Nobody wants to see rent increases, or any price increase for that matter. But, what if we considered the good part about it. Before you click away, hear me out.
Top two reasons rent increases are necessary:
- Actual Property expenses: Property owners have various expenses associated with owning and managing rental properties, such as property taxes, insurance, HOA’s, maintenance and repairs, utilities, and property management fees. Rent increases are necessary to cover these expenses and ensure the property remains apart of the rental market.
- Property repairs and improvements: Property owners have to be prepared for when, not if, when a major repair is needed. Sometimes several. A major leak, roof repair typically invest in upgrades or renovations to enhance the value, quality, and desirability of their rental units. These improvements justify rent increases, as tenants may be willing to pay more for a higher-quality living environment. Over time, the cost of living typically increases due to inflation. This means that the prices of goods and services, including housing-related expenses, rise. Property owners need to increase rents to keep up with the increased costs they face in maintaining and managing the property.
It’s important to note that rent increases can vary depending on local market conditions, landlord-tenant regulations, and the individual circumstances of each property. There are many legal limits on how much and how frequently rents can be increased. Prior to AB1482 most renewal leases averaged a 3-5% increase after the passage of AB 1482 alot of owners are taking the full legal amount out of necessity. Landlords are very rarely making millions. Owning property is a marathon not a sprint.
To be clear, without rent increases, most owners would need to remove the home from the rental market. By selling, or even leaving it vacant if they cant keep up with property expenses. Rental properties provide options and opportunities to a huge population. Rent increases are necessary to sustain rental properties available.