Comments on: Oddball mortgages make their own fundamentals.

By: J

Wed, 22 Aug 2007 21:16:00 +0000

Your liability is not limited to the damage deposit but I doubt that would stop someone from using the subletting scheme I described. Understand I'm not saying I'd rush out and do it just that I can't believe people arn't doing it if the profit is as high as people are claiming.

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By: freako

freako — Wed, 22 Aug 2007 19:46:00 +0000

But the thing is you only risking your damage deposit when you sublet so you worst case scenario is not so bad. Since when are potential damage liability limited to the size of the damage deposit?

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By: freako

freako — Wed, 22 Aug 2007 19:44:00 +0000

hey freako, how much does elopinp cost? $43.78

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By: satv

satv — Wed, 22 Aug 2007 16:35:00 +0000

freako,I think foreigner buyers and out of station buyers just hand over their units on lease to real estate agents or rental agencies on current market price,and I beleive they have to pay almost 15% of total rents to agents,but owners get satisfaction that some one taking good care of their units.so anything else like increase or decrease in rents is depend on demand and supply,thats the area where agents can make or break their profit, but because of lease agreement rental rates does not effect the then market,when owner pass their units to agents.

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By: digi

digi — Wed, 22 Aug 2007 15:42:00 +0000

hey freako, how much does elopinp cost?

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By: digi

digi — Wed, 22 Aug 2007 15:41:00 +0000

I don't know if its widespread or not, but I know personally of many people that have some iffy loans - I've worked with two freelancers that don't have work lined up beyond the month that just bought based on the premise that their current income is permanent. I know of two others who've gotten letters stating that their income is higher than it actually is and been offered the same by my employer. I've told them I'd rather have the actual money than a letter pretending I do.

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By: J

Wed, 22 Aug 2007 15:36:00 +0000

Could it be that there are hidden costs associated with foreign students But the thing is you only risking your damage deposit when you sublet so you worst case scenario is not so bad. Imagine this I rent out a place at 1250$/month paying one months rent as a damage deposit. I then rent it at 2500$/month. I'm making pure profit after 1 month even if I lose my damage deposit and I was so foolish as to not require a deposit from the people I subletted to. In short that sort of situation just does not exist for long if at all.

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By: freako

freako — Wed, 22 Aug 2007 15:15:00 +0000

thats already in action since decade. Then why does it persist? Wouldn't competition cut the profit until it was barely worthwhile? Could it be that there are hidden costs associated with foreign students (turnover, damage, elopinp).

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By: bullsrproductive

bullsrproductive — Wed, 22 Aug 2007 14:47:00 +0000

Well, if it wasn't, why bother owning real estate? Just rent a place, then sublet it to foreigners for double the rent. 8/22/07 2:07 PM thats already in action since decade.

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By: J

Wed, 22 Aug 2007 13:51:00 +0000

Yes, but it represents an average. I agree. The thing is that the deviation from the average can't possibly get too high or arbitrage as freako suggests becomes a very real possibility. If the difference is even 600$/month I would have a hard time believing it isn't being done already. Since arbitrage has the effect of increasing market effeciency we can expect that any ineffeciency (what low rents are still available) will disappear shortly and rents would trend toward the mean very quickly as all the low rent units are locked in by those intending to sublet.

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