The big apartment rent increases keep coming... (Seattle, Vancouver: real estate, 2015)

[ctr88]

Just got another rent increase today. My rent has gone up 25% ($300) since I moved here 2 yrs and 9 mos ago. I have a average 1 bedroom probably about 600-650 sf (this is not one of the new nice apartments), covered parking. Apartment is pretty average, it's clean and decent but no upgrades...early 1990's kitchen & bath, cheap cabinets, vinyl floors, formica counters, cheap wall heater, cheap carpet, cheap doors, etc... I pay $1,425/mo in rent. The landlord passes water and garbage on to tenants so that is another $50/mo. So with everything out the door rent + utilities + electric + internet...I am almost at $1,600/mo for a really average 1 bedroom. I'm technically in the Central District on the Cap Hill border. And I have looked around the Seattle rental market, and I still think I have a decent deal despite my rent going up $300 in 2 yrs 9 mos. I could not improve my situation without moving to much less desirable area out in the boonies. It's getting to if you want a decent fairly nice 1 bedroom apartment with parking in a close in decent part of town you are STARTING at say $1,700-$2,000/mo.

I can afford to buy pretty easily, but I have been lazy and not sure if I'm going to stay here long term or where I want to live long term, so I have held off on buying for flexibility puropses. Also, buying is a huge pain that can take months of your life of intense research and hunting, something I have been procrastinating doing (especially since I did a lot of intense buying of rental properties from 2009-2012 where I lived before I moved up to Seattle, and that burned me out on real estate). I also hate competing to buy in hot seller markets, I got spoiled buying in my former city from 2009-2012 post crash where buyers were in control and great deals were everywhere.

I think we all know this already, but Seattle is moving very quickly towards one of the most expensive places to rent anywhere in the country outside Manhattan and the SF Bay. I'm not sure what is going to put the breaks on the rent increases, the additional new supply of new units that came on the market in 2014 and 2015 certainly has not yet.

[Hemlock140]

Your landlord probably read that the average 1 bedroom in Seattle is at $1,615
and gave you a break by not increasing it to that much at once. I would expect it to go up again. You really can't blame landlords for taking advantage of the opportunity to make some money, that's their business. The problem is that despite many new apartments, people still want to move here and demand drives prices. The new ones are more like $2,000/month or more, so anything older goes even faster. If you don't want to pay that much and decide to move out, the place will be rented again in a day or two. The only way to beat high rent is to buy, if you can afford it. The fixed rate mortgage payment remains the same, as your pay increases over the years. Taxes go up but even a big jump like we just had is still under $1000/year.

[ctr88]

I definitely have no problem with the landlord raising rents since I am a landlord myself and have been for over a decade. However I usually don't raise rents much on good tenants since I do not want turnover or more tenant demands/complaints.

I will have to run the rent vs. buy #'s. I think a lot of people make a mistake by not comparing apples to apples when running rent vs. buy #'s...i.e. if you rent in a nice area like Queen Anne, Cap Hill, Ballard, etc...compare with buying a property in these areas, don't compare with buying a property in say Lynwood or Burien. Also often you have initial rehab costs and other maintenance costs when you buy that you don't have when you rent (and closing costs are substantial). I get a 10-14% low risk return on my capital in passive real estate investments, so if I have to put say $100k down on a property purchase it will lock up that money and I will get no return on it. So that is the loss of $10,000 a year right there that has to be factored in for me in rent vs. buy. Ultimately I think I will choose to still rent despite the rent increases for the flexibility if offers.

It's just interesting how quickly rents are moving up here in Seattle where it's finally going to be on par with the more expensive cities in the U.S. Housing in this area was undervalued for a long, long time for what you got. No more.

[shaylahc]

Yes rents here are crazy. We moved out of our first rental home, because the landlord was raising the rent by hundreds every year. I guess he thought he owned the Taj Mahal LOL Our current rental is from an individual (no experience, no property management company) and he is very reasonable with increases. We found our current rental on Craigslist.

My daughter lives in a 1 bedroom in Woodinville (apartment) and she pays $1700 a month, up from $1500. I am sure the price will go up again when her lease comes up in December. I think that's crazy. I pay $2385 for a 4 bedroom house, $1700 for a 1 bedroom apartment is crazy.

[ctr88]

Yes smaller mom and pop self-managing landlords are less likely to increase rents for sure. I am like this myself with my own rentals. I self manage mine and hardly ever raise rents on good tenants. Note to self next time, look for mom & pop managed rentals.

[BATCAT]

Originally Posted by ctr88;41459084I

will have to run the rent vs. buy #'s. I think a lot of people make a mistake by not comparing apples to apples when running rent vs. buy #'s...i.e. if you rent in a nice area like Queen Anne, Cap Hill, Ballard, etc...compare with buying a property in these areas, don't compare with buying a property in say Lynwood or Burien.

Ugh, that's the thing, isn't it?

Ms. BATCAT and I rent on Capitol Hill and that allows us to both walk to work. (about 10 min. for me, 20 for her) We could buy, but I think our limit would be around 300 or so and it would mean moving waaaay out somewhere. And I can barely stomach the thought of going from a brief walk to a long, gross commute.

So rent it is, for now at least. We currently pay almost 1500 for a one bedroom in an older building, no amenities, a single washer and dryer shared by about 20 units, crummy baseboard heat.

It's just frustrating; I've lived here 20 years and finally clawed my way into a decent salary, which now allows me to live in the same kind of place I did as a broke 25-year old.

[Legacy Bear]

No sense chasing like you said. If you couldve bought, you would‘ve done so already. Unless you can really see yourself there the next 7-10 years in Seattle with the possibility of a downturn to which you will have to weather, then it makes no sense to chase.

If you can easily buy then when you buy is never a problem.

[RVD90277]

hmm, maybe i should raise rent on my rental in woodinville. i rent out the in-law unit of my house. it's a decent 1 bedroom, 1 bathroom unit with a nice living room, kitchen with a small island, fridge, and washer/dryer. size is around 650 sq ft or so? it has it's own entrance and parking although parking is outside in front of the door. utilities and internet are included, cable tv is $20/mo. i charge $1100/mo.

but i probably won't because i like the current renter and even though it has it's own entrance, it is still attached to my home so i need someone that i can trust in there. i'll probably never raise rent since i have a fixed rate mortgage and my mortgage isn't going to change.

i have been considering a condo in seattle for rental purposes but the association dues are too high to make the numbers work out. some of these places have $500-$1000/month in association dues!

[ctr88]

Originally Posted by BATCAT

Ugh, that's the thing, isn't it?

Ms. BATCAT and I rent on Capitol Hill and that allows us to both walk to work. (about 10 min. for me, 20 for her) We could buy, but I think our limit would be around 300 or so and it would mean moving waaaay out somewhere. And I can barely stomach the thought of going from a brief walk to a long, gross commute.

So rent it is, for now at least. We currently pay almost 1500 for a one bedroom in an older building, no amenities, a single washer and dryer shared by about 20 units, crummy baseboard heat.

It's just frustrating; I've lived here 20 years and finally clawed my way into a decent salary, which now allows me to live in the same kind of place I did as a broke 25-year old.

Great points. I think you hit the nail on the head on what many are thinking. It can be worth paying a high rent to have the conveniences of being in a close in walkable part of Seattle, vs. buying some average place in a much less attractive (in so many ways), and further out area. But depending on how fast the rent increases keep coming, there may be a breaking point. My work is not tied to Seattle, I can live anywhere in the U.S.. I live in Seattle because I like the area. But if rents keep escalating I may have to look for another part of the U.S. to live. The thought of living in Everett, Lynwood, Auburn, Kent, etc...just doesn't get me excited me so much. I like Seattle and moved here because I live right in a nice part of Seattle & close access to restaurants, sports events, music venues, etc.... But I haven't warmed up much to the surrounding areas, plus the traffic is murderous getting into Seattle if you did move way out.

[ctr88]

Are Seattle rents now more expensive than Vancouver B.C.? I think they might be. The only places I can think of with higher overall rents than Seattle in all of the USA and Canada are SF Bay, Manhattan (and maybe parts of Brooklyn). Boston may be slightly higher too. I think Seattle is probably on par with D.C. and SoCal (I think Seattle may have moved ahead of San Diego in rents recently). The rest of the U.S. is cheaper.