First, let’s acknowledge rental property owners and property managers are just real people who own or manage rental property and want to provide quality housing for a decent price. The stigma that labels landlords as money hungry corporations is not really fair, so let’s change that. We are housing providers, not landlords. Even corporations must charge rent so that they can employ thousands of people. If rents are not kept with the market, people lose jobs and must resort to unemployment and Federal and State Assistance – something for which we all pay.
In general rental rate increases reflect the theory of supply and demand. We all know that there is much more demand than supply these days with our housing crisis. The more the demand and lower the supply, the higher the price.
What Factors are considered when Raising Rent?
- Expenses to maintain the property- Costs are rising everywhere – repair costs, insurance costs, utility costs, property taxes. To attempt to cover the costs of the property continues to be a challenge in our economy.
- The cost of improving a property or maintaining a property to prevent emergency repairs in the future (roofing, fencing, plumbing for example) are subject to environmental legislatively imposed safety protocols that cause the price to increase significantly.
- Some other points to consider is the government continuing to put laws in place that grossly effect what housing providers can and can’t do. Lead, Asbestos, Mold and other emergency services cost so much not always covered by insurance.
- Rent control: If an owner does not increase rent in a given year, their property values go down. They lose out on that opportunity to raise the rent forever. In order to keep their property value up for re-sale, Owners have to stay with current with market rent.
- Lastly, we invite you to consider the personal side. Owners raise rents because they depend on that income to survive. Isn’t that the ultimate goal, invest well- retire well?