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Old 11-10-2010, 01:22 PM
 
92,540 posts, read 90,167,936 times
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we just got our renewal and with 1 year rent stabilized leases at 2.25% and 2 year at 4.5% the 2 year is far more expensive. it you take a 1 year at 2.25% rents would have to go over a 4% increase on a 1 year next year just to be more then the 2 year.

as an example: if your rents 100 bucks now the 2 year would be 104.50 for 24 months or 2508.oo for 24 months....the one year is 102.25 for 12 months or 1227.00 for the year and if the following year was the same as this year that would add another 1255.00 for a total in 24 months of 2482.00

dont assume automatically 2 year is cheaper ,it may not be ..
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Old 11-10-2010, 01:53 PM
 
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Your math is correct. However the inherent risk is the assumption that next year will be the same as this year. If you are incorrect, it will cost you. So you are paying a small premium to lock-in your rent for the next 2 years, vs paying less now and taking the risk that next year may be greater and you will then pay more for both a 1 year or 2 year lease.
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Old 11-10-2010, 01:55 PM
 
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Next year has to go over a 4% increase on a 1 year. i dont see that happening..this year was 2.25%....
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Old 11-10-2010, 02:02 PM
 
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Correct. But the point was the risk involved. If you feel confident then the 1 year is the better bet financially. But at the end of the day, you never know what tomorrow brings, so you are rewarded with a marginally lower rent by accepting the risk.
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Old 11-10-2010, 04:33 PM
 
92,540 posts, read 90,167,936 times
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we got quite a bit of time left before we have to worry about rent rent increases doubling in one year.

the point with the thread is most folks think the 2 year is always the better deal. this past decade was far from it playing out that way.. you may have one 2 year period where you didnt pay more going with the 2 year.
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