Hey there, pull up a chair and let me tell you a true tale of greed.
I was a tenant in a 4 family unit for over 10 years.
I paid rent on time (usually early), took the initiative to clean general areas on the regular (not in my lease), was quiet, seldom had company, non smoker, and got along well with everyone in the building.
All 4 units were occupied by good tenants and we had all been there some years, with small increases in rent over time but nothing too crazy.
February of 2023 our building was sold and we never met the new owners, not even a generic in person “Hi.”, instead we get emails letting us know our yearly leases will be renewed when the time came and gave us information for a pay portal to send our rent.
My lease was the first up for renewal that year in September.
From Feb to Sept I still had not met the new owner, and I get an email telling me my rent would be increasing to “match market” taking me from $800 to $1250 .. not a single person renting in that area pays over $900 bc the landlords are local and want to ensure their properties are filled.
I asked what would be done to offset this increase.. will I get new paint, new carpet, any repairs or upgrades? Nope, nothing, nada .. just get to pay more rent.
Although it was a hassle and I was not planning to move, I managed to find a much larger unit for just $875 and moved there.
Since the new owners took over, there have been no tenants.
All 4 units moved out after getting their new rent rates.
It is now June of 2024 and they still have 4 empty units sitting in that building.
Units that had previously been occupied by tenants paying their rent on time.
Sure you can raise rent. But let me tell a little story… 8 years ago, the folks across the street were renters. They mowed the lawn regularly, kept everything tidy, paid on time, and were quiet, nice people. Landlord increased rent by almost double, citing “keeping up with the market”.
Those good tenants had to move out. Replaced by a couple who seemed great, but turned out to be very destructive. They left, landlord had to replace ALL the carpets inside, and re-sod the backyard. Landlord increased rent AGAIN.
Sure, the new tenants keep to themselves, but I keep seeing notices put up on their door, both the front and the back yard are completely destroyed, and who knows how much damage they’ve done to the interior. I know they’ve added some walls inside to subdivide the rooms, because there are 11 people (half adults) living in a 3 bedroom house since the rent is so high. Yikes.
There are a lot of sketchy people out there. If you have a good tenant, I’d think twice about destroying a positive relationship.
I am a landlord, As of October 1st 2024 I own 2 apartment buildings with 3 units in one 5 in the other. I also have 4 duplexes (2 units in each) and 4 single family homes.
My rent rate is $250 dollars below what other rentals are going for in the areas where my properties are. The Average rent for a 3 bedroom apartment in these areas $2000 – $ 2800 per month , Rent on one of my 3 bedroom units $900 – $950 per month.
The average rent on 2 bedroom duplex units in the areas $2800 – $3200 per month, Rent in my 2 bedroom duplex units $2500 – $2700. Average rent for 3 bedroom house in these areas $3500 -$3900, Rent for my 3 bedroom houses $ 2800 – $3000.
My rental rates are set to cover the mortgage, water, sewer, heating, taxes, and maintenance bills and put a small bit away for any unforseen costs. Because bills such as water, sewer, heating, maintenance and taxes fluctuate i have left some room to be able to raise rents or lower them as the costs fluctuate.
When tenants see the costs of other rentals in the areas the same as they have they are more willing to work with me and accept the minor raises in rent. It is why my units are all rented and have been for long term rental periods.
I am not getting rich off my rentals, I just cut my real estate portfolio down by selling most of my properties so money is not an issue I just wont be buying any lambos anytime soon or living in a fancy mansion. I found its more rewarding to not finacially screw tenants it is how to keep units full and people happy.
So the market is rising in your area and you want to get some of that sweet action. Let me give you an example of how an ethical Landlord treats their tenets. A year ago circumstances required that my family find a new house to rent and after searching for an “affordable” home to rent in an ever rising and tight rental market, we stumbled on a house that was a little higher than we anticipated.
It was about $200 a month more than we wanted to pay, but it was in a very good neighborhood and in great condition. The kicker was that a) we hit it off immediately with the landlords and b) all utilities were included. I mean who does that any more.
We signed a 1 year lease, could have done 2 but wanted to be sure we could afford this home even with the $400 plus monthly savings on utilities.
Fast forward to the end of the first year and the landloard who probably barely came out ahead for the year due to paying our utilities and 2 very major but unforseen and unavoidable repairs, delivered a lease renewal. The first adjustment he made was to reduce our rent by $200 per month. This in spite of the fact that rental rates are still rising rapidly here.
The second being that we are now responsible for the utilities. The first change was very unexpected the second not so much because power rates are very high and I don’t think they could make enough on the unit to even meet expenses let alone make a profit on their rental.
So yes our monthly costs increased but being an ethical and landlord who wasn’t solely interested in maximizing his profit and renters be damned, he understood that we are good renters who pay our rent early, take care of his property and let him know early if there are any issues that need addressing before the blow up into major repairs.
He could have raised out rent and required us to pay the utilities. Instead he tried to offset our increases expense as much as he could with a lower monthly rent. So he has guaranteed that he will have a steady income stream without chasing that market rate that might net him a higher rental rate, but give him an empty house or even worse, bad tenets who won’t take care of his property or might even trash it.
You have to decide what kind of landlord you want to be and then be ready to deal with the consequences of your choice.
Here’s a personal story. I rented a massive 1800 sq ft house to a single mother for 10 years. Her rent was $450 and it never changed. Going rate is $900 for small 400–800 sq ft houses in the area. One year when school ended I told her I tried my best for 10 years, but I’ll be raising rent by at least $100. She opted to move. You see for 10 years I was letting her problems be my problems.
I was letting all my renters problems be my problems at some point. I was working extra hard for my own finances and often times loosing out on income from various rentals in the begining Then it dawned on me. When I was renting, my apartment complex raised rent by $50 every year. You know what I did? I found my first rental in a small town.
I purchased it for $6,000. Spent another 4k remodeling it and began renting it for $300 a month. I used that money to pay the loan. When I was in profit, I saved that bonus money and purchased another rental with cash. I then took that rental money and used it to buy my first house.
So this is what you do….run it like a business, raise your rent to market value and if your renter has to leave, tell them to do what I did. Problem solved, in a few years they can buy a house to live in and have rentals.
Oh, so you mean the unit your tenant is renting is reasonably priced?! How horrible!
You don’t “get him out.” You be happy that you have a reliable renter that pays you what his rent is every month. And you don’t raise it. Rent prices these days are embarrassing.
The only way it’s going to come down is via another depression or lots of chaos and riots (same result, really). But at some point it WILL come down and NOT in a pleasant way for businesses. The people will take back what they haven’t been able to afford these last few years because of absurd price raises.
So no, you don’t “get him out”. You also do not raise his rent. Or anybody else’s. If he pays you on time and takes care of the unit, you smile at him when you see him and go about your day.
Edit: 06/10/24 I’m seeing several mentions of “rent control”. This sounds like what needs to be done everywhere, and if it was ever needed, NOW is the time. I don’t trust landlords to decide to lower their rent on their own.
We all know how that works. Or *doesn’t* work. What needs to happen is an outside agency (I assume, in this case, it’s the government) comes in and sets reasonable rent. Not based on what cars cost. Not based on what the mansion costs at the end of the street.
But based on what a Xbr/Xbath unit of xxx sq feet and xx amenities is WORTH- itself. Based on the average income in the area. What somebody else paid for the 4br house across the way with their inheritance money should have nothing to do with the 2br apartment you’re trying to charge me too much for.
They try to say it does, but it doesn’t. Whether they go by that or not isn’t my point. It should not be that way. That allows rent to reach absurd amounts, like what is happening now, and that’s what needs to stop.
The same thing needs to be done with all businesses who jack up their prices. Understandably, landlords have to purchase things for their units. THEY shouldn’t have to pay absurd prices EITHER. What’s happening now isn’t going to stop unless something like this happens.
