721–730 of 1001 posts
Earlier quoted context omitted.
No, just leaving them vacant while the value increases.
SF Metro vacancy rate is below the national average for large metro areas.[0] [0] https://www.sfchronicle.com/realestate/article/An-estimated-...
Earlier quoted context omitted.
I am a CA landlord of a single house. Keeping track of “market rate” is an annoying exercise and I tend to just leave the rate unchanged for multiple years (3-5) then bring it up in one go. The last time I did this the rent increased ~12%. Before, the tenant was happy because they got below market rent for 4 years, and I was happy because I could defer pricing work without long term penalty or risking a move-out duri…
You can still do it that way. But instead of raising the rent 12% in one year, you can just raise it by 7% one year and then by 4% the next year. The tenant still gets below market rent for 4 years, you and can defer pricing work for as long as you want without penalty or risking a move out during a busy year. I think you might be overly worried for your situation. Your 12% example is an amortized difference of at mo…
$1000 +7% = $1070, $1070 +4% = $1112.80
$1000 +12 = $1120.
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We currently have a drastic under provision of a good to the tune of 3.5 million homes in CA alone. This under provision is not because building new homes isn't profitable, it is because realtors, landlords and homeowners are actively blocking new supply in order to extract above market rents from desperate people. Adding a rent cap of MORE THAN DOUBLE inflation will have no affect on supply, it is ridiculously profi…
> it is ridiculously profitable to rent out your property right now I'd be curious if you can share specific numbers on where this is true? Where in CA can I buy a house/apt and rent it out for more than the mortgage+insurance+taxes+maintenance? A link to the MLS listing would be appreciated. Every now and then I look at housing costs vs. rental income to consider buying some investment property. But the numbers neve…
'Maybe' in the case of buying a new property now to rent. But it's clearly the case for many or there wouldn't be places to rent.
Earlier quoted context omitted.
I am a CA landlord of a single house. Keeping track of “market rate” is an annoying exercise and I tend to just leave the rate unchanged for multiple years (3-5) then bring it up in one go. The last time I did this the rent increased ~12%. Before, the tenant was happy because they got below market rent for 4 years, and I was happy because I could defer pricing work without long term penalty or risking a move-out duri…
Was the tenant happy when you increased it? Increasing rent 12% in one go effectively kicks out most tenants. A smaller annual increase will give them time to adjust to market conditions and choose over a longer period whether or not to move and to save up to do so. You are doing no one any favors except short-term renters who never get an increase. In other words, your so-called benefit is actually a detriment to lo…
Unclear on why doing it all at once is worse than doing it regularly and extracting more rent in the period in between. Is the theory that they will be unable to adjust their budget in 60 days?
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At a maximum 5% increase per year, it takes 37 years for a $500 unit to catch up to the $3000 market price. So this law doesn't help that much with that particular case.
I think the example was that this law will not create such a scenario, in the way that previous rent control schemes have. The example given is of a 500% increase in rent, by definition no rent control law should make such an increase possible in a short time frame.
Eg a law could allow any increase up to some benchmark, and up to 5% per year when above the benchmark.
(No clue whether that would be a good idea or not.)
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But this is not what the new bill is about. It doesn't cap total costs, it allows 5% per year increase, it doesn't apply to new homes, etc.
> It doesn't cap total costs, it allows 5% per year increase, it doesn't apply to new homes If you tell everyone that you cannot increase more than 5% a year, this is used as a signal to all landlords to increase 5% a year. It's a coordination mechanism. And it helps hedge for years in which the market rent has increased by more than 5% and the landlord is unable to adjust. A commenter who is a landlord confirmed thi…
Landlords already charge as much as the market can bear. Coordination isn't really necessary.
Earlier quoted context omitted.
Was the tenant happy when you increased it? Increasing rent 12% in one go effectively kicks out most tenants. A smaller annual increase will give them time to adjust to market conditions and choose over a longer period whether or not to move and to save up to do so. You are doing no one any favors except short-term renters who never get an increase. In other words, your so-called benefit is actually a detriment to lo…
I have done this twice with the same tenant without complaint or moveout. My tenant was presumably getting basic inflation based increases at work, which offset most of the delta. Unclear on why doing it all at once is worse than doing it regularly and extracting more rent in the period in between. Is the theory that they will be unable to adjust their budget in 60 days?
Let's say the rent is $1000/month (for simplicity). That's $12000/yr in the first year. If you increase the rent by 12% ever 4 years they'll have 3 years of paying $1000/month, followed by a 4th year of $1120/month and so on.
If you instead raised it yearly by 2.87%, which give-or-take is the same as a 12% one-off increase we can calculate the net rent paid over the period in the two scenarios:
$1000*12*3 = 36000
r=1000;x=1.0287;
(r*x^1*12)+(r*x^2*12)+(r*x^3*12) =~ $38106
Earlier quoted context omitted.
I am a CA landlord of a single house. Keeping track of “market rate” is an annoying exercise and I tend to just leave the rate unchanged for multiple years (3-5) then bring it up in one go. The last time I did this the rent increased ~12%. Before, the tenant was happy because they got below market rent for 4 years, and I was happy because I could defer pricing work without long term penalty or risking a move-out duri…
You can still do it that way. But instead of raising the rent 12% in one year, you can just raise it by 7% one year and then by 4% the next year. The tenant still gets below market rent for 4 years, you and can defer pricing work for as long as you want without penalty or risking a move out during a busy year. I think you might be overly worried for your situation. Your 12% example is an amortized difference of at mo…
It’s not a lot of work, but my FT job isn’t being a landlord, and we’re talking about a property that nets maybe $8k/year. It’s been a better rate of return than the stock market, but the alpha is small relative to my SWE salary.
I guess another possible outcome of this is pushing marginal small landlords out, or pushing them to use property management firms since the fees possibly start making more sense. Neither of these seem like good outcomes to me.
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> The building was purchased, "refurbished" and the rent was reset to a very high number. And if someone was willing to pay that number, then that's what the place was worth.
True, but if someone is already using it, it's shitty to increase the price that much. It makes it a bait-and-switch: offer for a reasonable price first, and once the family is all settled, jump a massive price increase on them. That's absolutely something that needs to be banned by law.
Tenants could ask for contract terms that forbid such raises.
Or, if landlords are not forthcoming, they could take out insurance.
And yes, such insurance would need to have its terms written carefully. And it probably doesn't exist as a product at the moment. But eg sponsoring the development of such insurance would be an easier to justify action by the government than a law. Also less likely to backfire.
In any case, the underlying problem is lots of pent up demand for building, and permits only being given out in a trickle. If there was more building, landlords couldn't pull those tricks, at least not profitably.