Buying a House?

[Tywyll]

So my players want to rent/buy a house in a large walled city.

How much would you charge? I said they could rent one for maybe $50-$100 a week, so for now they are paying $320 a month (which also takes into account, I suppose, their living expenses from their jobs). But what if they want to buy it flat out?

[Skarg]

Then you need to decide what housing costs are like in that part of your campaign world. There are no fixed rules for that, and as you can see from the real-world housing market, even in modern times, real estate can vary crazily from place to place and time to time.

[Anaraxes]

Adventurers. In our town. I think we all know what this means.

[Tywyll]

Sooo….nobody has had to deal with this an has any reasonable ideas?

[Chris Rice]

For simplicity's sake I just convert £sterling to Silver so I don't need separate price lists, I can just work from real world prices instead. So a monthly rental of basic accommodation is about £400-500. Buying a house will vary a lot with size and location but will probably be around £100-150k for something at the lower end (not a slum, but nothing fancy).

If they're buying in the capital city or in the rich quarter that could easily scale up by several magnitudes.

[Chris Rice]

Looking into it a bit more, if we assume that purchase price should have some relationship to rental value then we can use tools like price to rent ratio to help.

Price to Rent ratio is calculated by Purchase Price divided by Annual Rental cost.

A price-to-rent ratio of 1 to 15 indicates it is much better to buy than rent; a price-to-rent ratio of 16 to 20 indicates it is typically better to rent than buy, and a price-to-rent ratio of 21 or more indicates it is much better to rent than buy.

If your guys are renting at £320 per month, you could set the ratio at 15 (the top end of the "better to buy" scale). That's £3,840 annual rental cost. Multiplied by 15 gives you a purchase price of £57,600.

It's a starting point anyway.

[MikMod]

Originally Posted by Tywyll

Sooo….nobody has had to deal with this an has any reasonable ideas?

Taking todays world as a guide to order of magnitude...

Lets say a small house in the UK (where I live) is anywhere from (modern day) £20,000 to £400,000 depending on:- geographical location, weather, proximity to ports and main trade routes, the perceived value of the quarter (inside or outside the city walls, surrounded by orc beggars or royal scions) its construction of mud, wattle and daub or stone, any special features or history - gardens, cellars, stables etc.

And lets say the wages of people in the UK vary from something like £15,000 to £80,000 commonly.

So a house might cost you anything from a quarter of a years wages, to 20ish years of earnings, depending. Or, assuming poorer people live in the poorer houses, you would need to spend a year of wages if poor, or 4-5 years of wages if rich, to get a house that 'suits you'.

Jobs.

Low paid workers in Cidri seem to earn about $30 a week after expenses. So that would make the cheapest houses something like $1500. Top earners like healers and sages are around $100 a week, so that would make a nice place somewhere around $20,000.

OR

Another way to look at it is rents. Subsistence costs are $20 a week, $50 if you have 'pretension to social standing' which arguably half goes on rent - lets assume so. Lets also assume that a landowner who decides to buy a house and then rent it out would like to break even after, say, 10 years, and then be into profit. That would give us a property rental income (and house purchase value) of $5,000 over ten years at the low end and a higher end around $12,500.

OR

You could consider how much it would cost to build a house. A builder will cost you $70 a week, maybe with 4 labourers for $25 each a week. If a mid-range wood/wattle+daub house takes 12 weeks to build, and half the cost is labour, the house will cost you $4,000 and I guess you could sell it for at least $8,000, but then I haven't included the land cost, or probably the fittings like windows and ironwork.

OR

We could look up the cost of Medieval houses and convert to Cidri currency:

http://web.archive.org/web/201106282...html#BUILDINGS

1 pound (L) = 20 shillings (s)
1 shilling = 12 pence (d)

Rent cottage 5s/year 14 cen(?) [3] 208
Rent craftsman's house 20s/year " " "
Rent merchant's house L2-L3/year " " "
Cottage (1 bay, 2 storeys) L2 early 14 cen " 205
Row house in York (well built) up to L5 " " "
Craftsman's house (i.e., with
shop, work area, and room
for workers) with 2-3 bays
and tile roof L10-L15 early 14 cen [3] 205
Modest hall and chamber, not
including materials L12 1289 [3] 79-80
Merchant's house L33-L66 early 14 cen [3] 205
House with courtyard L90+ " " "

Using Army wages of around 6d a day for armoured infantry compared to $75 a week for a Cidri recruit - we get a conversion of roughly 1d = $2

That puts a cottage at $960; a craftsmans house at $4,800-7,200 and a merchants house at $16,000 to $32,000

Double checking this, we can see that this information puts the rent of a cottage at 1/8 of its cost, rent for a craftsmans house at 1/10 to 1/15 of its value and rent of a merchants house at 1/16 to 1/20th its value. That would be $10 a month for a cottage, $40 a month for a craftsmans house, and about $80 a month for a merchants house. Not too far off but maybe a little low.

---------------

Given all that, you need to take into account Location, Location, Location, but it looks like a good sized house suitable for around 4 adventurers, in a quiet part of a major city, might cost $6,000 to $10,000?

[DarkPumpkin]

The prices of today's housing is massively propped up by the normalisation of usury. When banking cartels have less power, cash prices are lower. So take ratios like 15-20 years rent being the asking price with a grain of salt.

[Anaraxes]

Now that's just silly. Home mortgage rates in the US are currently under 4% annually. (And they're tax-deductible, which means you can really subtract your marginal tax rate for a proper comparison -- it's really more like 3% minus.)

Interest rates in medieval economies are harder to pin down, but taking the loans we have in evidence -- often enough to national governments -- the effective rates often worked out to be in the 30% or 40% range, annually. The surviving text of some anti-usury laws keeping those wicked Jewish moneylenders in check were often a penny per pound, up to 4d -- per week, which annualized is over 20% up to over 80%. It was a much riskier time to lend money, and so rates were higher.

Housing prices aren't propped by greedy banks. They're propped up by wealthy people willing to pay a lot for their own private home, along with "location, location, location". Compare Manhattan or the SF Bay Area with, say, rural Kansas. Interest rates are about the same. Housing prices are not.

[DarkPumpkin]

^suggest you research the concept of usury. When lending at interest is not readily available, the cash prices are much lower. It's not do much whether interest rates are are 4% or higher, it's the normalisation of huge amounts of credit.
Also suggest you lay off talk of evil Jews; probably the mods won't take to that.