Double-digit rent hikes are (potentially) on the way

  • metta

    Posts: 39130

    Jan 14, 2011 12:54 AM GMT
    Home prices are still dropping in many areas of the country. I read one story that estimated that real estate would drop 10% on average in the US ( of course, it varies by state, city, as well as area).

    However, I think that it is important to be aware of that it is possible that rent will be going up. For those that rent, it may be good to start increasing your savings so that you have a down payment on a home when they hit bottom. Getting a fixed mortgage, you will not have to concern yourself with rent increases.

    It might be something that renters should at least start thinking about.

    Double-digit rent hikes are on the way
    http://www.marketwatch.com/story/double-digit-rent-hikes-are-on-the-way-2011-01-13?siteid=nwhpf
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    Jan 14, 2011 1:10 AM GMT
    Good news for us investors, who provide housing for others.
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    Jan 14, 2011 1:12 AM GMT
    True_blue_aussie saidGood news for us investors, who provide housing for others.


    heartless icon_razz.gif
  • rnch

    Posts: 11524

    Jan 14, 2011 1:31 AM GMT
    i own (well, the mortgage company and I do) 2 duplex homes here in new orleans, 4 monthy rental incomes, right on the edge of one of the "gay-friendly" neighborhoods.

    since katrina, my insurance has doubled, property taxes has risen, and maintainence/repair cost also have risen. a fence board, for example, has doubled in price. romex (electrical wire) is three times what it cost in 2004 (before hurriance katrina..or "pre-K" as we say here).

    my nitt-picking renters constantly want upgrades: kitchens, bathroom, flooring, cedar fencing, landscaping....even though they are paying entry level rates for this area.

    my rental income has NOT doubled or trippled since august, 2005 (pre-K). i have slowly, modestly increased my rental rates about 30% since katrina; with my renters whinning and biotching everytime.

    hoping the WSJ is correct and accurate!

    BRING ON THE RENTAL INCREASES, BAYY-BEEEEE!!!
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    Jan 14, 2011 1:36 AM GMT
    what are some of the bigger property management firms out there?

    I just started investing in the market and i have some interest in AIV but it's only ever declining in value.
  • SoBeCamera

    Posts: 74

    Jan 14, 2011 1:50 AM GMT
    the article is bullshit...in miami downtown the occupancy is below 40% everywhere rent signs...in miami beach every second house is having a for rent sign.
    double digit rent raise? this is crazy...guys, stop believing every bullshit someone writes...
    i can pay a journalist to write the article i want.this doesnt make it more true...;)
    if the value of your house is just 30% of what you paid 5 years ago, you cant raise the rent for the next years or people will move to the next empty house...is that simple.
    NO rent hikes are on the way...
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    Jan 14, 2011 1:56 AM GMT
    I think the article has in mind those 18-24 year old young people who can't afford to rent a whole house, but need to rent apartments. There are also the small families who rent 2-4 bedroom apartments.

    But Miami, you're talking about the state where people go to retire, right?
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    Jan 14, 2011 1:59 AM GMT
    It happened to me in the early 90's. Moved in when the town was depressed due to factory closings. Got a great place, and quiet (due to high vacancy). After a couple of years, they started hiking the rent 10% or more every month. Had to find a cheaper place.

    Own now, but despite falling values, the insurance and property taxes keep going up by double digits. I'm sure the same thing is happening to rental properties.
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    Jan 14, 2011 2:04 AM GMT
    Sigh SB, that was sort of implied, and intended as a joke. Too bad I didn't put the smiley on.
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    Jan 14, 2011 2:25 AM GMT
    I can see many on RJ demanding federal Government-mandated national rent control, to help promote economic "justice". icon_rolleyes.gif
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    Jan 14, 2011 2:50 AM GMT
    where i live the vacancy rate for the city hovers between .5% and 2.5% and has been that way for the past 4 years. Rental inscreases were measured in 100's of % before the city and province legislated increase restrictions. Now you can only increase the rent 3x per year, and only up to certain percentages, and evictions can take years.
  • rnch

    Posts: 11524

    Jan 14, 2011 3:26 AM GMT
    mindgarden said....but despite falling values, the insurance and property taxes keep going up by double digits. I'm sure the same thing is happening to rental properties.


    (long sigh) YUP!! icon_cry.gif
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    Jan 14, 2011 3:38 AM GMT
    rnch saidi own (well, the mortgage company and I do) 2 duplex homes here in new orleans, 4 monthy rental incomes, right on the edge of one of the "gay-friendly" neighborhoods.

    since katrina, my insurance has doubled, property taxes has risen, and maintainence/repair cost also have risen. a fence board, for example, has doubled in price. romex (electrical wire) is three times what it cost in 2004 (before hurriance katrina..or "pre-K" as we say here).

    my nitt-picking renters constantly want upgrades: kitchens, bathroom, flooring, cedar fencing, landscaping....even though they are paying entry level rates for this area.

    my rental income has NOT doubled or trippled since august, 2005 (pre-K). i have slowly, modestly increased my rental rates about 30% since katrina; with my renters whinning and biotching everytime.

    hoping the WSJ is correct and accurate!

    BRING ON THE RENTAL INCREASES, BAYY-BEEEEE!!!


    I had 12 rental units that I got sick of dealing with and sold them 10 years ago, I'm sure glad I got out of the business when I did. rents and taxes are low here, but let someone else have all those headaches. You have my sympathy !!! LOL !!! I can only imagine what its like in the New Orleans Real Estate MKT.
  • rnch

    Posts: 11524

    Jan 14, 2011 4:09 AM GMT
    [quote][cite]realifedad said....I had 12 rental units that I got sick of dealing with and sold them 10 years ago, I'm sure glad I got out of the business when I did. rents and taxes are low here, but let someone else have all those headaches. You have my sympathy !!! LOL !!! I can only imagine what its like in the New Orleans Real Estate MKT. [/quote]

    i have a very smart, aggressive bull dog of a property manager. it it wasn't for her dealing with these azzhoal renter i would had never purchased the first rental haus, much less the second.

    she earns her ten percent EVERY month!
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    Jan 14, 2011 4:28 PM GMT
    socalfitness saidI can see many on RJ demanding federal Government-mandated national rent control, to help promote economic "justice". icon_rolleyes.gif


    That would be a good start. icon_wink.gif
  • Celticmusl

    Posts: 4330

    Jan 14, 2011 4:40 PM GMT
    I see tons of "for rent" signs and empty houses.
  • CuriousJockAZ

    Posts: 19133

    Jan 14, 2011 4:45 PM GMT
    When I lived in Venice, CA the city had a "Rent Control" law that didn't allow landlords to increase rent more than something like 5% per year. Maybe all states should enact such laws to keep rents affordable.
  • rnch

    Posts: 11524

    Jan 14, 2011 4:54 PM GMT
    CuriousJockAZ saidWhen I lived in Venice, CA the city had a "Rent Control" law that didn't allow landlords to increase rent more than something like 5% per year. Maybe all states should enact such laws to keep rents affordable.


    sounds good!

    as long as the same cap is applied to property taxes, insurance, repair/maintainence parts and labor costs and utility rates..... icon_idea.gif
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    Jan 14, 2011 5:24 PM GMT
    rnch said
    CuriousJockAZ saidWhen I lived in Venice, CA the city had a "Rent Control" law that didn't allow landlords to increase rent more than something like 5% per year. Maybe all states should enact such laws to keep rents affordable.


    sounds good!

    as long as the same cap is applied to property taxes, insurance, repair/maintainence parts and labor costs and utility rates..... icon_idea.gif

    Very good point. To be fair we should consider even more of the owner expenses and apply the cap on food, gas, clothing, maybe everything!
  • metta

    Posts: 39130

    Jan 14, 2011 7:37 PM GMT
    CuriousJockAZ saidWhen I lived in Venice, CA the city had a "Rent Control" law that didn't allow landlords to increase rent more than something like 5% per year. Maybe all states should enact such laws to keep rents affordable.


    I have a friend that has rentals in Venice Beach. They get around that by leasing out instead of renting.
  • MisterT

    Posts: 1272

    Jan 14, 2011 8:21 PM GMT
    southbeach1500 said
    q1w2e3 said

    But Miami, you're talking about the state where people go to retire, right?


    1) Miami isn't a state, it is a city.

    2) Your picture of Miami is that of the 1970s/1980s.


    Miami is in the state people go to retire, I don't think think he was calling Miami a state.

    Not just the 70's/80's I have a few friends here who's parent's moved to Florida within the last 10 years to retire, and two of those sets of parents moved to the greater Miami area. And look at the state stats for age of people in Florida. Even though there are a lot of young people there, it is still an accurate assessment to say a lot people move there to retire.
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    Jan 14, 2011 8:53 PM GMT
    q1w2e3 saidSigh SB, that was sort of implied, and intended as a joke. Too bad I didn't put the smiley on.

    I see all kinds of different landlord responses to the depressed housing market, which hit South Florida hard. Some residential properties have had rental rates drop, because there are too many vacancies on the market right now. One reason is that too many units were built in the last decade. That would seem to be simple supply & demand.

    And also many private owners are seasonal and often anticipating ultimate retirement here, or had bought to flip them and are now stuck with them because nobody's buying. So they're renting their homes & condos to try to avoid foreclosure, or from having to sell at a depressed price, if they can sell at all.

    I know people who are charging rent that is below their mortgages, hoping things will turn around, so they don't lose their investment. Meanwhile they continue to live elsewhere. Wilton Manors has a huge condo complex that opened just a few years ago and is still largely vacant, with some great rental deals there. And some good buys, too, at foreclosure prices.

    At the same time, making no sense to me, I've seen a big spike in commercial rental prices. So that business owners we know are being forced to move & downsize, or simply close up shop. Tons of empty commercial properties here, yet their rents are going up.

    I guess unlike private residential owners, business property owners must see a continuous profit, and raise leases to cover vacancies. But then I observe them ending up with even more store & office vacancies on their hands, which seems like a death-spiral to me.
  • SoBeCamera

    Posts: 74

    Jan 17, 2011 1:19 AM GMT
    rnch said
    CuriousJockAZ saidWhen I lived in Venice, CA the city had a "Rent Control" law that didn't allow landlords to increase rent more than something like 5% per year. Maybe all states should enact such laws to keep rents affordable.


    sounds good!

    as long as the same cap is applied to property taxes, insurance, repair/maintainence parts and labor costs and utility rates..... icon_idea.gif


    insanely amateur answer....the value of almost every real estate in the usa dropped by at least 50% and you guys still talking of increasing the rent?
    the financial system was near collapsing just a few years ago because of the same ignorance of the economic laws...you cant sell crap as a prime product and wondering that nobody is buying your shit.
    somebody has to control the greedy old men making the decisions...its not working that way anymore.markets controlled by one or two big corporations are not free ... and people are being overcharged for basic services ..
    The US is not a Disney world. You have to wake up and start thinking again!
  • rnch

    Posts: 11524

    Jan 17, 2011 3:19 AM GMT
    SBC sounds like a renter! icon_lol.gif
  • SoBeCamera

    Posts: 74

    Jan 18, 2011 7:12 PM GMT
    rnch saidSBC sounds like a renter! icon_lol.gif


    again an amateur answer.and you are wrong again...im just educated...icon_smile.gif
    and please dont post crappy photos of a crappy home and a cheap car and pretend you have something to say about a real estate investments...
    i guess thats good only for fox news..:icon_smile.gif