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why.
I dont mean newly built rental property where one gets amenities like pool and exercise room,I mean plain old no thrill apts where rent goes up every year by 5%?
why all of a sudden it jumps to thousand(s) of dollars,it is the same old same old apt?
Supply and demand. As a landlord I can only charge what renters will pay.
Location: Was Midvalley Oregon; Now Eastside Seattle area
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Gotta to keep the values high.
Gotta make a profit.
Gotta be competitive else I mighta as well sell out and either take another property off the rental market (SFH) or let the new owner raise the rents to cover his purchase price.
Gotta cover depreciation on durables (appliances) and expenses on wear (paint, carpets).
High prices on SFH are dragging rental prices up. Low prices on SFH are pushing rental prices down.
And quite frankly, I could sell out and make more money with less risk on a +4% total return or 3% CD.
YRMV
Some of the increase is for the reasons others have mentioned but most of the increase can be attributed to investment companies increasing the number of properties they are buying which puts buying pressure on prices.
Not long ago on CNBC they mentioned investment companies were buying 25% of houses on the market. In the 4th quarter of 2021 they bought 18.4% of the homes on the market, an increase from 12.6% a year earlier. In the 4th quarter of 2021 investors bought over 30% of homes on the market in Charlotte and Atlanta, and just under 30% in Jacksonville, Las Vegas & Phoenix. To say that isn't the biggest reason rents have increased would be a level of denial only an ostrich could achieve. https://www.nytimes.com/2022/04/23/u...ng-market.html
There's going to be an eviction explosion/homelessness crises the likes we haven't seen before in terms of sheer numbers. People in my city have a hard enough time trying to pay a few hundred dollars for rent, but it has now ballooned to over $1,000 in many of the apartment buildings and houses cost even more.
In 2019 my mother, who's in her 80s, owed around $60,000 on her mortgage. I knew at the time her house was only worth about that much and if she had to sell would be lucky to get that much. Today she could get $92,000 easily and probably over $100,000. A comparable house down the street went for six figures not long ago.
Capitalism is the greatest system absent of the elusive utopia, however unfettered capitalism that allows our citizens to be taken advantage of to this degree is absolutely obscene. Our politicians have failed us by not putting safeguards in place to prevent landlord financial abuse of their tenants.
Bottomline: Greed is the main driving force behind the rising cost of housing to the degree we've seen.
Capitalism is the greatest system absent of the elusive utopia, however unfettered capitalism that allows our citizens to be taken advantage of to this degree is absolutely obscene. Our politicians have failed us by not putting safeguards in place to prevent landlord financial abuse of their tenants.
If you can’t beat ’em, join ’em. Why not become a landlord yourself?
Maybe you can set an example and help stop the abuse you see happening around you.
Covid rent moratoriums where landlords lost money and now have to jack up rents to make up for it.
Inventory at historic lows so supply v demand favors landlords over tenants. Here in Knoxville, apartments are 99% full. That is a historically low vacancy rate.
Home prices have become unaffordable for most buyers, so some of the pressure taken off renting by buyers has stopped. So there are more people renting. More competition for the same number of units means landlords can charge more.
Cost is reflecting what people are willing to pay. Landlords aren’t charitable organizations… they offer a residence at a price and someone pays it. Why such a large spike in the past few years? I suppose people are willing to pay more… and have more capacity to do so…
It's called greed. The property management companies are pulling in record profits and raising rents at will with no repercussions given no regulations or oversight is in place in most cities/states. The Orlando area (where I live) has the dubious distinction of having the lowest average income of all major metro areas and has rental values on par with cities where salaries are 30% higher, making for some scary inequity situations for the nearly 50% who identify as renters here. Many are fixated on the exit door to states where one can live comfortably, versus the monthly struggle.
Some of the increase is for the reasons others have mentioned but most of the increase can be attributed to investment companies increasing the number of properties they are buying which puts buying pressure on prices.
Not long ago on CNBC they mentioned investment companies were buying 25% of houses on the market. In the 4th quarter of 2021 they bought 18.4% of the homes on the market, an increase from 12.6% a year earlier. In the 4th quarter of 2021 investors bought over 30% of homes on the market in Charlotte and Atlanta, and just under 30% in Jacksonville, Las Vegas & Phoenix. To say that isn't the biggest reason rents have increased would be a level of denial only an ostrich could achieve. https://www.nytimes.com/2022/04/23/u...ng-market.html
There's going to be an eviction explosion/homelessness crises the likes we haven't seen before in terms of sheer numbers. People in my city have a hard enough time trying to pay a few hundred dollars for rent, but it has now ballooned to over $1,000 in many of the apartment buildings and houses cost even more.
In 2019 my mother, who's in her 80s, owed around $60,000 on her mortgage. I knew at the time her house was only worth about that much and if she had to sell would be lucky to get that much. Today she could get $92,000 easily and probably over $100,000. A comparable house down the street went for six figures not long ago.
Capitalism is the greatest system absent of the elusive utopia, however unfettered capitalism that allows our citizens to be taken advantage of to this degree is absolutely obscene. Our politicians have failed us by not putting safeguards in place to prevent landlord financial abuse of their tenants.
Bottomline: Greed is the main driving force behind the rising cost of housing to the degree we've seen.
The way I see it, rental rates only raise to what people will pay. There won’t be a homelessness/eviction crisis. It wouldn’t make financial sense to property investors. Neither process is profitable.
An 80 year old still paying a mortgage on a sub-$100k home is another story, totally unrelated to rental rates.
If you can’t beat ’em, join ’em. Why not become a landlord yourself?
Maybe you can set an example and help stop the abuse you see happening around you.
Because, irony.
People on the outside looking in think what they think, yet if they hold the belief that being a landlord is a money printing enterprise, they’ll never know for sure because they’ll just whine about it and chant “capitalism bad”. Actual landlords will be matter of fact and explain costs/profitability/risks and some do quite well, some have bad luck, some are just families trying to make the best of their circumstances, some are young people trying to claw their way up, some are conglomerates… but yeah best of luck to those adamant they can’t win
Taxes and insurance always go up, never down. The landlord is not running a charity, so must cover the expenses.
My son rented his house for about 5 years to the same family. At first, he cleared about $200. a month. The tenants husband died and she had 4 kids. My son only raised the rent by $50. a month, every year. Finally, at about $1300. a month he was losing a few hundred a month, so decided to sell.
The house was bought as a rental property and is rented for $1900.
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