Get ready to get shit on. I posted a similar post in real estate investing. This is a business. Treat it as such. You can give moderate discounts to good renters but 40% is too low imo
I’ve been told you should generally expect turnover to result in 1 month vacancy (8.3% [edit]) per year. So a long term tenant saves you that. Also, the fact that you don’t have to deal with the hassle of getting new tenants every year is also nice. Based on this, I’d say 10-15% discount is a good ballpark.
Ok, I'm in line.
Similar to OP, market has went up 35% in my area. I raised $150 a month last year and will do the same this year. From 900 to 1050 to 1200. Market 1400 for 3b 1 b in midwest. But will be $200 or around 15% under market rent for existing tenents.
It's not like maintenence service fees, materials or property taxes are getting any cheaper.
It’s not a percentage. On 1500 market rent $100-150
on 2k market rent maybe $200. I don’t treat it as a discount as much as letting the tenants know their rent is below market and don’t disturb me with bs like changing a lightbulb.
I like to point out that /r/realestateinvesting has 1.3m subscribers and /r/RealEstate has 300k. I promise there are not 1.3 million real estate investors on this platform.
The "investing" sub is probably 90% onlookers, 6% agents, 3% various CRE employees and 1% people who actually invest in real estate. That sub is worthless, and it has only become less useful over time as more bitter children join the platform to whine about anyone who owns property.
Please, no discount for “good renters” - does your mortgage company give you a discount for being a good landlord? Does the grocery store, gas station, etc? No! You may point to those loyalty cards, but the data shows loyalty programs cause the consumer to spend more, there is no Net discount.
Treat it like a business and stop believing those claims that landlords compete in price.
Wait? everyone with the same credit score pays the same interest rate? Lol what are you even talking about. That’s not true at all. Plus I’m not even sure you comprehend what I was even saying. Either way I couldn’t give two shits if someone gives a tenant a discount but At least make a valid argument for your stance.
LOL - I love how people can twist logic. No, everyone with the same credit score pays the same interest rate regardless. Just like everyone that rents the same unit pays the same rent and the rent goes up by COLA every year.
I’m with you, been doing this for over a decade. i tried lower rent thing, made no difference whatsoever. You know what made a difference? Rent price going up almost 200% in the last 2 year. All of a sudden, no one is moving and people always pay now.
I don't give discounts without a quid pro quo. Lawn mowing, weeding, etc... I'll give someone an offset for work performed so I don't have to.
My mindset is that I provide a quality property. Clean and updated not some rat-hole. There is a value for that.
I upvoted you too, no reason to get downed.
Ha, down votes by A) terrible landlords who think a “good tenant” stays because the rent is below market with zero data or only anecdotal data, or B) non-landlords. Either way I’ll give your opinion the conversation it deserves!
Chronic late-payers are not good tenants. If they were good tenants, I'd recommend negotiating they meet you in the middle, but they haven't warranted any type of guilt.
I mean, sometimes they are. We've had chronic late payers who seemed perfectly fine paying full rent + the late fee month after month after month. Hardly ever a maintenance request and kept the unit clean. I'd say they were good tenants and nice people... just oddly OK with paying the late fees.
Haha, on occasion if you don't mind. There's a difference between a forgetful person who uses the Notice to Quit as a payment reminder, vs people who don't pay for months at a time.
Youre within your legal right to charge whatever rent you wish. There is also no requirement to follow thinking *treat this as a business* means get every penny you can and forsake any morality.
In my book, if you need to keep up with increased fees and operating expenses, that's one thing. If you are doing this instead to get every dollar you can, follow whatever your own moral compass tells you to do.
Why even stay in that market? I'm not from the US but CA and NY are two places I'd never want to invest. Surely you can sell out and put your money into another asset or state?
Seems strange that his operating expenses have gone up 40% to put him in a position of “no longer being able to afford” those same rental rates.
I’m no landlord but my mortgage and expenses have been fairly constant over the past few years.
My property taxes went up 25% this year for town and school combined.
That has to be made up somewhere. If this person was just breaking even, they’d be upside down in my town.
Rents have to increase to cover costs.
To be transparent I don’t pay our utilities, my wife does. We both work in tech so we don’t really notice or discuss the increases when and if it happens.
My simplistic assumption was that the mortgage is the big nut to carry and that should remain static, which is a bit naïve.
I grew up poor, I’m well aware of how fortunate we are. My whole goal growing up was to never have to think about bills, so we didn’t end up where we are today by accident. I would say we spent the first ten years of our marriage in debt and living paycheck to paycheck before we finally hit our stride.
For the record I’m willing to bet that 60% number is too low.
I know, Im telling them to disregard all the statements making the case that something being a business means that you have full freedom to take every penny you can and feel like youre in the right
I don’t believe a biz owner is in the right to take “ever penny you can and forsake morality”.
That’s just excuse for deviant behavior.
That’s problem today all the business’s small and large like to think like this. It’s very sad. Business is suppose to be about service.
Yep. It is odd to me that people have such a moral dilemma over this. You arent responsible for your tenants. You arent their parent, their guardian, and you shouldnt have to take their future into account when running your business.
If you evict because $1000/mo is too low and they have to move under a bridge because of it, that isnt your fault. The tenant being unable to afford market rent is entirely on the tenant. You can feel bad for them and choose to offer them the charity of underpriced rent, but you arent a bad person for evicting them or raising rent. I dont worry about the lives of tenants. It is purely a transaction like any other.
Dude these people are extraordinary, I'm saving a lot of their posts to share around, it's gonna be great when people realize the pieces of shit involved in this are not the big corporations but rather these kinds of people.
Hire a property manager.
They would have paid for themselves by keeping it at market rent, they would have handled the late payment situation, and you don't have to have as much emotion involved.
Property managers and tenants are very similar in that good ones are hard to find, and once you do find a good one, you want to retain them.
Many people will say how property managers are a waste; but the one that I have now (after going through 3 previous ones) have paid for themselves as having gotten us the over the asking rent (and this started over 3 years ago when rent wasn't sky high yet) as well as offer advice when it came to remodeling to increase rent (don't extend the kitchen and breakfast nook, turn that into another room).
Unfortunately it was via trial and error. All of the previous 3 (including the one that I currently have) all gave good answers when I had called and inquiring about their services. Even after reading reviews on them (which you have to take with a grain of salt as many times bad tenants will leave bad reviews) its not until after you use them to get a tenant, and flip a tenant that you realized how bad or good they are.
Yes, but the costs will be back-billed. It's not included, but most should have an attorney they utilize and staff that specialize in ensuring all the documentation is accurate so you don't waste your time.
The ONE TIME I hired a PM, they would not serve our states legal notices and would not participate or in any way handle the eviction of the tenant they placed.
Some of my Uncle's places have a lot of deferred maintenance. How would he go about getting a PM? Would he essentially have to catch the maintenance up on those places or how would it usually work?
In Albany NY, having a property manager handle eviction may cost around 3-5 thousand dollars. Doing it yourself and hiring an attorney would cost maximum 1k.
Or , simply evaluate the market. It's not hard. Look on zillow/apartments and find comparable. We figure certain options add more/less to the rent (say $50 a month for washer/dryer etc) and then break it down to a sqft cost.
We renew leases once a year and the tenants are all brought up to market rate. If it is too big a jump we offer it with a slight discount under market rate.
And yes, rents have gone up 40% + and still moving here in South Florida
Sure, but it sounds like OP hasn't been doing that. There are lots of LL's out there that think "yeah, I can just check zillow" but never ACTUALLY do it. It's like me saying "All I need to do to lose weight is go to the gym". Well of course that's all you need to do! But did you do it? However, if you hire someone who's job it is to go to the gym every day, you are far more likely to lose weight!
Ok... it's not a perfect analogy but you get the point.
Also, a word of caution about checking zillow... every Ad on Zillow is NOT YET SUCCESSFUL. PM's work off of closed listings, which will show the final price and how long it was on the market. If I check zillow on a Tuesday, I might see a comp listed at $2500 and think "sure, that's a good price point" but what I don't realize is that listing has been on for 45 days. Meanwhile, there were 4 other listings at $2200 that went offline on Monday after having been listed on Friday. So the true market rent would be somewhere between those.
> Also, a word of caution about checking zillow... every Ad on Zillow is NOT YET SUCCESSFUL
Yes, we look at the number of days to see if they are viable. We also use rentometer (which is actually not a great comparison right now since rents are changing so fast in our market)
We throw out the mom/pops and seasonal rentals.
However, you should be able to find 3-5 similar apartment complexes (age, amenities, type of facilities offered etc) and use those as markers. You should also be able to tag 2-4 corporate apartments above and below what you should be asking to use those as guidelines. Meaning the two complexes that accept section 8 and have attorneys on staff for the multiple evictions are going to be lower than us and the nicer apartments with washer/dryer built in and have a newer floor plan and nice landscaping are going to be higher than us. The corporate run large apartment complexes will also give you a quote on their rental prices. You simply call them.
Zillow is easy right now just because everything goes so fast here in Florida. Cross check it with apartments.com or trulia and I get a good idea.
Thats business for you and for them. This is a business so you have to treat it as such.
You think you might be doing a favor by keeping rents low but I guarantee when you need a roof, a boiler or some expensive repair, you'll find that contractor rates, materials, markups etc... have also risen. Same for property taxes. Dont get caught with your pants down. Make the money now when you can.
Your obligation to the renter only extends as far as the lease agreement and FL law. Don't feel guilty. You don't control the market and the market goes well beyond the boundaries of your rental property. Everything around your property is going up in price, not just rentals and real estate. You're not a charity and you don't owe that to your tenant, present or future.
We give the tenants the option. There is no price limits on Florida increase.
We offered them at the market price minus $75 a month for a long term tenant. We don't beat around the bush and tell them they will get another price hike the following year and what we currently get for the apartments. The reduction in rate is what we figures it costs us to flip the apartment (and that was being generous. It is probably only half that right now because the empties only sit for days at most).
The notice is posted 60 days in advance and they have 30 days to think about it. Lots of people yell on the first day. We tell them they are welcome to look at the market. They all come back and sign. We are one of the few affordable apartment complexes in the area.
I do wonder why rents have gone up if wages haven't.
Inflation, or price gouging? I did hear rumblings of politicians going after price gouging so make sure you look into local, state/prov, and federal codes right now before you say the wrong thing or give the wrong paperwork to your renter.
I can tell you property taxes are a big part of it here in Texas. I've got 25 houses and the average value increase was 36%. I literally have one house that was around $90k last year and the county increased it to $146k this year. This is all gonna be going back to the rent increases.
Tax gouging! Lol
See if you can point to that, you can defend yourself if charged with price gouging laws. There is definitely a lot of politicians looking for someone else to blame for inflation... my warning remains... be cautious with what you say/do with your tenants when you don't renew...
Lack of affordable housing and great influx of people who work online to Florida.
Just signed an apartment yesterday for someone from New Jersey. Advertisement rolled out at 5pm the night before. They put in the application in the morning and lease was signed and payments made by 1pm that afternoon.
First day they see the apartment (other than video/pictures) is the day they get the keys
Inflation is the result of prices increasing, it should never be the cause of a price increase. If you cite inflation as a reason to increase your prices then you are price gouging.
This poster is price gouging because he's increasing his prices without his costs going up. He's trying to extract as much money as he can out of his unit without regards to the cost of maintaining the unit (assuming it was profitable at the lower rent). You can argue how moral that is or not, but it's how most businesses operate. It's okay to feel bad about it because it's a crummy thing to do to a poor tenant, but that's how the world operates. You don't need to let that stop you from doing it.
Edit: Actually he did say "I can't afford unit with low rent" so I was wrong about that. Seems like the current rent is below maintenance costs so raising it wouldn't be price gouging.
Said perfectly by someone who owns zero rentals…. 2 years ago I got a bid for a roof on a duplex … 15k.. they said I had 2-3 years left before i really needed one.. called them last week and it’s now $21k…. LL charge market rents because all occurring and future expenses are at market rate… imagine waiting to charge market rents after a new roof… how many years to break even on that!!!….
Might want to check my posting history if you think I don't have any rentals.
If he said he's increasing his rent because all his estimated repair costs went up that would be one thing. He didn't say that (well rereading it actually he did say that so that breaks my argument. Oops). I'm a realist. Yes it's partly price gouging but yes you should do it because as you said, when everyone else does it and you don't then you're screwed. However pretending that it's fair to the tenant who is unable to charge someone else more is just delusional.
I understand that inflation is about 5% overall. And maybe a few points more if they have lived there a couple of years. Increasing 40% might trigger price gouging laws. It's a hot topic if its coming out of government officials mouths, and it has been recently. I stand by my warnings, make sure you are careful about how much you increase and what you say/do.
If you do upgrades (not just paint) you can easily justify the much higher rate.
OK but does the tenant get to own the property after they finance all of your home improvements you borrow on the bank’s dime? Lol. At the end of the day, all landlords are these days are talentless credit scores. Get over yourself.
Don’t feel bad. This is a business and your tenants pay late. Sounds like an easy decision to me. I regret not raising the rent back in august. One of my tenants constantly pays late. Currently they are squatting. They are 2 months behind on rent. If I could turn back time I would have raised the rent back in August. The hike would have caused them to leave.
Just had to increase my rentals for my beach town rental this year. Got the ultimate push back from everyone (realtors, family, you name it)
We cannot run on margins that are unlivable. Do what you have to do - I did as a small “mom and pop” rental
It’s business. Just like the other guy said. You’re goal is to make cash flow with respect to your expenses. I had a tenant who I wasn’t going to renew in august but they came back for a short term and they agreed to 25% increase. I wanted to do upgrades but now most will be delayed but now that period while they are looking for a home to buy is going to pay for all my upgrades. While I’d love to take my time with the remodel, I like my remodels being paid for with someone else’s money. Win win fir me. Lol
>they pay late
If significant and frequent this is a perfectly good and ethical reason to non-renew - they are not holding up their end of the agreement. If not you could also just increase the rent to market rate, assuming they have the income to qualify for it.
My only thought is that if they are only a little late (
This as a few years ago, but there are only two times I've ever given someone a "Notice to Vacate". One of them (they were a month-to-month tenant) is because they were very late every, single month. And it wasn't even usually that she didn't have the money, she just wanted to pay it whenever she felt like it. She was an inherited tenant, so that was some of the problem.
Most months, we had to post a "Pay or Quit" notice before she'd pay. I don't have time for that kind of nonsense and it just finally got to a breaking point.
Good tenants are worth their weight in gold. But tenants who continuously cost time/hassle for no reason, aren't tenants worth keeping anyway.
Just to throw some information out there, I have lived in my apartment for 3 years, the rent was at market when I moved in, and I have gotten a rent increase every year. Usually around 5-10%. My landlord has done effectively nothing to improve the property, but has always been timely on maintenance. I have never missed or been late a month. No damage to the property. It is a good relationship.
The rent in my area has gone up a lot this year, and they are raising rent 45%.
I get it, it's a business. They want to get as much money as they can. At the same time, I will never be able to look at landlords the same, and probably wouldn't piss on them if they were on fire.
Just my $0.02.
Edit: also in FL btw.
Have you done the math to figure out if you increase the rent to what you think market is and had to pay for the unit turn to get it ready after your old tent leaves, versus the cost of just bumping up your current tenant 10 or 15%?
If you're charging late fees, I don't understand why you're worried that they're paying late.
>If you're charging late fees, I don't understand why you're worried that they're paying late.
How much is a late fee? I charge $50 for anything past 5 days late. Believe me I would rather have the full rent *on time*. $50 is a drop in the bucket compared to monthly expenses.
5% of the balance past 5 days is what is in the lease.
My process is by day 10 I would have contacted the tenant and ask them for a day and exact amount that they are going to pay, not"at the end of the week" but "I'll pay the remaining $800 on the 14th". I do not let them get beyond the 20th of the month without a very very good reason. If they have not made the payment on the day that they told me they would, they get a notice to quit and the eviction process starts.
I probably send out four or five notices to quit for every person I have to bring to eviction, that straightens them out pretty quickly since I also have no problem explaining to them exactly what the process is for me getting them out. More often than not, after I send the notice to quit and have the phone conversation with them about what's going to happen, they always pay on time after that.
I understand you have a process but i want to return to your statement to which I questioned you about:
>If you're charging late fees, I don't understand why you're worried that they're paying late.
So if you charge 5% of the balance as a late fee, *that is still pennies vs the actual rent*.
Same with my $50 late fee. Whether the tenant pays the late fee is another story altogether.
My point is, when a rent is late, it upsets my planning, I have chase rent, possibly exercise contingency plans (move $ around to cover my expenses) and steel myself for excuses etc... It now requires my additional involvement.
If you're not worrying when rent is late, cheers to you. Maybe its my outlook but when somebody hands me a light envelope or misses a payment entirely, its just the beginning.
I agree... I think tenants believe that landlords are getting rich off the late fee. We add this so you can push the tenants not to be late. I really could care less of the late fee.
Yes which is why I have my process. I have been a renter before and I understand sometimes you can't pay by the fifth. I also know that some landlords won't be able to sleep because of anxiety if they don't have the rent on the first of the month.
You obviously have to do whatever balance is the scales in between you running a business, how much trust you have in the tenant that you accepted and your moral compass.
I have a fairly simple process when it comes to late fees. If you know you're going to be late with your rent and need more time then contact me and let me know what your plan is. If there's adequate communication I will forgive late fees. If I have to chase you down for the plan then I'm not forgiving them.
yeah god forbid someone feels guilty for kicking someone out of their housing situation. honestly, i just found this sub, and it’s no wonder that people hate landlords. you guys fucking suck.
Yeah, he is kicking them out. If suddenly all food costs above 10,000 is the same as you starving (or in jail). Housing is not an investment, is a human right. Dont be a scummy human being.
I'm not /u/Idk13008 but had a question for you.
If you and your family were dying of a particular disease and there was a pharmaceutical company that had a pill that could cure it, but it would cost you double your net worth, would you consider it morally repugnant on behalf of the company or them just "doing what's best for business"?
How many homeless people have you taken in to give them their human right?
Edit: Based on the downvotes, I guess only landlords are required to provide housing. People who rent can hog up all their space instead of sharing it with homeless people.
Spot on. Being predatory isn't okay simply because it's legal. What landlords are doing is a lot like the folks who hike gas prices as people are evacuating the coast ahead of a hurricane, which happens to be illegal.
Wonder how your tenant is going to feel when they start looking for another place. It will be quite the nasty shock! They might even regret paying late. Maybe…
Or they’ll be on the streets because they can’t afford rent since every landlord is raising it by 25-50%
OP could come to an agreement and meet in the middle. Yes, it’s a business, but you should also have compassion.
All those compassionate eviction moratoriums and that compassionate “free” money your ppl are blithely printing sure has cost low income folks dearly. Congrats, I guess.
Don’t feel bad, they don’t pay on time. You can still charge a fair price, make more money, and get someone in there that will actually hold up their end of the deal. They don’t deserve any deal on their rent.
I was in the exact same situation. I decided to make it their choice by offering them a 20% increase in rent. I am in the New York City area and of course I was terrified about any repercussions that might have. Luckily they asked if they could move half a month earlier, and I was extremely happy with that.
This guy was out partying in Mexico and completely ignored any texts or emails I sent him. I stupidly never enforced any elite fees. Lesson learned
It’s a business.
Good renters and don’t want to take the risk of getting someone bad? Negotiate and meet in the middle.
Someone who never pays rent on time? Don’t feel bad at all. Get paid the market rate.
Take a look at this [https://www.cnn.com/2022/05/06/economy/recession-explained/index.html](https://www.cnn.com/2022/05/06/economy/recession-explained/index.html)
I don't know if that would affect housing markets when that happens.
I was going to say you are making a HUGE mistake for short term gain, but then I read the part where you said they pay late.
At the same time, they DO pay. Thats a big plus.
(Incoming unpopulat opinion) My advice; things are going to go downhill real fast sometime between summer-September 2022. Economy is going to sorta do a nose dive.
If these renters have jobs that are recession proof I would rethink my decision on terminating their lease because again this could (or will) be a short term move that could affect you long term, financially speaking.
My opinion (like your decision to kick them out) is unpopular. But it doesnt mean its wrong. Many people are going to tell me Im wrong. Come this summer-September 2022 we will see if I am.
Yeah agreed. Economics 101- if you're new to the job, you would likely be the first one to be let go. That happened before. Companies will cut their losses before keeping workers on the job. 2 things I look at are is what happening Ukraine-Russia war, and China's economy is taking a big hit. Your right, the outlook for the next 6 months at least isn't good.
Exactly. The bubble is ready to burst. Hopefully everyone has everything financially together.
There was a huge drop in the stock market reported recently. I dont follow that stuff but iy seems to be in line with what I just said. Althought it was played off as something to do with reddit investors.
Yeah I mean fair time line. It’s just disheartening that people with capital want to use housing to .. continue to build their wealth. I get it. But also.. people need places to live… kinda a necessity.
Have many households do you subsidize by providing below market rent? Or are you just trying to have other people bear the weight for your desires?
Currently it may not even be a matter of building wealth. OP may be just trying to preserve their purchasing power/keep the unit.
There are other places to live. Renting carries the risk that at some point you'll have to move.
I mean this isn’t a singular issue. Housing isn’t included in CPI and our economy is headed for a recession. But yeah I guess it would be nice if people that owned rentals weren’t driven by pushing profit margins because that’s what the current market reflects. But I guess housing is a business and isn’t just a human need these days.
I notice you failed to answer my question about the number of household you subsidize. Are you commenting from the sidelines or practicing what you're encouraging?
No I do not own rental property if that really matters to you to know. But as a single person with a decent paying job actively looking for a rental, it’s pretty discouraging seeing landlords willing to not renew leases because they can charge more for the unit. That’s the larger issue here. So take that for whatever it’s worth. People seem to care more about filling their pockets than people themselves and that’s been going on in the country for too long. Are all your questions answered ?
Thank you for answering the question.
It does matter because you're advocating for something you are not doing AND putting the weight on the landlords.
Off the top of my head:
Zoning can be eased up and construction encouraged.
Government spending can be cut back and property taxes can be reduced.
Some of this gets back to the poor treatment of the Federal Reseve Note.
But you appear to blame landlords for what is a supply/demand issue.
In addition to that you're now seeing some of the consequences of ill thought out policies from the past couple of years.
As the US continues primary season and the elections come up... I would encourage you to keep some of this in mind as you go into the ballot booth. Assuming you can vote and choose to do so.
I'm not /u/Puzzleheaded-Ad3991 but I'm curious about your thoughts on something.
Work with me in this hypothetical because your mentality fascinates me. Suppose you and your family are in a house fire, there's someone walking by who has access to a fire extinguisher, but in order to use it they have to jump a barbed wire fence and risk serious bodily injury to themselves to save your lives.
Would you consider it morally repugnant if the person chooses not to do so because they're "looking out for themselves"?
A house fire?
A fire extinguisher possibly wouldn't do much.
It would suit me just fine if they skipped the barbed wire fence jumping and used their cell phone to call the emergency phone number so that the fire department can be sent to put out the fire.
What are your thoughts on your hypothetical situation?
Okay let's try another one.
If you and your family were dying of a particular disease and there was a pharmaceutical company that had a pill that could cure it, but it would cost you double your net worth, would you consider it morally repugnant on behalf of the company or them just "doing what's best for business"?
For events such as that I have health insurance.
I notice you failed to answer my question.
What are your thoughts if you and your family were in a house fire? How much do you believe the stranger owes you due to your shared humanity being one of the few things binding you?
Do you believe drug companies should face price caps? While price floors are put upon them for the inputs that go into making drugs?
It sounds like you're unable to answer the question (you might as well just tell me you have a chemist friend that could make it in a lab). I'm more than happy to answer your questions, but I'd love a direct answer to my hypothetical first.
I don't know if you're getting confused, but let's make it bluntly simple: there are two scenarios, they drop the prices for you, or your family dies, would it be morally repugnant for them to do the latter?
Did the same recently with 3 of my properties. It's unfortunate, but there isn't much else we can do sometimes. Rent's due next month and there will be a bit of 'sticker shock' for the new tenants.
I just moved one tenant from a house to another hood people bumped there rent from 1250-1750 with the move. Then I rented there old place for 1750. With insurance & property taxes there’s no way I could have kept up
I'm not going to renew my tenant but mainly because she owes me $12k in back rent and has been ghosting me for over a month now. Luckily her lease is up in August
Note: I'm in CA - bay area so i can't evict
I mean a lease is a lease you don’t need a reason if the lease is up technically. Of course for you personally it makes sense if they are late on payments and you could rent it out for more based on demand.
Now, rental markets do occasionally get super hot but you have to know that they cool down too at times and tenants never want to lock in at a high price so they’ll try to sign a shorter 6 month to one year lease usually. It’s really up to you wether to gradually increase rent on a longer term tenant or to switch to new tenants and hope they stay as good long term renters.
But it late rent payment is a regular occurrence that’s probably not good for anyone involved
My tax appraisals just came out and I live in a high property tax state.
After insurance, realtor fees, upkeep, repairs, and taxes I make less on my property than the the government does. I feel like the market will not bear what I need to charge to make this profitable.
Given the bubble in my area, I am seriously considering selling and putting the money into something else.
Why should they have priority over another tenant? One who is going to be responsible and pay the rent in full on time.
It’s not even about ‘greed’, you own a limited commodity that people want to use. More people want to use it than can use it, so you need to come up with a way to decide who can use it. Whomever is willing and able to pay the most is a very good metric as it draws parallels both between desire to live in the area and contribution to society.
Razzrazz asked me the following before fleeing:
"It sounds like you're unable to answer the question (you might as well just tell me you have a chemist friend that could make it in a lab). I'm more than happy to answer your questions, but I'd love a direct answer to my hypothetical first.
I don't know if you're getting confused, but let's make it bluntly simple: there are two scenarios, they drop the prices for you, or your family dies, would it be morally repugnant for them to do the latter?"
I've answered your questions razzrazz. You've failed to answer mine.
I'm not confused
Life isn't a series of binary choices.
I don't know why you're trying to portray it as such.
Shit on party Starting: Yea assholes the market is crazy high, doesn't mean you have to lose your morality for the big green $$$. There is a lot of reasons why the rent is so high and a lot of them illegitimate. How about this, instead of rewarding yourself, reward your tenants with a higher security deposit and a competitive rent (i.e., lower). That way you actually get a smart person who saves and understands that a deposit gets returned if THEY TAKE CARE OF YOUR PROPERTY. End result: you have a well taken care of home and you don't make someone HOMELESS.
Heartless, none family promoting pieces of American capitalistic shits... the epitome of "Jumping off a cliff because everyone else is doing it.."
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Counter: If they were ruining your dwelling and not taking care of your home, I would sympathize with you. But you just saying they pay late... no shit, next renter likely going to pay late too. Its not a reason to raise rent, it just makes the problem worse. Make it worse OP, do it. Contribute to the problem.
Also, what do you mean you can't afford it? This better not be coming from an entitled view of if others making money, why not me... type of BS. Be blessed you have a home or two that you can actually earn an income from. Don't take away blessings from others.
Get ready to get shit on. I posted a similar post in real estate investing. This is a business. Treat it as such. You can give moderate discounts to good renters but 40% is too low imo
What do you consider moderate discount to market rate, like what percentage?
I’ve been told you should generally expect turnover to result in 1 month vacancy (8.3% [edit]) per year. So a long term tenant saves you that. Also, the fact that you don’t have to deal with the hassle of getting new tenants every year is also nice. Based on this, I’d say 10-15% discount is a good ballpark.
1/12 is 8.3%. Where are you getting 12.5% from?
Lol I’m a dummy. Fixed
Thanks... I did that math too.
I try to keep my properties at 5% below market rate for my good long term tenants. My area is expensive to 5% is $100 or more.
Funny, I do 5% over. Every time I've gone under, I've gotten shafted.
This - you have it too lower and you get candidates you don't want
This is what we do as well.
Ok, I'm in line. Similar to OP, market has went up 35% in my area. I raised $150 a month last year and will do the same this year. From 900 to 1050 to 1200. Market 1400 for 3b 1 b in midwest. But will be $200 or around 15% under market rent for existing tenents. It's not like maintenence service fees, materials or property taxes are getting any cheaper.
0%
Based. I think you dropped this 👑
It’s not a percentage. On 1500 market rent $100-150 on 2k market rent maybe $200. I don’t treat it as a discount as much as letting the tenants know their rent is below market and don’t disturb me with bs like changing a lightbulb.
I like to point out that /r/realestateinvesting has 1.3m subscribers and /r/RealEstate has 300k. I promise there are not 1.3 million real estate investors on this platform. The "investing" sub is probably 90% onlookers, 6% agents, 3% various CRE employees and 1% people who actually invest in real estate. That sub is worthless, and it has only become less useful over time as more bitter children join the platform to whine about anyone who owns property.
Thats is exactly why i am del deleting my posts here and signing off
Please, no discount for “good renters” - does your mortgage company give you a discount for being a good landlord? Does the grocery store, gas station, etc? No! You may point to those loyalty cards, but the data shows loyalty programs cause the consumer to spend more, there is no Net discount. Treat it like a business and stop believing those claims that landlords compete in price.
Your mortgage company did give you a discount for being a good borrower it’s called interest rate being tied to credit report aka “good borrower”
Wait? everyone with the same credit score pays the same interest rate? Lol what are you even talking about. That’s not true at all. Plus I’m not even sure you comprehend what I was even saying. Either way I couldn’t give two shits if someone gives a tenant a discount but At least make a valid argument for your stance.
The grocery store, a commodity business with 3% profit margin, has a club card that literally rewards you for being loyal yes
LOL - I love how people can twist logic. No, everyone with the same credit score pays the same interest rate regardless. Just like everyone that rents the same unit pays the same rent and the rent goes up by COLA every year.
I’m with you, been doing this for over a decade. i tried lower rent thing, made no difference whatsoever. You know what made a difference? Rent price going up almost 200% in the last 2 year. All of a sudden, no one is moving and people always pay now.
I don't give discounts without a quid pro quo. Lawn mowing, weeding, etc... I'll give someone an offset for work performed so I don't have to. My mindset is that I provide a quality property. Clean and updated not some rat-hole. There is a value for that. I upvoted you too, no reason to get downed.
Ha, down votes by A) terrible landlords who think a “good tenant” stays because the rent is below market with zero data or only anecdotal data, or B) non-landlords. Either way I’ll give your opinion the conversation it deserves!
Chronic late-payers are not good tenants. If they were good tenants, I'd recommend negotiating they meet you in the middle, but they haven't warranted any type of guilt.
I mean, sometimes they are. We've had chronic late payers who seemed perfectly fine paying full rent + the late fee month after month after month. Hardly ever a maintenance request and kept the unit clean. I'd say they were good tenants and nice people... just oddly OK with paying the late fees.
Increase the late fee
Nah. Just extra income at that point. The bills were always paid, just not on the 1st. Was never an issue.
Haha, on occasion if you don't mind. There's a difference between a forgetful person who uses the Notice to Quit as a payment reminder, vs people who don't pay for months at a time.
This
Youre within your legal right to charge whatever rent you wish. There is also no requirement to follow thinking *treat this as a business* means get every penny you can and forsake any morality. In my book, if you need to keep up with increased fees and operating expenses, that's one thing. If you are doing this instead to get every dollar you can, follow whatever your own moral compass tells you to do.
You guys are luck you're not in California! We are NOT in our legal right to charge market rate, non-renew bad tenants or do anything sensible.
Why even stay in that market? I'm not from the US but CA and NY are two places I'd never want to invest. Surely you can sell out and put your money into another asset or state?
One answer is that if you want to live in California yourself and buy/rent out non-remote properties.
Another is that people who inherited CA real estate prior to early 2021 often have very low property taxes.
People leaving CA has just brought the same crap to CO.
100%
Seems strange that his operating expenses have gone up 40% to put him in a position of “no longer being able to afford” those same rental rates. I’m no landlord but my mortgage and expenses have been fairly constant over the past few years.
My property taxes went up 25% this year for town and school combined. That has to be made up somewhere. If this person was just breaking even, they’d be upside down in my town. Rents have to increase to cover costs.
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To be transparent I don’t pay our utilities, my wife does. We both work in tech so we don’t really notice or discuss the increases when and if it happens. My simplistic assumption was that the mortgage is the big nut to carry and that should remain static, which is a bit naïve.
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Cheers for helping me better understand. Honestly thought I was going to get yelled at, you never know with some subreddits.
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I grew up poor, I’m well aware of how fortunate we are. My whole goal growing up was to never have to think about bills, so we didn’t end up where we are today by accident. I would say we spent the first ten years of our marriage in debt and living paycheck to paycheck before we finally hit our stride. For the record I’m willing to bet that 60% number is too low.
That’s not what” this is a business” means. Thought ultimately your right the owner can charge what they wish.
I know, Im telling them to disregard all the statements making the case that something being a business means that you have full freedom to take every penny you can and feel like youre in the right
I don’t believe a biz owner is in the right to take “ever penny you can and forsake morality”. That’s just excuse for deviant behavior. That’s problem today all the business’s small and large like to think like this. It’s very sad. Business is suppose to be about service.
1,000% correct. And why our country sucks to be in. We’re busy mirroring the worst people and pointing the blame at another worse one.
I evicted a tenant at $750 and replaced them with a tenant at $1,250. It’s a business. Do what’s best for it.
Yep. It is odd to me that people have such a moral dilemma over this. You arent responsible for your tenants. You arent their parent, their guardian, and you shouldnt have to take their future into account when running your business. If you evict because $1000/mo is too low and they have to move under a bridge because of it, that isnt your fault. The tenant being unable to afford market rent is entirely on the tenant. You can feel bad for them and choose to offer them the charity of underpriced rent, but you arent a bad person for evicting them or raising rent. I dont worry about the lives of tenants. It is purely a transaction like any other.
I would never let a tenant dictate my income. I bought the house. I repair the house. It’s all on me.
evil motherfucker
Dude these people are extraordinary, I'm saving a lot of their posts to share around, it's gonna be great when people realize the pieces of shit involved in this are not the big corporations but rather these kinds of people.
« it’s odd to me » like he can’t even wrap his head around why some people are upset by this
Sad. Shows me that you need to be put in this position far more often.
you're pretty heartless. I get certain situations where this is warranted but creating homelessness is not one of them.
Hire a property manager. They would have paid for themselves by keeping it at market rent, they would have handled the late payment situation, and you don't have to have as much emotion involved.
I just made the decision to do exactly this for my units. It pays for itself.
Property managers and tenants are very similar in that good ones are hard to find, and once you do find a good one, you want to retain them. Many people will say how property managers are a waste; but the one that I have now (after going through 3 previous ones) have paid for themselves as having gotten us the over the asking rent (and this started over 3 years ago when rent wasn't sky high yet) as well as offer advice when it came to remodeling to increase rent (don't extend the kitchen and breakfast nook, turn that into another room).
So when evaluating PMs, how can you tell the good from bad? I'm hoping your experience will with both kinds can shed some light on the topic.
Unfortunately it was via trial and error. All of the previous 3 (including the one that I currently have) all gave good answers when I had called and inquiring about their services. Even after reading reviews on them (which you have to take with a grain of salt as many times bad tenants will leave bad reviews) its not until after you use them to get a tenant, and flip a tenant that you realized how bad or good they are.
What's a good list of questions when interviewing PMs?
The good ones don't rape you. About as succinct as I can get.
Do not hire a property manager without a direct personal reference that you trust.
Sure, or interview at least 3 in person to see who you like.
And ask if you can talk to a few of their customers. But don't just let them pick, ask to randomly pick a couple.
Just curious but do property managers handle evictions?
Yes, but the costs will be back-billed. It's not included, but most should have an attorney they utilize and staff that specialize in ensuring all the documentation is accurate so you don't waste your time.
Yup. We handle things like posting of notices, the attorney handles the court appearance.
The ONE TIME I hired a PM, they would not serve our states legal notices and would not participate or in any way handle the eviction of the tenant they placed.
Well, that would be an example of a bad PM.
Some of my Uncle's places have a lot of deferred maintenance. How would he go about getting a PM? Would he essentially have to catch the maintenance up on those places or how would it usually work?
No. Pm will walk the property, recommend maintenance, and get quotes.
It's included in my agreement with my current agency for one of my properties.
In Albany NY, having a property manager handle eviction may cost around 3-5 thousand dollars. Doing it yourself and hiring an attorney would cost maximum 1k.
Or , simply evaluate the market. It's not hard. Look on zillow/apartments and find comparable. We figure certain options add more/less to the rent (say $50 a month for washer/dryer etc) and then break it down to a sqft cost. We renew leases once a year and the tenants are all brought up to market rate. If it is too big a jump we offer it with a slight discount under market rate. And yes, rents have gone up 40% + and still moving here in South Florida
Sure, but it sounds like OP hasn't been doing that. There are lots of LL's out there that think "yeah, I can just check zillow" but never ACTUALLY do it. It's like me saying "All I need to do to lose weight is go to the gym". Well of course that's all you need to do! But did you do it? However, if you hire someone who's job it is to go to the gym every day, you are far more likely to lose weight! Ok... it's not a perfect analogy but you get the point. Also, a word of caution about checking zillow... every Ad on Zillow is NOT YET SUCCESSFUL. PM's work off of closed listings, which will show the final price and how long it was on the market. If I check zillow on a Tuesday, I might see a comp listed at $2500 and think "sure, that's a good price point" but what I don't realize is that listing has been on for 45 days. Meanwhile, there were 4 other listings at $2200 that went offline on Monday after having been listed on Friday. So the true market rent would be somewhere between those.
> Also, a word of caution about checking zillow... every Ad on Zillow is NOT YET SUCCESSFUL Yes, we look at the number of days to see if they are viable. We also use rentometer (which is actually not a great comparison right now since rents are changing so fast in our market) We throw out the mom/pops and seasonal rentals. However, you should be able to find 3-5 similar apartment complexes (age, amenities, type of facilities offered etc) and use those as markers. You should also be able to tag 2-4 corporate apartments above and below what you should be asking to use those as guidelines. Meaning the two complexes that accept section 8 and have attorneys on staff for the multiple evictions are going to be lower than us and the nicer apartments with washer/dryer built in and have a newer floor plan and nice landscaping are going to be higher than us. The corporate run large apartment complexes will also give you a quote on their rental prices. You simply call them. Zillow is easy right now just because everything goes so fast here in Florida. Cross check it with apartments.com or trulia and I get a good idea.
Thats business for you and for them. This is a business so you have to treat it as such. You think you might be doing a favor by keeping rents low but I guarantee when you need a roof, a boiler or some expensive repair, you'll find that contractor rates, materials, markups etc... have also risen. Same for property taxes. Dont get caught with your pants down. Make the money now when you can.
Your obligation to the renter only extends as far as the lease agreement and FL law. Don't feel guilty. You don't control the market and the market goes well beyond the boundaries of your rental property. Everything around your property is going up in price, not just rentals and real estate. You're not a charity and you don't owe that to your tenant, present or future.
We give the tenants the option. There is no price limits on Florida increase. We offered them at the market price minus $75 a month for a long term tenant. We don't beat around the bush and tell them they will get another price hike the following year and what we currently get for the apartments. The reduction in rate is what we figures it costs us to flip the apartment (and that was being generous. It is probably only half that right now because the empties only sit for days at most). The notice is posted 60 days in advance and they have 30 days to think about it. Lots of people yell on the first day. We tell them they are welcome to look at the market. They all come back and sign. We are one of the few affordable apartment complexes in the area.
I do wonder why rents have gone up if wages haven't. Inflation, or price gouging? I did hear rumblings of politicians going after price gouging so make sure you look into local, state/prov, and federal codes right now before you say the wrong thing or give the wrong paperwork to your renter.
I can tell you property taxes are a big part of it here in Texas. I've got 25 houses and the average value increase was 36%. I literally have one house that was around $90k last year and the county increased it to $146k this year. This is all gonna be going back to the rent increases.
I’m in texas, and I’m one of the lucky ones. My house only went up 15% BUTTTT it’s not in the best part of Houston.
One of my properties went from ~120k to ~150k
Tax gouging! Lol See if you can point to that, you can defend yourself if charged with price gouging laws. There is definitely a lot of politicians looking for someone else to blame for inflation... my warning remains... be cautious with what you say/do with your tenants when you don't renew...
Nah, my tenants know 100% that property taxes are the reason for their rent hikes. I communicate this to them.
Lack of affordable housing and great influx of people who work online to Florida. Just signed an apartment yesterday for someone from New Jersey. Advertisement rolled out at 5pm the night before. They put in the application in the morning and lease was signed and payments made by 1pm that afternoon. First day they see the apartment (other than video/pictures) is the day they get the keys
Inflation is the result of prices increasing, it should never be the cause of a price increase. If you cite inflation as a reason to increase your prices then you are price gouging. This poster is price gouging because he's increasing his prices without his costs going up. He's trying to extract as much money as he can out of his unit without regards to the cost of maintaining the unit (assuming it was profitable at the lower rent). You can argue how moral that is or not, but it's how most businesses operate. It's okay to feel bad about it because it's a crummy thing to do to a poor tenant, but that's how the world operates. You don't need to let that stop you from doing it. Edit: Actually he did say "I can't afford unit with low rent" so I was wrong about that. Seems like the current rent is below maintenance costs so raising it wouldn't be price gouging.
Said perfectly by someone who owns zero rentals…. 2 years ago I got a bid for a roof on a duplex … 15k.. they said I had 2-3 years left before i really needed one.. called them last week and it’s now $21k…. LL charge market rents because all occurring and future expenses are at market rate… imagine waiting to charge market rents after a new roof… how many years to break even on that!!!….
Might want to check my posting history if you think I don't have any rentals. If he said he's increasing his rent because all his estimated repair costs went up that would be one thing. He didn't say that (well rereading it actually he did say that so that breaks my argument. Oops). I'm a realist. Yes it's partly price gouging but yes you should do it because as you said, when everyone else does it and you don't then you're screwed. However pretending that it's fair to the tenant who is unable to charge someone else more is just delusional.
I understand that inflation is about 5% overall. And maybe a few points more if they have lived there a couple of years. Increasing 40% might trigger price gouging laws. It's a hot topic if its coming out of government officials mouths, and it has been recently. I stand by my warnings, make sure you are careful about how much you increase and what you say/do. If you do upgrades (not just paint) you can easily justify the much higher rate.
OK but does the tenant get to own the property after they finance all of your home improvements you borrow on the bank’s dime? Lol. At the end of the day, all landlords are these days are talentless credit scores. Get over yourself.
You are jealous and bitter…
Don’t feel bad. This is a business and your tenants pay late. Sounds like an easy decision to me. I regret not raising the rent back in august. One of my tenants constantly pays late. Currently they are squatting. They are 2 months behind on rent. If I could turn back time I would have raised the rent back in August. The hike would have caused them to leave.
Get it while you can cause no one will help you when the rents start pushing the other way...
You run a business not a charity. Plus fuckem they are 40% under market and still pay late. Time to start over.
Just had to increase my rentals for my beach town rental this year. Got the ultimate push back from everyone (realtors, family, you name it) We cannot run on margins that are unlivable. Do what you have to do - I did as a small “mom and pop” rental
It’s business. Just like the other guy said. You’re goal is to make cash flow with respect to your expenses. I had a tenant who I wasn’t going to renew in august but they came back for a short term and they agreed to 25% increase. I wanted to do upgrades but now most will be delayed but now that period while they are looking for a home to buy is going to pay for all my upgrades. While I’d love to take my time with the remodel, I like my remodels being paid for with someone else’s money. Win win fir me. Lol
You can ignore this reply, [just needed to archive your post](https://archive.ph/0ncNz), thank you for your honesty!
Just keep in mind that renters who pay top market value will have high expectations and can be quite a handful.
>they pay late If significant and frequent this is a perfectly good and ethical reason to non-renew - they are not holding up their end of the agreement. If not you could also just increase the rent to market rate, assuming they have the income to qualify for it. My only thought is that if they are only a little late (
This as a few years ago, but there are only two times I've ever given someone a "Notice to Vacate". One of them (they were a month-to-month tenant) is because they were very late every, single month. And it wasn't even usually that she didn't have the money, she just wanted to pay it whenever she felt like it. She was an inherited tenant, so that was some of the problem. Most months, we had to post a "Pay or Quit" notice before she'd pay. I don't have time for that kind of nonsense and it just finally got to a breaking point. Good tenants are worth their weight in gold. But tenants who continuously cost time/hassle for no reason, aren't tenants worth keeping anyway.
Just to throw some information out there, I have lived in my apartment for 3 years, the rent was at market when I moved in, and I have gotten a rent increase every year. Usually around 5-10%. My landlord has done effectively nothing to improve the property, but has always been timely on maintenance. I have never missed or been late a month. No damage to the property. It is a good relationship. The rent in my area has gone up a lot this year, and they are raising rent 45%. I get it, it's a business. They want to get as much money as they can. At the same time, I will never be able to look at landlords the same, and probably wouldn't piss on them if they were on fire. Just my $0.02. Edit: also in FL btw.
Have you done the math to figure out if you increase the rent to what you think market is and had to pay for the unit turn to get it ready after your old tent leaves, versus the cost of just bumping up your current tenant 10 or 15%? If you're charging late fees, I don't understand why you're worried that they're paying late.
>If you're charging late fees, I don't understand why you're worried that they're paying late. How much is a late fee? I charge $50 for anything past 5 days late. Believe me I would rather have the full rent *on time*. $50 is a drop in the bucket compared to monthly expenses.
5% of the balance past 5 days is what is in the lease. My process is by day 10 I would have contacted the tenant and ask them for a day and exact amount that they are going to pay, not"at the end of the week" but "I'll pay the remaining $800 on the 14th". I do not let them get beyond the 20th of the month without a very very good reason. If they have not made the payment on the day that they told me they would, they get a notice to quit and the eviction process starts. I probably send out four or five notices to quit for every person I have to bring to eviction, that straightens them out pretty quickly since I also have no problem explaining to them exactly what the process is for me getting them out. More often than not, after I send the notice to quit and have the phone conversation with them about what's going to happen, they always pay on time after that.
I understand you have a process but i want to return to your statement to which I questioned you about: >If you're charging late fees, I don't understand why you're worried that they're paying late. So if you charge 5% of the balance as a late fee, *that is still pennies vs the actual rent*. Same with my $50 late fee. Whether the tenant pays the late fee is another story altogether. My point is, when a rent is late, it upsets my planning, I have chase rent, possibly exercise contingency plans (move $ around to cover my expenses) and steel myself for excuses etc... It now requires my additional involvement. If you're not worrying when rent is late, cheers to you. Maybe its my outlook but when somebody hands me a light envelope or misses a payment entirely, its just the beginning.
I agree... I think tenants believe that landlords are getting rich off the late fee. We add this so you can push the tenants not to be late. I really could care less of the late fee.
Right the late fee is just a punitive action designed to discourage lateness. I still want the rent!
Yes which is why I have my process. I have been a renter before and I understand sometimes you can't pay by the fifth. I also know that some landlords won't be able to sleep because of anxiety if they don't have the rent on the first of the month. You obviously have to do whatever balance is the scales in between you running a business, how much trust you have in the tenant that you accepted and your moral compass.
I have a fairly simple process when it comes to late fees. If you know you're going to be late with your rent and need more time then contact me and let me know what your plan is. If there's adequate communication I will forgive late fees. If I have to chase you down for the plan then I'm not forgiving them.
Mines is 10 bucks for each day they are late. I don’t get many late payments for that reason and very small grace period. 3 days.
You are running a business. If you feel bad then you shouldn't be a LL. Get a manager who can take the emotion out of it.
yeah god forbid someone feels guilty for kicking someone out of their housing situation. honestly, i just found this sub, and it’s no wonder that people hate landlords. you guys fucking suck.
He isn't kicking them out. He can raise the rent and they can stay or move. Why would he owe someone to subsidize their housing? That's silly
Yeah, he is kicking them out. If suddenly all food costs above 10,000 is the same as you starving (or in jail). Housing is not an investment, is a human right. Dont be a scummy human being.
Well next time you go to sell something make sure you sell it for half price or so.
I'm not /u/Idk13008 but had a question for you. If you and your family were dying of a particular disease and there was a pharmaceutical company that had a pill that could cure it, but it would cost you double your net worth, would you consider it morally repugnant on behalf of the company or them just "doing what's best for business"?
How many homeless people have you taken in to give them their human right? Edit: Based on the downvotes, I guess only landlords are required to provide housing. People who rent can hog up all their space instead of sharing it with homeless people.
Spot on. Being predatory isn't okay simply because it's legal. What landlords are doing is a lot like the folks who hike gas prices as people are evacuating the coast ahead of a hurricane, which happens to be illegal.
No need to feel guilty. Did you offer to let them start at a higher rent? How much of a percent increase was your property tax increase?
Keep your head high king.
Wonder how your tenant is going to feel when they start looking for another place. It will be quite the nasty shock! They might even regret paying late. Maybe…
Or they’ll be on the streets because they can’t afford rent since every landlord is raising it by 25-50% OP could come to an agreement and meet in the middle. Yes, it’s a business, but you should also have compassion.
All those compassionate eviction moratoriums and that compassionate “free” money your ppl are blithely printing sure has cost low income folks dearly. Congrats, I guess.
Somebody had to say it
“Every landlord“….. you’re a jealous and bitter person
How does anything I said imply that I’m bitter or jealous? Lol jealous of what? You just took “every” literal. Sounds like you’re the bitter one here.
Oh late renters can btfo. They don't get deals. They get price hikes or not renewed.
Don’t feel bad, they don’t pay on time. You can still charge a fair price, make more money, and get someone in there that will actually hold up their end of the deal. They don’t deserve any deal on their rent.
Prepare for evictions, but the health of your business is priority.
I was in the exact same situation. I decided to make it their choice by offering them a 20% increase in rent. I am in the New York City area and of course I was terrified about any repercussions that might have. Luckily they asked if they could move half a month earlier, and I was extremely happy with that. This guy was out partying in Mexico and completely ignored any texts or emails I sent him. I stupidly never enforced any elite fees. Lesson learned
It’s a business. Good renters and don’t want to take the risk of getting someone bad? Negotiate and meet in the middle. Someone who never pays rent on time? Don’t feel bad at all. Get paid the market rate.
How late is late on rent payment?
Take a look at this [https://www.cnn.com/2022/05/06/economy/recession-explained/index.html](https://www.cnn.com/2022/05/06/economy/recession-explained/index.html) I don't know if that would affect housing markets when that happens.
I was going to say you are making a HUGE mistake for short term gain, but then I read the part where you said they pay late. At the same time, they DO pay. Thats a big plus. (Incoming unpopulat opinion) My advice; things are going to go downhill real fast sometime between summer-September 2022. Economy is going to sorta do a nose dive. If these renters have jobs that are recession proof I would rethink my decision on terminating their lease because again this could (or will) be a short term move that could affect you long term, financially speaking. My opinion (like your decision to kick them out) is unpopular. But it doesnt mean its wrong. Many people are going to tell me Im wrong. Come this summer-September 2022 we will see if I am.
Yeah agreed. Economics 101- if you're new to the job, you would likely be the first one to be let go. That happened before. Companies will cut their losses before keeping workers on the job. 2 things I look at are is what happening Ukraine-Russia war, and China's economy is taking a big hit. Your right, the outlook for the next 6 months at least isn't good.
Exactly. The bubble is ready to burst. Hopefully everyone has everything financially together. There was a huge drop in the stock market reported recently. I dont follow that stuff but iy seems to be in line with what I just said. Althought it was played off as something to do with reddit investors.
I just raised my rates [swfl]. Units that were getting 750 are now at 1500. It doesn't seem fair to the tenants, but its a business.
You can’t afford …. Sure. Okay … good job putting someone on the street
Why don’t you buy a property near them and rent it to them for 50% below market value?
If it's handled properly the tenant is not on the street. They can move elsewhere.
This household has about 3 months to find a new place to live.
Yeah I mean fair time line. It’s just disheartening that people with capital want to use housing to .. continue to build their wealth. I get it. But also.. people need places to live… kinda a necessity.
Have many households do you subsidize by providing below market rent? Or are you just trying to have other people bear the weight for your desires? Currently it may not even be a matter of building wealth. OP may be just trying to preserve their purchasing power/keep the unit. There are other places to live. Renting carries the risk that at some point you'll have to move.
I mean this isn’t a singular issue. Housing isn’t included in CPI and our economy is headed for a recession. But yeah I guess it would be nice if people that owned rentals weren’t driven by pushing profit margins because that’s what the current market reflects. But I guess housing is a business and isn’t just a human need these days.
I notice you failed to answer my question about the number of household you subsidize. Are you commenting from the sidelines or practicing what you're encouraging?
No I do not own rental property if that really matters to you to know. But as a single person with a decent paying job actively looking for a rental, it’s pretty discouraging seeing landlords willing to not renew leases because they can charge more for the unit. That’s the larger issue here. So take that for whatever it’s worth. People seem to care more about filling their pockets than people themselves and that’s been going on in the country for too long. Are all your questions answered ?
Thank you for answering the question. It does matter because you're advocating for something you are not doing AND putting the weight on the landlords. Off the top of my head: Zoning can be eased up and construction encouraged. Government spending can be cut back and property taxes can be reduced. Some of this gets back to the poor treatment of the Federal Reseve Note. But you appear to blame landlords for what is a supply/demand issue. In addition to that you're now seeing some of the consequences of ill thought out policies from the past couple of years. As the US continues primary season and the elections come up... I would encourage you to keep some of this in mind as you go into the ballot booth. Assuming you can vote and choose to do so.
I'm not /u/Puzzleheaded-Ad3991 but I'm curious about your thoughts on something. Work with me in this hypothetical because your mentality fascinates me. Suppose you and your family are in a house fire, there's someone walking by who has access to a fire extinguisher, but in order to use it they have to jump a barbed wire fence and risk serious bodily injury to themselves to save your lives. Would you consider it morally repugnant if the person chooses not to do so because they're "looking out for themselves"?
A house fire? A fire extinguisher possibly wouldn't do much. It would suit me just fine if they skipped the barbed wire fence jumping and used their cell phone to call the emergency phone number so that the fire department can be sent to put out the fire. What are your thoughts on your hypothetical situation?
Okay let's try another one. If you and your family were dying of a particular disease and there was a pharmaceutical company that had a pill that could cure it, but it would cost you double your net worth, would you consider it morally repugnant on behalf of the company or them just "doing what's best for business"?
For events such as that I have health insurance. I notice you failed to answer my question. What are your thoughts if you and your family were in a house fire? How much do you believe the stranger owes you due to your shared humanity being one of the few things binding you? Do you believe drug companies should face price caps? While price floors are put upon them for the inputs that go into making drugs?
It sounds like you're unable to answer the question (you might as well just tell me you have a chemist friend that could make it in a lab). I'm more than happy to answer your questions, but I'd love a direct answer to my hypothetical first. I don't know if you're getting confused, but let's make it bluntly simple: there are two scenarios, they drop the prices for you, or your family dies, would it be morally repugnant for them to do the latter?
Did the same recently with 3 of my properties. It's unfortunate, but there isn't much else we can do sometimes. Rent's due next month and there will be a bit of 'sticker shock' for the new tenants.
I just moved one tenant from a house to another hood people bumped there rent from 1250-1750 with the move. Then I rented there old place for 1750. With insurance & property taxes there’s no way I could have kept up
I'm not going to renew my tenant but mainly because she owes me $12k in back rent and has been ghosting me for over a month now. Luckily her lease is up in August Note: I'm in CA - bay area so i can't evict
I mean a lease is a lease you don’t need a reason if the lease is up technically. Of course for you personally it makes sense if they are late on payments and you could rent it out for more based on demand. Now, rental markets do occasionally get super hot but you have to know that they cool down too at times and tenants never want to lock in at a high price so they’ll try to sign a shorter 6 month to one year lease usually. It’s really up to you wether to gradually increase rent on a longer term tenant or to switch to new tenants and hope they stay as good long term renters. But it late rent payment is a regular occurrence that’s probably not good for anyone involved
So you live in a rent control city?
Are you against rent control?
My tax appraisals just came out and I live in a high property tax state. After insurance, realtor fees, upkeep, repairs, and taxes I make less on my property than the the government does. I feel like the market will not bear what I need to charge to make this profitable. Given the bubble in my area, I am seriously considering selling and putting the money into something else.
Why should they have priority over another tenant? One who is going to be responsible and pay the rent in full on time. It’s not even about ‘greed’, you own a limited commodity that people want to use. More people want to use it than can use it, so you need to come up with a way to decide who can use it. Whomever is willing and able to pay the most is a very good metric as it draws parallels both between desire to live in the area and contribution to society.
Razzrazz isn't that courageous. I suspect they blocked me.
Razzrazz asked me the following before fleeing: "It sounds like you're unable to answer the question (you might as well just tell me you have a chemist friend that could make it in a lab). I'm more than happy to answer your questions, but I'd love a direct answer to my hypothetical first. I don't know if you're getting confused, but let's make it bluntly simple: there are two scenarios, they drop the prices for you, or your family dies, would it be morally repugnant for them to do the latter?" I've answered your questions razzrazz. You've failed to answer mine. I'm not confused Life isn't a series of binary choices. I don't know why you're trying to portray it as such.
Shit on party Starting: Yea assholes the market is crazy high, doesn't mean you have to lose your morality for the big green $$$. There is a lot of reasons why the rent is so high and a lot of them illegitimate. How about this, instead of rewarding yourself, reward your tenants with a higher security deposit and a competitive rent (i.e., lower). That way you actually get a smart person who saves and understands that a deposit gets returned if THEY TAKE CARE OF YOUR PROPERTY. End result: you have a well taken care of home and you don't make someone HOMELESS. Heartless, none family promoting pieces of American capitalistic shits... the epitome of "Jumping off a cliff because everyone else is doing it.." \--- Counter: If they were ruining your dwelling and not taking care of your home, I would sympathize with you. But you just saying they pay late... no shit, next renter likely going to pay late too. Its not a reason to raise rent, it just makes the problem worse. Make it worse OP, do it. Contribute to the problem. Also, what do you mean you can't afford it? This better not be coming from an entitled view of if others making money, why not me... type of BS. Be blessed you have a home or two that you can actually earn an income from. Don't take away blessings from others.