 07:00 PM)Yeti Wrote:  

Drazen, why would be it be damn near impossible? What changed? Are you in NYC?

LA Rental market is saturated and overpriced, at least in the good areas. The places I've looked at in 2000 or 2001 are now doubled. I haven't tried looking since I'm looking to move myself, but I have friends paying $2000+ for a one bedroom and its pretty rediculous.

[Drazen]

(09-30-2014 08:04 PM)jamaicabound Wrote:  

(09-30-2014 05:59 PM)Drazen Wrote:  

For me, I was looking for a little over a month. Different places everyday, trying to find the right magical "number" before submitting an application. I slept on my friend's couch and left all my clothes in the trunk of my car. Eventually, something opened up and I have rent control and it all worked out well, been there 12+ years and right now I'm paying probably 30-40% under current market prices (well, the new rental units next to me are 40% more than what I'm paying now).

If I were to do it now, it'd be damned near impossible though. I'd probably go to a "lesser" area that I figure may get better over time and plant some roots.

What's the deal with rent control? We don't have that where I'm from. So what happens if I buy an condo from someone who's been renting the place to someone for 10 years. I'm stuck charging rent from 10 years ago when I paid todays housing prices? I know from Seinfeld and other new york television shows people acting like they are their dead grandma to get cheaper rent but never really understood what rent control was all about. I know I could wikipedia that shit but just curious an insiders take and experience vs just the definition.

Its different in every jurisdiction, but for me they can only increase my rent 3% per year. I was reading a little more into it, I think I get better protection as a tenant like if they were remodeling, etc as well.

[Yeti]

Rent control, as mentioned earlier, helps to create a tale of two cities.

Landlords cannot charge market price rent on units that are rent controlled.

So they make it up by charging more on non-controlled units.

Non-controlled renters essentially subsidize those who were lucky enough to snag a rent-controlled unit.

That's not the whole story but that's a good start.

I agree, the NYC real estate market is really out of control. Things are beyond expensive but at the same time some people have access to cheap units because of their dead grandmother or whatever. I plan to write a datasheet on this topic and others related to getting set up in NYC.

Then of course you have people in rent-controlled units, or in public housing under the NYCHA (cheaper apartments for like $1,000 or less per person in prime areas) renting out their place on Airbnb. $200/night in Airbnb income for their place, subsidized by taxpayers. Versus the $450 per week that they make by working at Rite-aid.

I'm exaggerating a bit but you get the idea.