Looks like Rents are going up - but not really surprised

[Tiny]

How did the Pandemic effect your 2020 rent cost (the lease you signed during the Pandemic Months)  or a lease signed January thru say June 2021?   Or how did it effect the cost of rent for someone you know who rented during those time frames?   

If you are a landlord (I think most of the landlords here retained rent paying tenants despite the Pandemic) did you maintain, lower, raise the rent over the course of the Pandemic as leases ended?    


This is probably behind a paywall: 
www.nytimes.com/2021/10/15/business/economy/rent-inflation.html


But the article in a nut shell: 

The increase in real estate prices combined with the lower numbers of recent construction of said houses AND apartments due to the 2008 crash ALONG with the higher demand for such places to rent is driving the rental prices up.

Terrell McCallum, a private wealth adviser in Dallas, spends a lot of time thinking about markets and interest rates. He knows that the Federal Reserve targets 2 percent annual price increases on average, so it was a shock when he learned that his rent would increase a whopping 10 percent this year.

I wonder if his rent cost went up for his 2020 rental?   


FWIW: I think some of the increase is because rents didn't increase at all for at least one "lease cycle" during the Pandemic. I know my tenant paid the same rental amount from the lease signed in late 2019 thru to now. My tenant appears to have remained employed and paid rent as agreed. They got a year of no increase in rent. I'm OK with this - the rent continues to cover all my expenses for it plus a little extra (and my equity in it sky rocketed!!!) .

Over the last 11 years the rent has typically gone up 8 to 10% - especially if the current tenant is NOT renewing. When a tenant renews it's a little bit of pot luck - sometimes the rent goes up 3% sometimes 5% depending on what is happening with other rentals in the area - either way it is a bit of a discount.

[bean29]

Our tenants are relatives.  they are paying at least $250 less than market.  I have no say in it.  My DH decided.  He has his reasons, and I have to agree he is probably right, but I would prefer he get on the maintenance that needs to be done and that we put it on the market and sell.  My DH does not ever increase the rent on a tenant that stays.  

I think a lot of duplexes that landlords held where they could not evict a non-paying tenant will be fixed up and sold.  At least some of the units involved will probably be empty until the sale closes.  We do have a lot of "High End" rentals being built around us. 

I have not had a raise in years, I don't know if the increase in minimum wages is here to stay, or if they will trend back down once the pandemic is over.  DH's business income year over year was pretty much the same, although the employees did get an increase in wages.  We expect income to fall for 2021 and 2022. 

[buystoys]

We raised our rent by $25 per month.  We're under market now, but we have really good tenants and want them to stay.

[Tennesseer]

There are businesses buy up homes and paying cash to the home seller.  Then these businesses are renting out these homes and charging a pretty penny in rent.

Sone 7,000 homes in my city have been sold to these buyers.  In many areas here your next-door neighbor may be a renter instead of a home owner.

Yesterday there was a piece of mail delivered to me but it was addressed to  the previous homeowner.   I bought the home from him 25 years ago.  It was an offer to buy the house by one of these businesses. 

[nidena]

My neighbors rent a house for ~$800/mo.  It's the same footprint and layout as mine except mine has a finished basement.  I bought July 2020 and pay just over $600/mo.  The house across from me is going on the rental market soon.  It, too, is the same footprint and layout except the finished basement includes a primary suite.  So, instead of a 3/1, it's a 4/2. Me, personally, I wouldn't want a bedroom that doesn't have egress windows but that's me.  I'm curious to see what they list as the rent.

[Deleted]

Oct 15, 2021 11:13:24 GMT -5 Tennesseer said:

There are businesses buy up homes and paying cash to the home seller.  Then these businesses are renting out these homes and charging a pretty penny in rent.

Sone 7,000 homes in my city have been sold to these buyers.  In many areas here your next-door neighbor may be a renter instead of a home owner.

Yesterday there was a piece of mail delivered to me but it was addressed to  the previous homeowner.   I bought the home from him 25 years ago.  It was an offer to buy the house by one of these businesses. 

Warning, long rant ahead…

I am feeling some kind of way about all these investors buying all the homes for sale in the area. I got irritated with a coworker last year because he sold his house to an investor, vs the woman that made a solid offer on his house. Selling to the investor got him some thousands of dollars more, but I still felt some type of way about it and told him so. Not that he cared lol.

So I have a house that I don’t live in. People call, text or mail me stuff all the time, inquiring about buying that house. It’s in the price range that I’ve read is the biggest market in the city.

I’m not interested in selling it. Especially not now that I see what these investors are doing to the local market. If the current trends continue, people in this area might have to settle for renting instead of buying, because there will be so little inventory. I really feel some type of way about that. So if I did decide to sell my house next week or whatever, I wouldn’t sell to an investor, even if it cost me money.

I don’t like the thought that my kids or grandkids, or Mister’s kids could work their asses off to be successful, and still not be able to buy a house in the area, because investors swooped in and bought so many houses to turn into rentals.

My house has increased substantially in value over the last year or so, according to Zillow. The house I live in has increased in value about $80k since we bought it 2 years ago. I could’ve bought it on my own back when we bought it, but if I had to buy it today at current prices, I couldn’t afford it, even if I didn’t have the other house. And my income is more than the median household income for the area. 

I seriously just can’t make sense of how that is supposed to work as far as homeownership and affordable housing when so many people in the area have income that is even less than mine.

[Tiny]

I don’t like the thought that my kids or grandkids, or Mister’s kids could work their asses off to be successful, and still not be able to buy a house in the area, because investors swooped in and bought so many houses to turn into rentals.

To this point - I have to wonder about investors (are we talking small time flippers? or state or nation wide companies?) and how long they will hold the houses.
How will they maintain their "profit" if there are fewer renters in the future (say 3 to 5 years from now)? How will they maintain the houses in 10 years (houses may need new appliances, may need a roof or water heater or something else big ticket)?

I expect small time flippers to rent out and the sell the house before they have to sink any more money into the house (so sell it within 3 to 5 years).
I'm not sure what I expect from a "corporate" landlord... I'm not sure how they can maintain profitability once the houses they are renting out have a "big expense" or two - I'm guessing within 3 to 5 years.

Especially when you think about how the houses being purchased at inflated prices (and the cost of "rehabbing" is also at an all time high - lumber prices for example).

I don't see how this is sustainable. Especially if the value of houses doesn't keep going up - in 5 years or 10 years they may not be able to sell the house for more than they paid for it. I get that they got all the profit-y goodness during those years - but it still feels like not a good thing to gamble on.

That's the thing about rentals - they need to be maintained over time and owning multiple Single Family Homes means a bigger expense to maintain (3 roofs, 3 yards, 3 garages, 3 HVAC systems) than say a traditional 3 flat (with all the units under one roof, one garage, one yard, one boiler to heat all the units). or maintaining a 12 unit or more complex of apartments. Not to mention that rents tend to align with amounts that people can afford to pay in rent.

[Deleted]

Oct 16, 2021 14:58:45 GMT -5 Tiny said:

I don’t like the thought that my kids or grandkids, or Mister’s kids could work their asses off to be successful, and still not be able to buy a house in the area, because investors swooped in and bought so many houses to turn into rentals.

To this point - I have to wonder about investors (are we talking small time flippers? or state or nation wide companies?) and how long they will hold the houses.
How will they maintain their "profit" if there are fewer renters in the future (say 3 to 5 years from now)? How will they maintain the houses in 10 years (houses may need new appliances, may need a roof or water heater or something else big ticket)?

I expect small time flippers to rent out and the sell the house before they have to sink any more money into the house (so sell it within 3 to 5 years).
I'm not sure what I expect from a "corporate" landlord... I'm not sure how they can maintain profitability once the houses they are renting out have a "big expense" or two - I'm guessing within 3 to 5 years.

Especially when you think about how the houses being purchased at inflated prices (and the cost of "rehabbing" is also at an all time high - lumber prices for example).

I don't see how this is sustainable. Especially if the value of houses doesn't keep going up - in 5 years or 10 years they may not be able to sell the house for more than they paid for it. I get that they got all the profit-y goodness during those years - but it still feels like not a good thing to gamble on.

That's the thing about rentals - they need to be maintained over time and owning multiple Single Family Homes means a bigger expense to maintain (3 roofs, 3 yards, 3 garages, 3 HVAC systems) than say a traditional 3 flat (with all the units under one roof, one garage, one yard, one boiler to heat all the units). or maintaining a 12 unit or more complex of apartments. Not to mention that rents tend to align with amounts that people can afford to pay in rent.

A local news channel did a story on it last week. I think they are usually referred to as out of town investors. I’m not sure exactly what that really means though.

Until recently, housing costs were fairly low here, in comparison to other places in the country. It makes sense that investors would be interested in buying here. But they are messing everything up for the people that live here. It’s not a wealthy city. I don’t even see the increases in rent prices being sustainable. 

[weltschmerz]

Oct 15, 2021 9:21:29 GMT -5 Tiny said:

How did the Pandemic effect your 2020 rent cost (the lease you signed during the Pandemic Months)  or a lease signed January thru say June 2021?   Or how did it effect the cost of rent for someone you know who rented during those time frames?   

If you are a landlord (I think most of the landlords here retained rent paying tenants despite the Pandemic) did you maintain, lower, raise the rent over the course of the Pandemic as leases ended?    


This is probably behind a paywall: 
www.nytimes.com/2021/10/15/business/economy/rent-inflation.html


But the article in a nut shell: 

The increase in real estate prices combined with the lower numbers of recent construction of said houses AND apartments due to the 2008 crash ALONG with the higher demand for such places to rent is driving the rental prices up.

Terrell McCallum, a private wealth adviser in Dallas, spends a lot of time thinking about markets and interest rates. He knows that the Federal Reserve targets 2 percent annual price increases on average, so it was a shock when he learned that his rent would increase a whopping 10 percent this year.

I wonder if his rent cost went up for his 2020 rental?   


FWIW: I think some of the increase is because rents didn't increase at all for at least one "lease cycle" during the Pandemic. I know my tenant paid the same rental amount from the lease signed in late 2019 thru to now. My tenant appears to have remained employed and paid rent as agreed. They got a year of no increase in rent. I'm OK with this - the rent continues to cover all my expenses for it plus a little extra (and my equity in it sky rocketed!!!) .

Over the last 11 years the rent has typically gone up 8 to 10% - especially if the current tenant is NOT renewing. When a tenant renews it's a little bit of pot luck - sometimes the rent goes up 3% sometimes 5% depending on what is happening with other rentals in the area - either way it is a bit of a discount.

Montreal is a city of renters. My rent didn't go up at all in 2020. I expect a $10 increase in the spring, during lease renewal time.
I'm paying $905 for a 2 bedroom apt, about 1,000 sq feet with brand new appliances thrown in, and heat and hot water paid by the 'landlord'.   

Not a real landlord. Apartment buildings are owned by big corporations now.

[Tennesseer]

Oct 16, 2021 15:08:48 GMT -5 @pinkcshmere said:

Oct 16, 2021 14:58:45 GMT -5 Tiny said:

To this point - I have to wonder about investors (are we talking small time flippers? or state or nation wide companies?) and how long they will hold the houses.
How will they maintain their "profit" if there are fewer renters in the future (say 3 to 5 years from now)? How will they maintain the houses in 10 years (houses may need new appliances, may need a roof or water heater or something else big ticket)?

I expect small time flippers to rent out and the sell the house before they have to sink any more money into the house (so sell it within 3 to 5 years).
I'm not sure what I expect from a "corporate" landlord... I'm not sure how they can maintain profitability once the houses they are renting out have a "big expense" or two - I'm guessing within 3 to 5 years.

Especially when you think about how the houses being purchased at inflated prices (and the cost of "rehabbing" is also at an all time high - lumber prices for example).

I don't see how this is sustainable. Especially if the value of houses doesn't keep going up - in 5 years or 10 years they may not be able to sell the house for more than they paid for it. I get that they got all the profit-y goodness during those years - but it still feels like not a good thing to gamble on.

That's the thing about rentals - they need to be maintained over time and owning multiple Single Family Homes means a bigger expense to maintain (3 roofs, 3 yards, 3 garages, 3 HVAC systems) than say a traditional 3 flat (with all the units under one roof, one garage, one yard, one boiler to heat all the units). or maintaining a 12 unit or more complex of apartments. Not to mention that rents tend to align with amounts that people can afford to pay in rent.

A local news channel did a story on it last week. I think they are usually referred to as out of town investors. I’m not sure exactly what that really means though.

Until recently, housing costs were fairly low here, in comparison to other places in the country. It makes sense that investors would be interested in buying here. But they are messing everything up for the people that live here. It’s not a wealthy city. I don’t even see the increases in rent prices being sustainable. 

Home buying competition from investors could impact black-white wealth gap in Shelby County

Financial experts have warned the rising home prices in the Memphis area could further impact the wealth divide between black and white residents in the area.

For many Americans, property is their largest asset.

But out-of-town investors have bought thousands of homes in Shelby County in the past two years. It has made it difficult for local residents to purchase homes.

Many of the homes purchased by investor groups are under $200,000. That price point has squeezed out many local buyers. Financial experts said it not only impacts where people may live, but potentially their bottom line.

"Those who are renting have nothing to pass on," said Financial Advisor Charles Sims with Sims Financial Group.

Sims said for most Americans, and especially for American Americans, owning their home has been key to creating generational wealth. Real estate typically appreciates in value, and that can be passed on.

"One way of moving generational wealth is to buy real estate," said Sims. "The previous generation has used the real estate to live in. And then it is passed on to the next generation. A lot of other cultures have done that. People of color, in the last decade or two, have begun to buy more real estate," said Sims.

Rest of article here: link

[Deleted]

Oct 16, 2021 17:36:55 GMT -5 Tennesseer said:

Oct 16, 2021 15:08:48 GMT -5 @pinkcshmere said:

A local news channel did a story on it last week. I think they are usually referred to as out of town investors. I’m not sure exactly what that really means though.

Until recently, housing costs were fairly low here, in comparison to other places in the country. It makes sense that investors would be interested in buying here. But they are messing everything up for the people that live here. It’s not a wealthy city. I don’t even see the increases in rent prices being sustainable. 

Home buying competition from investors could impact black-white wealth gap in Shelby County

Financial experts have warned the rising home prices in the Memphis area could further impact the wealth divide between black and white residents in the area.

For many Americans, property is their largest asset.

But out-of-town investors have bought thousands of homes in Shelby County in the past two years. It has made it difficult for local residents to purchase homes.

Many of the homes purchased by investor groups are under $200,000. That price point has squeezed out many local buyers. Financial experts said it not only impacts where people may live, but potentially their bottom line.

"Those who are renting have nothing to pass on," said Financial Advisor Charles Sims with Sims Financial Group.

Sims said for most Americans, and especially for American Americans, owning their home has been key to creating generational wealth. Real estate typically appreciates in value, and that can be passed on.

"One way of moving generational wealth is to buy real estate," said Sims. "The previous generation has used the real estate to live in. And then it is passed on to the next generation. A lot of other cultures have done that. People of color, in the last decade or two, have begun to buy more real estate," said Sims.

Rest of article here: link

That is what my Grandmother tried to do. She owned 2 houses, and wanted them to benefit her descendants if it only meant we would always have somewhere to live. But my Mom and my brother messed all of that up.

I never really wanted to sell my other house. When I started considering relocating or just moving in the same area, I still intended to keep that house, hopefully to eventually have a source of passive income after I retired. It will be paid off before I retire, and in the meantime, the mortgage payment is much less that what I can “afford”. What’s happening in the local housing market makes me even more determined to not sell it. 

There’s so much going on currently, that I’d really like to leave some real estate to my children. They have both told me after I moved, how much that house means to them. It represents stability to them because that’s where they grew up. And they appreciate having lived in that one house during most of their childhoods, when now they have matured enough to understand it was different from their peers and friends whose parents moved a lot.

So I’m kinda trying to do what my Grandmother tried to do. Mister is interested in buying more houses, but even if we don’t, we have 2 to pass on to our respective children. My other house goes to my children and I have no issue with the house we live in going to his children…… as long as I have the right to live here as long as I need or want to, if something happens to him, heaven forbid.

[Knee Deep in Water Chloe]

Our state actually legislated rent control a session or two ago. 

one random article about that

[formerroomate99]

Rents around here have gone up. The cost of houses has more than doubled in the last seven years,. It’s mostly driven by California transplants.

The city planners are very concerned about this, and are trying to balance adding as much high density housing as they can without destroying everyone’s quality of life.