When you turn left onto River Ridge Drive off of Washington Road, then make another left onto Brookwood Drive, you’ll find yourself in an Augusta, Ga., neighborhood called National Hills. The neighborhood consists mostly of one-level brick homes until you reach the corner of Brookwood and Smith Creek Road, where past a wall of towering pines sits a beautiful, completely renovated home that looks nothing like the others around it. Kathie Williams bought the property in December 2021 and fixed it up with rentals in mind, a nine-month, $250,000 process that will be well worth the wait come April, and the April after that, and the April after that.
“When I tell people where it is, they’re like ‘Oh,’ ” Williams says, “but then they see it and the location.”
Williams’ property is about half a mile from Augusta National Golf Club, which hosts a certain tournament that welcomes one week of chaos that keeps the town afloat for the other 51.
YOU’VE PROBABLY HEARD BEFORE that some Augusta residents pay off their mortgages with money they get for renting their homes during Masters week, that they all make a run for it when the world’s best golfers come to town, bailing for Disney World with the kids or Myrtle Beach or St. Simons Island, that spring break at every school in the area revolves around Masters week, that most of the actual residents can’t even be bothered with what is the most well-known golf tournament in the world happening right in their backyard. All of this is true.
The town doubles in size, and those folks need a place to stay. The Augusta hotel business certainly booms during Masters week, but the town doesn’t have enough of them to lodge everybody. The Masters rental-home business is big, one that has existed in some capacity since the mid-1970s, when Augusta National and the Chamber of Commerce got together to figure out how they were going to house all the people interested in coming to watch Bobby Jones’ small gathering of friends. It has become a rather large gathering since, to the point where one agency, Jane Fuhrmann’s Tournament Housing & Events LLC, has more than 2,000 properties in its system as options for Masters renters.
Fuhrmann knows the area and its golf history as well as anyone. The former director of the Masters Housing Bureau began her business in 1998. Fuhrmann works with clients from all over the world, including many of the premier players, their families and support staff, as well as corporate clients who pay big bucks for the best homes. Despite being run strictly for Masters week, it is a full-time business.
Fuhrmann’s service entails much more than just setting up dinner and a car service to get guests to and from the course. She brings in all-new linens for each home, and the owners essentially begin prepping the home in January, including everything from pressure washing to planting new flowers to bringing in pine straw. Once Fuhrmann received a call from a player’s agent who notified her that the player’s plane was arriving early, and the player was coming with his family. Fuhrmann raced over to the home the player had rented to bring a baby crib, only to find out that the crib didn’t fit through the doorway of the baby’s room. She went next door and asked a gentleman doing landscaping for another home to help Fuhrmann deconstruct the bed, then re-assembled it in the baby’s room just as the player and his family walked through the front door.
Fuhrmann breaks the homes into three categories: “host” homes, “dinner” homes and “sleeper” homes. The host homes, which can go for anywhere between $30,000 and $70,000, are where all the guests convene at night, typically for a corporation, and usually come with Masters badges. Fuhrmann builds the “sleeper” homes around the host home so that guests don’t have to schlep all the way across town after an evening of entertainment. It’s not out of the realm of possibility that one corporation could rent out three homes in proximity to one another, one used strictly for gathering in the evening (a host home) and the others for resting heads at night (a sleeper home). The dinner homes, which go for significantly less than hosts and sleepers, are usually reserved for smaller groups of 10 to 12 guests and receive much less wear and tear.
Players are not averse to renting multiple homes, either. Rory McIlroy normally rents a “family” house and a “staff” house. McIlroy used to rent in the West Lake community, one of the neighborhoods Fuhrmann works with. However, after staying in the same house for seven years, McIlroy needed a different vibe. “All I remembered was walking out of that house disappointed,” he says. “I needed to change it up.”
A vibe switch, proximity to the course and a huge kitchen for a chef to operate in are all things players consider when looking for a home during Masters week. Fuhrmann says many players used to prefer the historic areas surrounding the golf club, but now players want “new” homes, which are hard to find in those areas. Hayley Mack’s home in Summerville blends historic and new together seamlessly, though it’s a bit out of the price range for even the most financially well-off players. (Mack will say only that it’s six figures for the week.) Mack and her husband, Darren, bought the colonial home, built in 1906, in 2016. They added 3,000 square feet (the home is now 8,000 square feet), a guest house, a basketball court, a putting green and a golf simulator. Unlike the Williams’ home, this is the Macks’ actual home, which they rent out only one week a year. Everything you see when you walk inside is custom, from all of the furniture to the wallpaper that was hand-painted in France. “Our goal was to have stuff where nobody could walk in and say ‘Hey, I have that,’ ” Mack says.
That extends to the gourmet kitchen, which required a complete gutting, the master bathroom, the “Kim Kardashian closet” and the stunning outdoor area, which features a custom gunite reflection pool. An indoor-outdoor living room connects to the main house, giving it a very Los Angeles-type feel. The “man cave” has a golf simulator, a lounge area and a full bar that looks less like a man cave and more like a Ralph Lauren Polo Bar, according to Mack.
“There’s not a lot of homes in this area that look like ours and rent for Masters,” she admits. “We did this because we saw it as an investment for our family. We obviously get a very big number for Masters week.”
Mack cannot reveal the identity of her guest because of a non-disclosure agreement, indicating this is serious business. She does say it is a billionaire philanthropist, one who is “not Justin Timberlake famous, but billionaire famous.” This is the second different billionaire the Macks have rented to, which makes sense given the price tag. The first renter, worth $6 billion, brought only his two sons and his chef and asked for nothing but peanut butter and oatmeal—an ideal guest. The Macks did, however, have one bad experience before the renovation. A well-known beverage company rented out the home and, as Mack puts it, made it the party home for the week. When Mack returned, her housekeeper greeted her at the door and said, “Don’t panic.” Mack stood there, cried and thought, Never again.
She changed her mind, and now their investment is paying off. The best part, not just for Mack but for all the residents who rent out their homes, is that the rent is tax-free thanks to “The Augusta Rule,” which allows homeowners to rent out their homes for up to 14 days a year without needing to report the rental income on their individual tax return. This rule was originally created to protect Augusta residents for Masters week, though it now applies to any taxpayer who owns a home in the United States, provided the home is not a primary place of business.
The Augusta Rule is of great importance for homeowners who, unlike Mack, don’t command six-figure sums for their properties. Take Janienne and Garth Brey, for example. They bought a house on the Savannah River for about $300,000, and once the couple is finished renovating the “Riverfront Retreat,” as it’s referred to on VRBO, they expect to fetch something in the range of $600,000, though in the meantime they gladly rent it throughout the year and during Masters week. This year will be the fourth Masters the Breys rent out the house, and although it’s not a Summerville mansion, one can’t help but envision kicking back after a glorious day at Augusta National and looking out at the river. The house has four stories with four bedrooms and three baths and a glass sunroom overlooking the water that sits on top of a fully furnished deck. This sunroom is where last year ’s renters, a CBS news crew, spent the bulk of their time working on a report about Tiger Woods for CBS news.
Interestingly, the Breys didn’t even know about the Masters when they bought the place. “During the process, the Realtor told us, ‘You know, you can rent out your house for the Masters,’ ” said Janienne Brey. “We were like . . . ‘What?’ ”
WILLIAMS’ FIVE-BEDROOM PALACE is inviting from the street. A long walkway through the soon-to-be perfectly manicured front yard leads to a brick staircase that climbs to the front deck. The front door opens to a first floor that feels like one big room. The state-of-the-art kitchen is situated to the right, and the living room is straight ahead. Sliding glass doors offer a view of the backyard. The outdoor area features a propane fire pit and more than enough room for the type of outdoor activities that always require a beverage in one hand. Should the weather not cooperate, or if guests are just looking for a different place to hang, the upstairs media room, complete with an 80-inch TV, is the relaxation zone.
Williams says she got a verbal agreement from a player this year, though he couldn’t yet be locked in for multiple years because he’s not sure he will be back in 2024, so we know the mystery man is not a Masters winner. That said, a two-time Masters winner has stayed in the house before, something Williams did not know. The previous owners, the Witt family, and their daughter, Chris, had some stories to share. “We were fortunate,” Witt says, before casually breaking the news that Seve Ballesteros had made their home his go-to spot for multiple years in the early 1980s.
Ballesteros would come a week early, along with his manager, his father and sometimes his brothers, for practice. Witt’s mother always made sure to prepare a big meal for one of the nights (Louisiana catfish was a huge hit for the Spaniard who grew up in a fishing town), and her father would always make a big breakfast. Ballesteros and the family became friends, but the Spaniard was not shy about asserting himself in their house. Once Witt used the TV remote to put on the NCAA Tournament; March Madness was popular with their family. Ballesteros came in, grabbed the remote from her hand and said, “Golf.” Witt’s mother told her to find another room to watch the hoops in.
Williams doesn’t realize how big of a selling point “the house Seve stayed in” is, but she may not even need to. On VRBO, where I first found Williams’ home, it was listed on a normal week for about $2,500. For Masters week, Williams estimates she’ll get $30,000. Williams, who has rented out different homes in the past, puts some of the money back into the house, then uses the rest to invest or to go on vacation. Hilton Head, Italy and Hawaii have all been checked off. This year, she’s thinking about a cruise—anywhere that isn’t Augusta on Masters week. “The area is just pandemonium,” Williams says.
Steve (Pepsi) Hale knows this, which is why the former caddie for Keegan Bradley decided to buy his own place in town after falling in love with the area after a few trips to the Masters. Hale first experienced the Masters in 2008 when his boss at the time, Johnson Wagner, won the Houston Open and earned a last-minute invitation into the field. Hale bunked with a few caddie buddies who were renting a townhouse from a grandmother. The townhouse was one of 12 units that are right behind The Fresh Market, and over the years it had become the caddie house.
In 2016, one of the units went up for sale, and Hale made an offer that was accepted. Two weeks later, Bradley fired him. Hale bought the unit anyway. Now on the bag of Richy Werenski, Hale has not worked the Masters since, and he’s beginning to think that if he wants to get back inside the gates, he should sell the townhouse to reverse the bad mojo. For now, he treats the place like a 1957 Chevy, going back and forth for weeks at a time to do work on the house. “I patch some drywall, throw another layer of paint on, replace a sink, whatever,” he says. “I enjoy going there for a week.”
He uses the place to take care of his fellow caddies when they come for the tournament. Hale has full-time renters, too, and they usually vacate the premises for anywhere between seven and 10 days on Masters week. He gives them a month of free rent for their troubles. Hale’s original intention was to be back every year, and it still is. In the meantime, he’s perfectly fine with the extra income, and if and when he no longer has a full-time job on tour, he has dreams of living in Augusta for a season or two and looping at the golf club.
“I’ve already had a couple of those preliminary conversations and approvals,” he says. “In a perfect world, yeah, I would go there for a few years, tell a story if I’m allowed to and take care of the place.”
Taking care of the place is something all residents of Augusta take seriously for 51 weeks out of the year in preparation for a tournament many of them likely never even see in person. Then, for one week, they gladly leave and welcome visitors who would otherwise never drop in on this golf mecca. All the homeowners ask for, outside of big-time money, is that the guests take care of the place, too.
When Tanner McCraney went back to his dorm after being dropped off by his parents for his freshman year at Rhodes College, he found that his mom had left him with seven lamps.
In order to free up some space in the dorm, McCraney, now a graduate student at the University of Mississippi, decided to look for ways to sell them online, but faced scammers and dangerous situations when meeting with sellers.
Together with Patrick Phillips, a fellow graduate student at the University of Mississippi, McCraney co-founded a free app called Rumie that helps college students safely sell, buy or rent items online with other students.
“I saw a solution by creating a unified, safe way for college students to buy and sell what they need during their life in college. College students have lots of events and are moving almost every year,” McCraney said. “We have created the safest marketplace where students can connect with other students.”
Rumie allows students to exchange clothes and furniture without worrying about getting scammed or meeting up with the wrong person. Rumie stays secure by making students sign in with their college-affiliated emails. This way, students are only connected with other verified students. Now, McCraney and Phillips are bringing their app to other campuses.
The app includes a marketplace feature where students can buy tickets, textbooks, clothing, electronics and furniture as well as a rental feature. Many women have taken advantage of the rental feature, and according to McCraney, around 80 dresses are rented a week.
First launched on Jan. 21, 2022, Phillips and McCraney entered Rumie into a business competition. Although the competition didn’t go well, they stayed determined.
“We entered the business competition and got smoked. After we had two options, we could either quit or really lockdown our idea. We decided to spend all summer working on it and the rest is history,” McCraney said.
Olivia Harbin, an ambassador for Rumie and a senior marketing major at UGA, first heard about Rumie from one of her friends at Ole Miss. As an ambassador, her job is to get the word out about Rumie and how it can help college students.
“It’s the app a bunch of college students have been looking for. We see people make Instagram accounts for renting clothes, posts on Facebook Marketplace, Craigslist or GroupMe. Rumie is perfect because not only is it safe and reliable because you sign up with your university email so it’s just for students, but it’s also just all in one app,” Harbin said.
By Savanna Young For Daily Mail Australia
01:46 20 Mar 2023, updated 03:17 20 Mar 2023
An influencer and reality star has been forced to vacate her apartment in Sydney‘s east after her landlord increased her rent amid the city’s rental crisis.
Bella Varelis, who was a finalist on Locky Gilbert‘s season of The Bachelor in 2020, says she has no choice but to move out of her Vaucluse unit because of the prohibitively expensive rent and allegedly poor standard of property management.
The 28-year-old slammed her landlord for increasing her rent ‘by $400’ per week and claimed they never fixed faults with the home.
‘Not moving out because I want to, but my owner never fixed anything in this place and then tried to put the rent up by $400 a week so it was a hard no for me,’ she said on Instagram on Sunday.
‘The only good thing about this place was the view.’
Ms Varelis went on to list the issues she’d been having with the apartment.
‘The dishwasher was broken, [the] fly screens were broken, [the] top lock on the door was broken, [the] oven had no symbols on the dials for temperature, [and] the balcony door never closed properly,’ she said.
‘[It] was actually horrible but it served a purpose in my life for the last year.’
The top-floor two-bedroom apartment is currently available to rent for $1,150 per week with a $4,600 bond.
According to its listing, the property boasts ‘wonderful ocean views’ and a ‘kitchen with modern appliances, including a dishwasher’.
There is no mention of the dishwasher being broken.
Ms Varelis’ rental issues come six months after she split from her photographer ex-boyfriend Will Stokoe in September last year.
Rumours circulated last December they had rekindled their romance after they were spotted out for dinner together in Sydney.
But if they did get back together, the reunion was short-lived because Ms Varelis later said on Instagram she was single and not looking to settle down anytime soon.
At the time of announcing the pair’s split, the model said she was going through a ‘tough time’ adjusting to life without Mr Stokoe.
‘Personally, I’m not coping well, so if you could please respect our privacy and give us some space during this time it would be much appreciated,’ she said.
Ms Varelis said she initially wanted to keep their split private, but had no choice but to address it publicly due to her celebrity status and the ‘constant questions’ from fans.
‘I feel like it’s best to answer this once so the prying will stop because it’s really affecting me by being asked about this daily,’ she said.
‘Will and I decided to take some time apart and go our separate ways to focus on ourselves.
‘We have so much love and respect for each other but this is just what’s best for both of us now.’
Ms Varelis shot to fame on The Bachelor in 2020, placing runner-up on Locky Gilbert’s season.
Gilbert chose nurse Irena Srbinovska as his winning contestant, and the couple tied the knot in Melbourne earlier this month.
- EXCLUSIVE: Former Towie star Ferne McCann has put her luxury four-bed home in rural Essex up for rent
- The reality TV star, 32, broke down during interview about her infamous voice note ‘about acid attack victim’
Pregnant Ferne McCann wants to quit her home following her voice-note scandal – and has put it up for rent for £5,000-a-month.
The former Towie star, 32, has put her luxury Essex four-bed up for rent with estate agents Barringtons for £1,142 a week.
And publicity pictures of the available property leave little doubt of who lives there – as Ferne’s daughter Sunday’s name can be seen clearly on a toybox.
With another baby on the way it is possible that the model needs more space for her ever-expanding family.
Pictures of the house on the estate agent listing show off the life of luxury Ferne enjoys there.
There is lots of character in the property, including a rather unusual bed in one of the rooms.
The garden is one of the stand-out features and boasts an expertly manicured lawn as well as tidy patio.
There is also another outdoor space area for residents and guests to chill out in and enjoy a drink or bite to eat.
If you are more active, you no longer even need to step out of the door to get the rush from exercise.
The property boasts its very own gym, complete with a treadmill and a weightlifting bench.
One of the four bedrooms is decorated in subtle shades but has a fabulous view out into the countryside.
And even the loft has been utilised as an office space with a computer set up and a table to discuss business.
On Wednesday Fearne broke down in tears on This Morning as she discussed her leaked voice notes scandal.
The pregnant reality star, 32, described it as her ‘lowest moment’ and admitted she has been in therapy since the incident.
In November 2022, an anonymous Instagram account, called Lady Whistledown after the Bridgerton secret gossip sharer, posted a series of voice messages from a woman they claimed was Ferne.
One heard a woman’s voice label one of acid attacker Arthur Collins ‘ victims a ‘silly b****’ while another saw Ferne accused of body-shaming Sam Faiers.
Ferne, who is expecting her first child with fiancée Lorri Haines, 31, said that she was a ‘different person now’ and that the infamous recordings happened six years ago when she was in a ‘vulnerable situation’.
The former TOWIE star, who is already mum to daughter Sunday, five, was shown a clip from her ITVbe show First Time Mum, which documented the breaking scandal and aftermath.
Struggling to watch, Ferne said: ‘I wear my heart on my sleeves and I like to be transparent with my viewers’.
‘I have to let the cameras and it really is warts and all. I can’t just not include the difficult times.’
She went on to describe the incident as not her ‘finest hour’ and revealed she had attempted to contact those hurt by the incident.
‘It wasn’t my finest hour, it was a difficult time of my life.’
‘I need to take this opportunity again to apologise publicly again, and I have reached out to those people, but it is a criminal investigation so I can’t say too much’.
She continued: ‘The voice notes were from a time when I was in a very vulnerable situation about six years ago, I have been in therapy for six years since, I am a different person’.
In a bid to find some positive in the sad situation Ferne said: ‘I know my story will be able to help a lot of women and until then unfortunately I can’t say too much.’
Ferne previously revealed that her new series will ‘address’ the voice notes leak, but cannot reveal the ‘full truth’ due to legal reasons.
Speaking on This Morning she again referred to the ongoing investigation: ‘I understand that it is really confusing, and I have this burning desire to share everything that happened to me and why I said these things but I can’t, there will be a time when I can so I hope that people can be patient with me until then.’
Going on to praise her reality show as a distraction and focus during the uproar: ‘Of course, I was hurting it was some of my lowest moments, first time mum has been a lifeline for me.’
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It comes after filming on the series resumed following claims she made derogatory comments about ex-partner Arthur Collins’s acid attack victims.
It was claimed ITV bosses are backing Ferne amid her leaked voice note scandal.
A source told The Sun in November: ‘Ferne is resuming filming for First Time Mum and is heading to India.
‘She is booked to fly out of the country today and is taking a film crew with her.
‘Initially plans for filming were paused as the voice note scandal unfolded. However Ferne has the backing of her ITV bosses and filming will start in the coming days.’
Ferne previously faced calls for her show to be axed after an anonymous Instagram account leaked voice notes allegedly sent by Ferne , in which a woman’s voice labels one of acid attacker Arthur Collins’ victims a ‘silly b****’.
It has been claimed they were referring to Sophie Hall, who reached the final of a Miss England final 15 months after the sickening attack, baring her scars.
Collins is currently serving 20 years in prison after he threw acid in an East London nightclub in April 2017 and injured 14 people.
Ferne was blasted by acid attack victim Sophie Hall, 27, for her recent ‘insincere’ apology after calling her ‘ugly’ in the leaked voice notes.
Ferne admitted she was the voice in shocking audio files, but claimed she recorded them because she feared ‘serious harm and in the face of significant threats’.
Sophie has since demanded Ferne says sorry to her on camera while alleging she wasn’t able to read the statement since Ferne blocked her on Instagram.
She told The Sun: ‘To me her words feel so insincere. Ferne is simply trying to salvage her career. I don’t think she is sorry at all.
Ferne wrote in her online statement: ‘I am aware that people will have a number of questions about the voice messages being put into the public domain and purportedly sent by me.
‘I feel I have no choice but to address these (to the extent that I can as there are restrictions on me which I explain below).
‘Most importantly I want to apologise to all the victims of Arthur Collins abhorrent actions in 2017 that they have to relive that night and the pain that followed because this matter is again in the public domain.
‘In particular I want to apologise to Sophie Hall. I do not believe her to be ugly or stupid. She has been brave beyond belief.
‘Arthur Collins’ crimes created genuine victims so I am not trying to portray myself as one. I am unable to say much because there are important and significant legal proceedings that prevent me from setting the record straight at this stage.
‘What I can say is that the voice messages that are being released are manipulated; edited and taken entirely out of context.
Even so, I will have said things that are untrue and I did not believe – but I did so to protect my family and myself from serious harm and in the face of significant threats.’
The audio clips aren’t the first to circulate the internet, with the reality star previously accused of slamming and body shaming friend Sam Faiers.
In a statement shared with MailOnline, Ferne called the scandal a ‘harassment’ campaign against her, as well as offering her sympathies to those offended by the remarks.
“Oh, mummy ji had called,” she replied. “The signal here was weak, so I stepped outside to talk to her.”
“An early morning call from her is never good news. What did she say?”
“Well, she was saying that we should buy a flat. This living on rent was a waste.”
“Ah, the usual.”
“Not really,” she replied.
“Why?”
“Because this time she offered what she thought was financial logic.”
“When emotion stops working,” he said. “So, what was this logic?”
“It seems the rent that we pay every month is going waste, given that we are not using that money to create an asset out of it. On the other hand, if we pay an EMI towards a home loan, we will end up owning a flat and create an asset.”
“I had never thought about the issue in this way,” he said. “Guess for once she makes sense.”
“She doesn’t.”
“Doesn’t?”
The math
“Take this flat that we live in. We pay a rent of ₹20,000 per month or ₹2.4 lakh a year. The market price of the flat is around a crore. If we were to buy it, we would also have to pay a stamp duty of 6%, which means a price of around ₹1.06 crore.”
“Ah, maths early in the morning,” he said.
“So, we pay ₹2.4 lakh to live in a flat that would cost at least ₹1.06 crore. This means the rental yield is 2.3% ( ₹2.4 lakh divided by ₹1.06 crore expressed as a percentage).”
“Where are you going with this?”
“Now, let’s say we decide to buy this flat and take on a home loan of ₹80 lakh. Further, we offer ₹20 lakh as a downpayment and ₹ 6 lakh as stamp duty. So, we need to pay ₹26 lakh from our savings. There is a cost attached to all this.”
“Of course, an EMI will have to be paid.”
“Let’s say we pay an interest of 9% per year for a home loan to be repaid over 20 years. The EMI on this works out to around ₹72,000 per month, or around ₹8.64 lakh per year. Also, there is an opportunity cost of making the down payment and paying the stamp duty.”
“What opportunity cost?” he asked.
“That amount of ₹6 lakh could otherwise continue to remain invested and thus earn a rate of return. If we were to invest it in a fixed deposit at the rate of 7% per year, we will earn an interest of ₹1.82 lakh on it. We add this to the ₹8.64 lakh EMI and the total amounts to ₹10.46 lakh.”
“I can see where this is going now.”
“So, we pay ₹2.4 lakh to live in this flat right now. In order to own it, we will end up paying ₹10.46 lakh. Of course, the interest of up to ₹2 lakh paid on the home loan can be deducted while calculating the taxable income. That should bring down the cost of owning this flat to slightly less than ₹10 lakh for a while. Further, we will no longer have to pay rent.”
“Which is why the idea that we aren’t creating an asset out of paying rent basically doesn’t make any sense,” he said. “So, this means that it doesn’t make any sense to buy a flat?”

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Nine reasons to buy
Now when did I say that?” she responded.
“You just did.”
“Not at all. I was just trying to show that mummy ji’s theory doesn’t work.”
“So, does it make sense to buy a flat or not?”
“It depends.”
“On whom?”
“The family buying it.”
“Like how?”
“Well, there are quite a few advantages if one is buying a flat to live in it.”
“Tell me.”
“First, one does not have to live in the insecurity of having to vacate when the rental agreement runs out.”
“Yes,” he replied. “Thankfully, this time around, we managed to sign a three-year agreement.”
“Second, families with children need some stability. Children need to continue going to the same school. Have a set of friends. And so on.”
“Makes sense.”
“Third, the same applies to retired parents, if they live with the family. They also need their stability, a set of friends, a family doctor they can visit on a regular basis, and so on.”
“Yes. And the feeling that their children are settled in life.”
“Fourth, every time you change a flat, the address proofs need to be updated. And that can be a real pain.”
“I haven’t forgotten the last time; you totally dumped it on me.”
“Fifth, in a rental flat, one has to live with the idiosyncrasies of the landlord and many societies treat tenants as second-class citizens.”
“Oh yes. Every Saturday the landlord turns up and he wants stock tips.”
“Sixth, single people have a really tough time looking for a flat.”
“Don’t remind me of that. I have some real horror stories. Once, a landlord asked me what do I do with chicken bones that remain after eating. “
“Seventh, every time you rent a flat you need to go through an agent. That means paying a commission. Now with the internet there is some chance of dealing directly with the landlord. Nonetheless, the best flats are still with agents.”
“That’s so true.”
“Eight, during the process of searching for a new flat, you have to go through a set of prospective landlords, who may judge you for everything, from your eating habits to your religion.”
“Indeed.”
“Ninth, so many landlords expect a portion of the rent to be paid in cash. In the process, our hard-earned money gets converted into black money.”
“Now I almost feel like buying a flat,” he said. “Your arguments are spot on.”
Five reasons to rent
Hold on dear,” she said. “I have counterarguments to these arguments.”
“So, bring it on.”
“First, as I have already explained, there is an opportunity cost to buying a flat.”
“That you have.”
“Second, clearly, our young and restless lives will come to an end.”
“As in?”
“I mean, eating out every weekend will no longer be possible. Ordering dinner at the drop of a hat will have to stop. You will have to go slow on buying clothes. And me on buying books.”
“Yes, because we will have to pay the EMI,” he said.
“Third, if we want to buy this flat, we will have to really stretch ourselves financially. The other option is to buy something cheaper, but then that would mean moving away from this central locality which will lead to both of us having to travel longer to get to our workplaces.”
“Now, I hadn’t thought of that,” he said. “Basically, one can afford to live in a better locality on rent than one will be able to do while owning the flat because one can earn enough to pay rent but probably not earn enough to be able to pay the EMI.”
“Fourth, as and when we buy a flat, then our families will want us to get to the next level of being settled in life.”
“You mean have a baby?”
“Yes, and I am not ready for such a huge responsibility.”
“Neither am I.”
“Fifth, both of us have ambitions of doing a PhD in a few years. Hence, I think it makes sense for us to be physical asset light, until we figure out where we end up with our lives.”
“But we can always sell the flat, if and when we decide to do a PhD,” he said.
“Yes, we can. But selling a flat isn’t always easy. It takes time. Plus, by the time we get around to selling it, there will be an emotional baggage involved and two sets of parents who will be after our lives to not sell it,” she explained.
“That makes sense.”
“It has to. I have really thought through this.”
Twitter debates
You know, I have been following this debate on Twitter where people are arguing about buying a flat versus renting it and investing money through a systematic investment plan (SIP) in equity mutual funds (MFs).”
“What about that?” she asked.
“It seems it makes more sense to rent a flat and invest the difference—between the prospective EMI if one decides to buy that flat and the rent of that flat—in equity MFs, through the SIP route.”
“Hardly surprising. If you look at the RBI House Price Index, it has given a return of 9.6% per year from its inception in April to June 2010 to October to December 2022. Much of this return was until 2015. The return between December 2016 and December 2022 is just 3.9% per year. The return one could have earned by doing an SIP on equity MFs is considerably higher than this.”
“Hmmm.”
“Of course, the disclaimer here is that the all India real estate return is the average return of 10 cities, and returns vary across cities and across localities in cities. Nonetheless, unless one got a really cheap real estate deal, chances are one would have ended up better by investing in equity MFs.”
“So, those on the side of renting are right” he asked.
“Not at all. It’s actually stupid to use math here. It’s the kind of argument you often see being made on social media. If you hadn’t bought vests but invested in the stock of a company making vests. If you hadn’t bought hawai chappals and invested in the stock of a company making them.”
“And I thought you didn’t have a Twitter account.”
“I don’t, but I do know,” she said. “So, the point is one needs certain things at certain points of time in life.”
“That’s true.”
“So, if one feels the need to own a flat to have some stability in life and due to many of the other reasons I have already talked about, and one is financially in a position to make the down payment and has the ability to repay the home loan, one should go ahead and buy.”
“Hmmm.”
“In such a situation, the comparison with an SIP is basically being stupid. It fulfils the need of financial influencers to say simplistic things that can go viral and help them increase the number of followers on social media.”
Risks and rewards
What about investing in a flat in our hometown?” he asked.
“Looks like you have got a call from your mummy ji.”
“Yes,” he said. “She called yesterday evening when you were out for a jog.”
“I would rather invest in stocks, mutual funds, fixed deposits, gold, etc.”
“Why?”
“First, the ticket size of a flat is very big in comparison to all other forms of investment.”
“So?”
“If something goes wrong, the cost of that mistake will be very high.”
“Like?”
“Well, builders have been known to disappear in the past. Projects can get endlessly delayed. “
“But one can then take the builder to court?”
“Yes, one can, but it’s a fight between David and Goliath. In most such fights, Goliaths ultimately win or they can manage to drag the case for years.”
“How about buying a flat that is ready for possession and putting it on rent?” he asked.
“Rental yields largely vary between 2-3%. Why take so much risk for earning so little? Plus, we will have to take on a home loan to buy the flat. That means paying an interest of 9%. Then we need to pay an annual property tax, an annual maintenance charge to the society and so on. Plus, one will have to keep sorting out any issues that the tenant has.”
“How about buying a flat and keeping it locked?” he asked. “We can sell it whenever it appreciates.”
“I would hate doing anything like that,” she almost burst out. “You end up wasting so many things. Money, sand, cement, steel and, most importantly, water… It pains my heart to see lakhs of flats across our cities which have been bought and locked up. If they were opened up, the quality of life in our cities would improve quite a lot.”
“Calm down!”
“So, what else did my mother and your mummy ji have to say when she called?” she asked.
“Now that we have bought a car, we should buy a flat.”
“There we go again,” she said. “Their aspirations never end but it’s all about loving your parents.”
(The example is hypothetical).
Vivek Kaul is the author of Bad Money.
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In the thick of the pandemic, and three years after they immigrated from India, Mifrah Abid and her family were asked to vacate their townhouse in Milton so their landlord could sell it.
The order left them scrambling. Abid’s children were 10 and six, two of her family members were immunocompromised and prices had just started inching toward a pandemic rush. It became clear Abid’s family would have to leave behind the only connections they had as new immigrants. Even renting a single bedroom condo in Milton would cost $2,100 — far more than what they were paying for the three bedroom townhouse.
Rental prices in other cities weren’t particularly promising either. “It just didn’t make sense … we couldn’t go back to renting,” said Abid, an anti-racism advocate.
So they set out to buy a home wherever they could outside the unaffordable GTA. Abid and her husband, who is a web developer, ended up buying a townhome in Kitchener. “We didn’t have the great Canadian dream of owning a suburban house, it wasn’t something we envisioned for ourselves for at least the next 10 years,” Abid said, noting they had to borrow money from family. “It’s a privilege not everyone can afford.”
Even with high mortgage rates, she suspects her family would be paying a comparable price in the rental market, just without the security of ownership. “Homeowners are able to amass a down payment … that’s the only thing differentiating a homeowner from a renter these days.”
Despite facing a more expensive market, historic interest rate hikes and soaring inflation, many young families and millennials — a generation thought to have written off the postwar dream of a house and the picket fence — are entering the housing market to escape the insecurity and cost of renting. While they remain apprehensive about taking the plunge into ownership, some see it as the lesser of two evils.
In fact, it’s more dire to be a renter than a homeowner in Toronto for those born between 1981 and 1996, according to 2021 census data provided to the Star. Thirty-one per cent of millennial renters pay unaffordable shelter costs — shelling out 30 per cent or more of their income for housing — versus 24 per cent of millennial homeowners.
While home prices in the GTA have plunged relative to the market peak in early 2022, Toronto renters aren’t expected to receive similar relief. Instead, rental costs across southern Ontario have gone up by double-digit percentages in the last year, a trend experts don’t expect to change anytime soon. The Toronto region has 125,000 rental units scheduled for construction in the next 10 years — about 175,000 short of the projected demand.
For those lucky enough to challenge generational stereotypes about housing, escaping the precarity of the rental market is top priority, but it also comes with huge financial risks.
Kyle Todd, 35, and his partner had conversations all the time about how home ownership felt unattainable due to the never-ending price increases. He works in sales while she works for the Toronto Public Library. “We didn’t think it was going to be possible, we didn’t have a lot of savings,” Todd said.
But the couple hadn’t had the best experiences with landlords in the city, and felt like there was a lack of security with renting. At the end of 2020, when interest rates were historically low, Todd and his partner were able to cobble together a down payment using the RRSP he’d been building and other savings. Even then, their down payment wasn’t 20 per cent, and the couple knew they’d have to pay a lot in mortgage insurance.
“Anything we could get into is what we were going to do,” Todd said. “It sounds crazy, but that was the kind of desperation.” The couple locked into a fixed mortgage, and bought an older townhome in Mississauga by January 2021. “I have a lot of nervous energy about three years from now when we have to renew our mortgage,” he said.
“We know there’s some risk we might have to sell … and we might not make a ton of money if we have to.”
“Younger Canadians and newcomers of any age are demanded by this housing system to take on so much more economic risk with these massive mortgage debts,” said Paul Kershaw, a professor at the University of British Columbia’s School of Population and Public Health. He’s also the founder of Generation Squeeze, a think tank focused on addressing generational inequality.
According to Kershaw, in the mid-1970s, one would spend around $250,000 in today’s currency on a home in Toronto, with a salary of around $55,000. “The average price of a house was about four and a half times larger than the typical earnings of a young person.” Today, the average home in Toronto costs just over $1 million, and people are making slightly less, $54,000. “Now, the ratio is more like 20 to one.”
This increased burden of debt can be too much to bear, according to a recent study by an Ontario insolvency firm that found about half of all 2022 insolvencies were filed by millennials.
Despite the uncertainty about the affordability of his mortgage, Todd feels “incredibly fortunate” to own. He also feels guilty when he thinks of his friends who might not ever afford a home. “I feel like it’s just a broken system.”
Tim Capes, a 40-year-old principal engineer in the technology sector, intends to help his son Ben avoid the housing dilemma altogether. Capes bought his house in August 2021, a month before his son was born. “It seemed like the thing to do in face of endlessly rising rents in the city,” he said.
Capes said he isn’t centring his eventual retirement plan on the sale of his house. He plans to gift it to his son. “I want him to be able to do what he loves rather than picking a career solely for financial reasons.”
Buying a house ended up being a troublesome decision for his single-income family, considering Capes lost his primary job soon after the purchase, but not one he regrets. He also doesn’t feel invested in home prices rising to increase the value of his own house — being able to keep it is Capes’ main priority.
“What’s much more important is that home ownership becomes more affordable and accessible to people,” Capes said.
William Strange, an economic analyst and policy professor at the University of Toronto’s Rotman School of Management, said most economists would like to see more Torontonians with that perspective. “Buying a house because you expect it to appreciate in value is precisely what led the world to bubbles in the past,” he said. “And bubbles, when they burst, are incredibly disruptive to households and to the whole financial system.”
Amanda Ieraci, 28, had few expectations when she bought a one-bedroom condo in Fort York recently. “Trying to rent can get very crazy, very quick,” the marketing associate said, referring to her stint as a single renter. “I didn’t want a lot of my salary going to rent without the ability to budget for anything else in my life.”
After many nights spent with mortgage calculators, Ieraci determined she could purchase a condo, but would only qualify if her parents co-signed, due to the stress test. She’s glad she locked in when she did, because both current interest rates and rent prices would be near impossible to manage on her single income.
Declining house prices don’t really concern Ieraci, since she was able to stick to her budget with a small place. “I try to keep it modest,” she said about her 460 square-foot condo that overlooks a parking garage. “If I could get a window in my bedroom, that was success to me.”
Ieraci doesn’t view her home as an investment. “It’s more than that,” she said. “For young people, it’s such an achievement.”
“I just hope it gets easier.”
JOIN THE CONVERSATION
Markets with Madison: Precinct Properties is hiking rents by 17 per cent as workers return to offices, and Sky Television is considering launching a Neon ad-tier service to compete with Netflix. Video / NZ Herald
The commercial landlord that owns Auckland’s $1 billion Commercial Bay precinct and PwC Tower, is charging companies 17 per cent more in rent for new leases across its premium office buildings, the chief executive has revealed.
Scott Pritchard told Markets with Madison it increased commercial rents by that much last year upon renewal, but no company was struggling to pay – in fact, there was so much demand for office space, Precinct could push through more rent increases this year.
“We’ve actually seen levels of people in offices that we haven’t seen before Covid. Our portfolio is actually full.”
Precinct’s net rental income grew 9 per cent in the six months to December, although it suffered a 98.5 per cent drop in net profit as the valuation of its property portfolio fell by $53.6 million. While that was an unrealised paper loss, Pritchard said it was still of concern.
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Sky Television’s half year net profit also fell, down 7.3 per cent to $26.2m, as it announced a restructure proposal with 170 jobs on the line in New Zealand to increase resources offshore in India and the Philippines.
Its chief executive Sophie Moloney told Markets with Madison alongside the proposal and other cost-cutting considerations, it was considering launching a cheaper version of its Neon streaming service with ads to boost subscribers, following in Netflix’s footsteps.
She discussed the impact inflation could have on its subscriber growth as consumers looked to cut household costs.
Get investment analysis and insights from the experts on Markets with Madison every Monday and Friday on the NZ Herald.
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Disclaimer: The information provided in this programme is of a general nature, and is not intended to be personalised financial advice. We encourage you to seek appropriate advice from a qualified professional to suit your individual circumstances.
Sophie* and her partner are relieved to have a roof over their heads after a nightmare experience looking for a rental in inner Brisbane.
With their lease coming to an end, Sophie turned all her attention to finding a new place.
A two-bedroom unit within 10 kilometres to Brisbane’s CBD was the goal — somewhere close to both their workplaces.
Struggling to find a place within their price range in decent condition, Sophie stopped working in her job as an e-commerce manager to focus her days on looking for a place to live.
For two months she would wake up, check websites for new listings, contact agents, get on inspection lists, schedule inspections and, from 11am to 6pm drive around to inspections.
What she encountered was shocking.
“It was like a nightmare that we had to live every day,” she said.

Most of all, Sophie was disheartened by the more than 10 agents who encouraged her to offer more for the property.
Some were more blatant than others, though all of them would only address Sophie when they were not within earshot of other prospective tenants.
Sophie said one of the more popular ways of encouraging bids was for agents to say “you could offer what you think the property is worth”.
Others were more up front, saying “if you offer more you’ll get the place” or simply “you can offer more”.

Sophie said she never did bid higher because she feared it would normalise the behaviour, and make it more difficult for others to secure rentals.
“The best advice that I can give to people is just to try and stay positive,” she said.
“Looking for a house in Brisbane right now beats you down to your last reserves.”
The Rental Affordability Index (RAI), published by National Shelter, Community Sector Banking, Brotherhood St Laurence and SGS Economics & Planning, is a price index for rental markets.
Its most recent report found Brisbane to now be the second-least affordable capital city for rents, which have risen over 17 per cent in the 12 months to June 2022.
The rental squeeze is also borne out in figures published by the Real Estate Institute Queensland (REIQ).
The statewide vacancy rate was sitting at 0.8 per cent at the close of last year, well below the 2.6 per cent figure the institute considers a healthy market.
Rental affordability has declined in the past two years. The average-income rental household now pays 27 per cent of their wage if renting at the median rate.
Rent bidding is a murky practice
In Queensland the Residential Tenancies and Rooming Accommodation Act governs the relationship between tenants and lessors, as well as the way property managers conduct tenancy relationships.
Under the law, rent bidding is prohibited.
But REIQ CEO Antonia Mercorella said it could end up being a bit of a grey area.

In Queensland, similar to New South Wales, tenants are able to offer more than the advertised price.
But the rental must be advertised at a fixed price, and agents are not able to advertise with a rent range, conduct a rental auction or proactively tell rental applicants to offer over the advertised rental price and encourage them to outbid each other.
“The law doesn’t prevent a tenant from offering more … where it gets tricky is where certain kinds of behaviour is encouraging rent bidding,” Ms Mercorella said.
Tenants trying to gazump each other is behaviour Godwin Beach property owner Annie Pastars has seen first hand.
She rents a self-contained two-bedroom studio at the rear of her house, and is “inundated” by offers when she lists it.
“I’ve been offered up to $200 more a week, which I wouldn’t accept because I think its unethical and it’s just adding to the whole situation,” she said.

Ms Mercorella conceded not all landlords were so principled.
“If an owner or a property manager were to start encouraging tenants to apply and offer above the asking price, potentially, then that may constitute a breach of the act,” she said.
“We’ve been encouraging the property management sector to act with the appropriate level of emotional intelligence, professionalism and showing care, and obviously understanding how stressful the current environment is for tenants.”
What can you do if an agent encourages you to bid?
There are avenues renters can take in response to an agent soliciting rental bids, even though it may not be practical in helping a tenant secure a rental.
A renter could report the potential breach to the Residential Tenancies Authority, which can take action against the offending party.
A tenant could also complain to the Office of Fair Trading, which is the licensing authority for real estate agents.
And there is always the (more costly) option of seeking independent legal advice.
Ms Mercorella said legislative guidelines could help clear up what exactly constitutes rental bidding.
She said it would be hard to determine whether the law needed strengthening to match states like Victoria, where tenants are prohibited from offering more than the advertised price.
“It’s always a delicate balancing act, making sure that the laws provide adequate protection for tenants and also that the laws allow a certain amount of flexibility and freedom to property owners to ensure that they’re prepared to keep providing private rental.”

In 2021, Greens’ MP Amy McMahon introduced legislation that would, among other reforms, ban rent bidding.
The Queensland government’s response came a month later in Housing Legislation Amendment Bill, which failed to include it.
“I don’t think the Queensland government have any idea about what everyday Queenslanders are going through,” she said.
“What we need to see in terms of rent bidding is not just a ban on real estate agents soliciting increasing rent, but for property investors and real estate agents to not be able to accept higher rents than what’s advertised.”
Housing Minister Leeanne Enoch was contacted for comment.
Where the law stands on rent bidding in Australia
State |
Status |
---|---|
NSW |
Legal for tenants to offer more than the advertised price but illegal for agents to ask renters to bid higher. |
Queensland |
Legal for tenants to offer more than the advertised price but illegal for agents to ask renters to bid higher. |
Victoria |
Illegal for tenants to offer more than the advertised price and illegal for agents to ask renters to bid higher. |
Tasmania |
Illegal for tenants to offer more than the advertised price and illegal for agents to ask renters to bid higher. |
ACT |
Legal, with the territory government considering rental reforms to prohibit rent bidding, though tenants will still be allowed to offer rental amounts above the advertised price. |
South Australia |
Legal, with the state government considering reforms to the state’s residential tenancies laws, including a crackdown on the practice of rend bidding. |
Western Australia |
Legal |
Northern Territory |
Legal |
*Name has been changed to protect privacy.
People who cannot afford to pay their mortgages or sell without taking a loss are increasingly putting their properties onto the heated rental market instead.
Key points:
- House prices nationally have dropped nearly 9 per cent on average from their most recent peak
- Real estate agents are starting to see forced sellers who can no longer afford their mortgages
- Some people in negative equity are renting out their homes instead of taking a loss on a sale
Numerous real estate agents in Sydney and Melbourne say the trend is becoming more entrenched as mortgage stress escalates.
Jazmin Pfluger took ABC News on a tour of a small one-bedroom apartment in Melbourne’s inner west that had been listed for sale for between $310,000 and $325,000.
The real estate agent said there had not been “enough interest at that price point”.

“That’s compared to 12 months ago when the market was doing really well for sales,” she said.
“It’s definitely changed a bit since then. The prices have dropped.
“So, a lot of owners are looking to rent, which is a good option at the moment with the [rental] price going up. It’s extremely busy.”

Leandro Quirino was one of the many people who inspected the apartment in Footscray that is now listed at $370 per week.
He is considering applying for it – despite the constant noise of trains running along nearby tracks.

“I don’t think that you are finding something better for the same price,” he said.
“Everything is more expensive. I think more people are just coming to the country and the price has gone up.
“The prices are just crazy.”
And the story of this humble apartment in Melbourne is illustrative of the bigger picture.

Property prices continue to slide
Property prices boomed during the pandemic as interest rates plunged to record lows.
Values shot up by more than 25 per cent nationally and many people bought at or near the top of the market.
Now interest rates are rising at the fastest pace on record, with eight rate hikes already delivered by the Reserve Bank and more expected to take the cash rate up towards 3.5 per cent, and potentially beyond.
Variable mortgage rates are typically a couple of percentage points above the cash rate, leaving most borrowers looking at 5-6 per cent.
That is hitting the borrowing capacity of potential buyers, like Nilesh Shukla.

“Before the rate increases started I was getting [pre-approved for] something around $900,000,” he told ABC News.
“But now when I approached the bank they say, ‘We can lend you around $600,000 to $650,000.’
“It’s quite a substantial decrease.”
In turn, the reduced capacity to pay is bringing down the price of homes further still.
The latest CoreLogic data showed home prices fell an average 1 per cent nationally last month and are now down 8.9 per cent from their most recent peak.
Sydney has continued to lead the peak-to-trough falls, down 13.8 per cent since the market topped out in January 2022, with the median home price back below $1 million for the first time since March 2021.
However, Hobart and Brisbane are rapidly catching up, with steeper falls over the past month (1.7 and 1.4 per cent) and past quarter (5.5 and 4.8 per cent).
Tanmay Goswami is a real estate agent who sells homes in Sydney’s outer western suburbs and has noticed the same trend as Jazmin Pfluger in Melbourne.

He has distressed sellers coming through his door who can no longer afford their mortgages as rates spike and inflation hits people’s cost of living.
“We are getting now calls from lots of landlords,” he told ABC News.
“They are struggling with the repayments, so they are looking to sell.
“All the inflation and other day-to-day costs has gone up, so they can’t afford.”
Boom’s bust leaves many in negative equity
However, once they list their properties for sale, some sellers are finding they cannot get what they paid for them, or even enough to pay off what they owe on the mortgage.
This situation is known as negative equity, and it can potentially lead to bankruptcy for borrowers with money still owed to the bank even if the house is sold.
CoreLogic analyst Eliza Owen said this reality is now hitting home for those who bought recently, especially in localities that have seen the biggest property price declines, in some cases already above 20 per cent.

“It’s quite possible that people have lost value in their homes,” she said.
“And, depending on the size of the deposit they went in with, it could be that they’re in a negative equity position now as well.
“It wouldn’t be surprising to see more and more people struggling with higher mortgage repayments with the extremes that we’ve seen in interest rate movements.”
She said it also wasn’t surprising that people struggling to meet their mortgage repayments may look to rent out their properties instead.
Rents nationally have gone up 10.1 per cent, but CoreLogic’s data show asking rents in inner Melbourne have jumped almost 30 per cent over the past 12 months, while inner-Sydney rents surged more than 20 per cent from the COVID lockdown lows seen around a year ago.
Apartment rents in these areas are soaring as international migrants and people who went regional during COVID return to the big cities.
“And that’s really where you’re going to see a first response — people going back into share houses and things like that to try and alleviate rental costs,” she added.
First home buyer Nilesh Shukla also just had his rent hiked.
It was around $500 a week and increased to $700 for his property near Sydney’s Olympic Park.
“We have opened our borders. And because of that the demand has increased,” he notes.
“And with the increase in demand, getting a rental is also difficult. Honestly speaking.”
And that may just push him to buying a home instead as it would be the same in mortgage repayments, as long as the agent is willing to “negotiate”.
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