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heatherleigh
05-25-2010, 05:03 PM
We are currently leasing a house through a property management co. We signed a 1-yr lease back in Aug. of last year. My family has decided we would like to stay for an additional year.

Today, while one of the staff from the property management co. was at my house doing the annual inspection, he mentioned they would be increasing our rent if we signed up for another year. He claims the market has gotten much better so they know they can get more $ for it. He said it wasn't set in stone, because he hadn't discussed it with the owners yet. We pay $2400 per month, and I refuse to pay another dime.

My husband called the co. and told them that he wouldn't pay an extra dollar per month. They said they'd probably just put the rent up another $50 per month.

I know it would be a hassle to move, but I kind of think it's the principle. We are great tenants who pay every month, on time, and who keep the house up perfectly. I think it's poor business sense for them to try to increase the rent when they'll have to now find renters to move in and pay that (which is high to begin with).

I guess I'm going to start looking around at other properties in the area. I hate to budge on this, even if it is only $50.

We live in CO, so not in a high-dollar city like SF or NY, just to give an idea.

mrsklamc
05-25-2010, 05:09 PM
I don't think you should budge either. The markets not that much better yet. That seems crazy high for rent- see what kind of
mortgage you
qualify for.

disneysteve
05-25-2010, 05:09 PM
I think it's poor business sense for them to try to increase the rent

Sorry, but I have to disagree. I think it would be poor business sense for them to not increase rent on an annual basis to keep up with expenses and keep the price competitive for the area. Utility costs rise, taxes rise, maintenance costs rise, staff salaries rise, pretty much all costs of ownership rise. Why shouldn't the rent rise?

I own my home and I can tell you that it costs me more to live here today than it did a year ago and it will cost me more still a year from now. I wish that weren't the case but it is.

My sister's princess
05-25-2010, 05:11 PM
We had a mid-lease increase not too long ago. The option was we release you from your lease, or you pay more.

I like where I live, so I stayed.

phred52
05-25-2010, 05:14 PM
Sorry to hear that . They probably figured you'd pay the increase instead of dealing with the hassle of moving. I'm holding my breath, my daughter is in the same situation, will find out soon the particulars of signing another year lease. I'm praying the price stays the same!

momsully
05-25-2010, 05:16 PM
We live in CO, so not in a high-dollar city like SF or NY, just to give an idea.


I am not sure where you are living in Colorado, but there are alot of rental houses available right now in our area. You should look around and then go back to the property management company with your findings. Looking around will give you an understanding of the fair market value for your rental as well and then you can better decide if the $50/month is worth not having to move.

Cheshire Figment
05-25-2010, 05:17 PM
I wonder about where the property management company says He said it wasn't set in stone, because he hadn't discussed it with the owners yet. The rent should be set by the owner, not the PM company. Have you talked to the owner? It is the owner's decision, not the PM company's decision.

disneysteve
05-25-2010, 05:27 PM
You should look around and then go back to the property management company with your findings. Looking around will give you an understanding of the fair market value for your rental as well and then you can better decide if the $50/month is worth not having to move.
I agree. I think that's exactly what you should do. Despite what I said above, I wouldn't just cough up extra money if the rent increase wasn't justifiable.
The rent should be set by the owner, not the PM company.
That is kind of strange. The PM might suggest an increase to the owner based on market conditions but the ultimate decision lies with the owner.

ClarabelleCowFan
05-25-2010, 05:30 PM
Sorry, but I have to disagree. I think it would be poor business sense for them to not increase rent on an annual basis to keep up with expenses and keep the price competitive for the area. Utility costs rise, taxes rise, maintenance costs rise, staff salaries rise, pretty much all costs of ownership rise. Why shouldn't the rent rise?

I own my home and I can tell you that it costs me more to live here today than it did a year ago and it will cost me more still a year from now. I wish that weren't the case but it is.

::yes:: Exactly.

We are about to be a landlord and a renter at the same time since we can't sell our home here in MD and the Army is moving us to GA. We wanted to make sure we didn't incur a rent increase on the rental house in GA so we signed a 2 year lease. We knew full well that if we signed a 1 year lease that there was a good possibility that the rent could be increased and we would have to either pay a higher rate or go through with the hassle of moving.

The rental markets right now are hopping - at least in the areas we live in and are moving to (and I suspect most cities with military bases nearby) and sales are very low. So many homeowners are upside down and have had to walk away from their homes and those wanting to buy homes are having a harder time securing financing. People who used to own or want to own homes just can't right now and are forced to rent. Supply of rental homes is low and demand is high - rents will certainly increase.

If the property management company does raise your rent and you do agree to pay the increase and stay then consider signing a longer lease to lock in the rate and avoid a future increase.

SaraJayne
05-25-2010, 05:32 PM
Holy cow, you could live in a house you own for $2400 a month!

That would be the mortgage on a pretty nice house!

Is purchasing a house in your plans at all. Now would be a great time to start looking. ;)

lovetoscrap
05-25-2010, 05:34 PM
I am not sure where you are living in Colorado, but there are alot of rental houses available right now in our area. You should look around and then go back to the property management company with your findings. Looking around will give you an understanding of the fair market value for your rental as well and then you can better decide if the $50/month is worth not having to move.

Agree:thumbsup2

You might also remind them of their costs involved in advertising for new tenants, the man hours to show the place and do the paperwork, and the cost to make any minor fixes and cleaning (not that you aren't great tenants but there are always wear and tear things that have to be done before new people come in), and any broker fees if that is common in your area.

But be prepared that if you do stay at the same cost then after the next year they could be suggesting an increase of $100/mo.

4Seasons
05-25-2010, 05:41 PM
Sorry, but I have to disagree. I think it would be poor business sense for them to not increase rent on an annual basis to keep up with expenses and keep the price competitive for the area. Utility costs rise, taxes rise, maintenance costs rise, staff salaries rise, pretty much all costs of ownership rise. Why shouldn't the rent rise?

I own my home and I can tell you that it costs me more to live here today than it did a year ago and it will cost me more still a year from now. I wish that weren't the case but it is.

We have several rental properties and have been landlords for 22 years.
While, in theory, what you are saying is true to an extent, it really boils down to what the local economy in a particular area dictates.

I would be VERY hesitant to raise the rent on any of our properties at this time. YES our expenses have increased, property taxes gone up, homeowner assn. fees have gone up (thanks to foreclosures and homes sitting empty with no one paying the fees) and everything in general seems to have gotten more expensive.

HOWEVER..........in a competitive market, it may not make much financial sense in the long run. A $50/month increase = $600 year. If there are several comparable homes on the rental market in the area, it can take weeks (or longer) to find another suitable tenant to occupy the property. Advertising, cleaning, carrying costs, etc. can quickly eat that $600 and then some. Then who's to say the next tenant who occupies the home will take good care of it? TRUST ME............I've seen the way some people live and the damage they can do. Even if they start out good, family situations change, people have issues, their lives change, taking care of their rental home might be on the bottom of their priority list. That $600 can be a drop in the bucket when it comes to repairing drywall, painting, repairing damaged carpet, etc. to a property where the tenant didn't take care of it.

I speak from 22 years of experience...........hopefully I've learned a few things along the way.

I would encourage the OP to contact the owner directly. If your market is competitive (meaning there are several comparable rental homes in your area with rent at or below what you are currently paying), gather a few pages of current listings (maybe consult a RE agent to get a listing of what's on the rental market) and contact them. Be your own advocate and explain why you don't feel your rent should be increased. Take pictures (if the owner doesn't do any property inspections on their own, which they likely don't because they have a management company) and let them know how wonderfully you are caring for their investment. I'd be willing to bet money they'd rather take a "sure bet" than roll the dice. I know I would.
The management company may be trying to increase their own income, not the owner's.

Inigo
05-25-2010, 05:56 PM
We had a mid-lease increase not too long ago. The option was we release you from your lease, or you pay more.

I like where I live, so I stayed.

If you have a lease with a specified amount, they shouldn't be able to raise your rent mid-lease unless there is a specific clause allowing the increase.

JerseyGirl84
05-25-2010, 06:20 PM
I definitely agree with the landlord of 22 years. I have also been a landlord for 16 years. Can you believe we have had the same tenant all those years? I can't even imagine the cost of turning the place over and fees associated with it. We have been so lucky - she pays all the utilities except the monthly maint. fee (it's a townhouse) and of course our taxes. Our yearly increases are not that bad and we have seen our equity grow - even in this bad market (it was worse in 1994). Plan on selling it at some point to send a kid or two to college. Won't raise the rent now, just want her to stay!!

My sister's princess
05-25-2010, 06:44 PM
If you have a lease with a specified amount, they shouldn't be able to raise your rent mid-lease unless there is a specific clause allowing the increase.

They gave us the option to leave with no penalty.

lovemygoofy
05-25-2010, 07:13 PM
We just had our rent increased by $50 after a year in our house. I know that the owners are still paying alot OOP for this house and apparently the HOA also raised rates which is part of the reason for the rent increase.

I think there is more than the management company just wanting to raise the rent. We also go through a management company and I've never even talked to the owners of the house. Any changes I made, planting things and doing painting, I've had approved from the management company.

I was told that if we chose to sign another lease for the second year it would go up the extra $50.

Wouldn't it cost more in the long run to move? I do'nt think anyone is trying to rip anyone off.

MAH4546
05-25-2010, 07:41 PM
If free market principals bother you, feel free to move to Cuba or Venezuela.

disneysteve
05-25-2010, 08:03 PM
apparently the HOA also raised rates which is part of the reason for the rent increase.

Wouldn't it cost more in the long run to move? I do'nt think anyone is trying to rip anyone off.

Right. If HOA raised their rates or had a special assessment, the owner needs to pass that cost on to the tenant.

And moving would certainly cost at least $600 between boxes, packing materials, the mover, taking time off from work, etc.

pandora174
05-25-2010, 09:54 PM
If free market principals bother you, feel free to move to Cuba or Venezuela.

Jeez a little harsh on the OP. She's just venting that her rent was raised & somehow you feel she should move to a Communist country ? :rolleyes:

mrsklamc
05-25-2010, 10:02 PM
If free market principals bother you, feel free to move to Cuba or Venezuela.

I'm quite in favor of capitalism- which means letting the free market determine prices, rather than delusions about the state of the economy- which is not so improved in Colorado as to justify a $600 per annum increase. Recovery is just beginning on the coasts and the middle states tend to trend 12-24 months behind

bootc3
05-25-2010, 10:03 PM
Sorry to hear this. Nobody likes to pay more for anything, me included. I think it all comes down to how long you plan to stay there. If it is only 1 more year, I guess you ask yourself are you going to pay 2400 somewhere else or could you save more? I think for 600 for one more year I would stay just to avoid the hassle, cost, and time of moving. Good Luck! JMO

r&kmommy
05-25-2010, 10:16 PM
If free market principals bother you, feel free to move to Cuba or Venezuela.

ROFLMAO!!!

OP you can't be forced to pay more rent, nor can you be forced out if you don't pay it, unless in your lease there's a clause that says the landlord may increase rent.

As for a new lease in August, if I were in your shoes and the $50/month is doable, I'd stay there if I were happy with the house (which it sounds like you are if you were already thinking of staying) . . .

(ps - YIKES on that much rent!! Our mortgage is $2500. . . )

WDisneyMom
05-25-2010, 10:55 PM
Where in the world do you rent in CO? We rent in a nice complex in a Denver suburb and the kids are in cherry creek school district...they go to a GREAT school. Our rent is 1050 and I thought that was high!!

richmond282
05-25-2010, 11:15 PM
ROFLMAO!!!

(ps - YIKES on that much rent!! Our mortgage is $2500. . . )

Our rent is 1050 and I thought that was high!!

OP, Oh My! Our mortgage payment is $1325/month which includes escrow for our insurance and taxes. $2400 for rent seems insane to me.

LaurenLC
05-26-2010, 12:23 AM
OP, Oh My! Our mortgage payment is $1325/month which includes escrow for our insurance and taxes. $2400 for rent seems insane to me.

It depends on where you live.

cats mom
05-26-2010, 02:39 AM
OP, Oh My! Our mortgage payment is $1325/month which includes escrow for our insurance and taxes. $2400 for rent seems insane to me.

Holy cow, you could live in a house you own for $2400 a month!

That would be the mortgage on a pretty nice house!

Is purchasing a house in your plans at all. Now would be a great time to start looking. ;)


It's all relative folks. Where we live $2,400 a month to rent a 3 bedroom SFR would be an absolute steal.

And the price to rent differential is still such that the only thing you might be able to buy for a similar monthly payment would be a condo (unless you had a huge chunk of change to use as a downpayment of course).

Buying is not always the best option.



Right. If HOA raised their rates or had a special assessment, the owner needs to pass that cost on to the tenant.

Only if the local rental market will bear the costs that the owner "needs" to pass on to the tenant.
Because your statement reminds me of sellers who refuse to price at market value becaue they "need" to get more than buyers are willing to pay. The market is what it is.

And moving would certainly cost at least $600 between boxes, packing materials, the mover, taking time off from work, etc.

True that.

However, as 4Seasons mentioned, it would also likely cost a landlord at least $600 to turn a rental over and get new tenants in.


Do some research and figure out what current market value is in your area so you can make an informed decision about what to do OP.
Good Luck!

Inigo
05-26-2010, 03:12 AM
They gave us the option to leave with no penalty.

And I would have responded, no thanks. I have a lease and it does not allow you to raise my rent during the term of the lease. Here's my usual payment, and I will continue to make that payment until the lease expires.

bumbershoot
05-26-2010, 03:45 AM
And I would have responded, no thanks. I have a lease and it does not allow you to raise my rent during the term of the lease. Here's my usual payment, and I will continue to make that payment until the lease expires.

Agreed.



OP, I would wait to stress until/unless you hear it from the owners that the rent has been raised. (or you hear from the mgmt people that the owners have raised it)

As for raising the rent being OK....meh. Our landlady LOVES us, and loves us so much that when we were stressing about rent and DH's job last year, she *lowered* our rent by a couple hundred a month. I know she isn't making anything off of us (we know what she paid, we know when she bought, and know she was having troubles with her other couple properties), but she knows we take care of the place, we don't cause trouble, we leave the place cleaner than it was when we moved in (we've rented from her before, in two difference places), and we're worth keeping. She shows her appreciation for us in that way; we show our appreciation for her in our own ways!

plummer925
05-26-2010, 09:14 AM
I mean this in the utmost respect to all posters -

If you are paying almost $25,000 a year in rent, why not look into buying a house? Your rent payment is through the roof - your house payment would be less!

A $200,000 mortgage for 10 years at a 6% interest (we have terrible credit and was approved for 5.4%) payment is $2220 a month. After 10 years you OWN it (that's still leaving you an extra $200 a month for taxes and maintenence).

Just a thought....

4Seasons
05-26-2010, 10:05 AM
Only if the local rental market will bear the costs that the owner "needs" to pass on to the tenant.
Because your statement reminds me of sellers who refuse to price at market value becaue they "need" to get more than buyers are willing to pay. The market is what it is.

Absolutely correct.
It's the basic law of supply and demand. If there is more supply than demand, the owner will have to eat those costs to keep the property rented.

If the OP can afford the increase (and is willing to pay/accept it), is in a tight rental market, loves the house/location and wants to stay, doesn't want to deal with moving, etc. then of course they have little option other than to pay the increased rent if the owner implements it. However, again I would be willing to bet that the owner, if approached correctly, would agree to not increase the rent for another lease term.

I've talked to many people over the years who've gotten into the real estate investment/residential rental business who "thought" you buy a house, rent it out, the tenant covers the expenses and they make a profit, done deal.
It doesn't work like that. Our first 2 properties we had negative cash flow (not alot but there was no profit) for the first several years. We learned alot from that, more than I could ever explain in just a few paragraphs.
It's not cut and dried like alot of people think.

I wish the OP good luck with whatever decision they make!

jsmith
05-26-2010, 10:16 AM
[QUOTE][If you are paying almost $25,000 a year in rent, why not look into buying a house? Your rent payment is through the roof - your house payment would be less!
/QUOTE]
Maybe-it depends on where you are-what interest rate you qualify for-and that sort of thing-as well as what you do-military personnel-particularly officers who move frequently are better off paying rent in this economy-otherwise you risk purchasing a home that you can not sell in two years when you move and then having to deal with a foreclosure if you cant rent it-purchasing a home-like a lot of other things-is not something people on a discussion board really should be giving advice about because you simply dont know what the posters situation is.
OP-you dont say where in CO you are-in Boulder-some parts of Metro Denver, Aspen, or Vail 2400 or even 2450 is probably very competitive-my son and two friends are paying about 1200 for a 3 bedroom apartment in broomfield-it was the cheapest thing they could find close to school-Boulder is out rageous-and rents in Ft Collins are high for the same reason. By the same token-if you are in Colorado Springs-Pueblo,Grand Junciton or any of the farming areas in southwest colorado-thats just ridiculous and im sure you could find something more reasonable. I would explore your options though-some of those areas the rental markets are pretty tight because people are afraid to buy homes ( esp CS and the pueblo-pueblo west areas.)

fkj2
05-26-2010, 10:23 AM
You should look around and then go back to the property management company with your findings. Looking around will give you an understanding of the fair market value for your rental as well and then you can better decide if the $50/month is worth not having to move.

Well, I think that's good advice. You might discover that a comparable home could be rented for less, in which case you could counter to the management company that a reduction in rent might be in order. If there are homes sitting vacant, either for sale or rent, you've got some advantage.

ClarabelleCowFan
05-26-2010, 10:23 AM
Absolutely correct.
It's the basic law of supply and demand. If there is more supply than demand, the owner will have to eat those costs to keep the property rented.

If the OP can afford the increase (and is willing to pay/accept it), is in a tight rental market, loves the house/location and wants to stay, doesn't want to deal with moving, etc. then of course they have little option other than to pay the increased rent if the owner implements it. However, again I would be willing to bet that the owner, if approached correctly, would agree to not increase the rent for another lease term.

I've talked to many people over the years who've gotten into the real estate investment/residential rental business who "thought" you buy a house, rent it out, the tenant covers the expenses and they make a profit, done deal.
It doesn't work like that. Our first 2 properties we had negative cash flow (not alot but there was no profit) for the first several years. We learned alot from that, more than I could ever explain in just a few paragraphs.
It's not cut and dried like alot of people think.

I wish the OP good luck with whatever decision they make!

Exactly! Not all landlords/owners are making money.

DH and I are in that situation with our house in MD. There will be a negative cash flow of almost $500 a month after we pay the mortgage, taxes, insurance, HOA and property management firm. We have no choice. The house wasn't selling and even if we did sell then it would have been at a huge loss (over $20k) as well. This way at least we can float the property for a few years and hope the market rebounds so that we can sell it at a wash or at minimal loss. There is also the chance that the Army sends us back here in 2 years. :headache:

The old school of thought was that property was always a sound investment - who could have foreseen the drastic drop in property values that are happening now.

DisneyDizzy
05-26-2010, 10:35 AM
OP, we recently had our rental home foreclosed on. So take that into account when moving. If you are confident that you have a stable owner, I'd consider paying the increase and staying put. There are so many people who can't sell their house, move away and rent it then find they can't keep up with the payments.

We had to take a lot of unexpected expenses to move while we could. The law would allow us to stay through the end of our lease but I was 7 months pregnant and am due the day our lease would have been up. So, we were able to go ahead and move. The owners of this house have owned it for a lot longer and we feel it is more stable. We also rented through a property management company and we had to tell THEM the house was in foreclosure.

We move a lot for my husbands job and owned a house we lost a great deal of money on when we sold it to move to another state. We'll be renting for several more years while the market stabilizes before we go down that road again. Had to wipe out our savings and retirement just to make up the difference. Buying isn't always the best answer.

heatherleigh
05-26-2010, 11:50 AM
DisneyDizz, that is the reason we are not looking to purchase a house at this time. Pretty much, the same reason you gave. We do move a lot, but are hoping to settle here in CO, for a long time. Of course that is contingent on my husband's employment, which is going great for the time being.

Okay, everyone I have an UPDATE! My husband was just at the property management co. meeting w/ them and got the run-down. I had incorrect info. It is not the property management co., but the OWNERS who need to increase the price. And it isn't by a mere $50 per month either. They want an additional $300.

Their mortgage on it (it isn't a rental property, it is their home) is probably a grand more than what our rent is. They claim they are losing too much monthly, and may want to do a short sale just to get rid of it. As of now, they are still on the fence about what to do. The house is owned by a dentist who moved to the midwest w/ his fam last year and opened up his own practice. I assume his current rent (considering their location) is minimal.

When you own a house of this value, you sort of know you aren't going to get the full mortgage amt when you lease it. You lease it to keep the home, and alleviate costs. We would have been thrilled to lease our old house out for half of our monthly mortgage, but wound up paying that and rent in another state (a couple yrs back). Again, when you get into this price range, you would be lucky to make your mortgage with renters.

Most people are not going to pay that much to rent in the area we live. PP, we do not live in Vail, Telluride, or Mountain Village. We live in the CO Springs area, black forest to be specific.

I'm afraid we are going to have to move now. We probably could swing the few hundred a month, but I'm not 100 percent sure I'd want to do that. Not to mention, it is out of our hands now anyway since the owner is confused over what to do.

DisneyDizzy
05-26-2010, 12:02 PM
With that info, I'd move. That was our exact situation. The owners decided to short sale so we had to deal with people coming in to see the house all the time with very little notice some days. It was annoying. I'm not the kind of person who could leave breakfast dishes in the sink knowing strangers were going through my house. And I'm a neat freak. My house is always clean. Also, having strangers going through our things made me uncomfortable. I had baby things spread out on my bed taking pictures one time and when we got home, after someone had looked at the house, the baby clothes were all messed up where the people looked through them. YUCK! I hated selling my own house let alone one for a landlord that couldn't even bother to pay their mortgage. The house foreclosed before they even got any offers on the short sale.

It was an upscale house in an exclusive neighborhood. We rented it because we had 2 weeks to find a place to live before moving 1800 miles across country. We figured it would, if nothing else, be big enough and safe. We're much happier in the new place even though it was a hassle to move at the time!

disneysteve
05-26-2010, 12:20 PM
I'd move, too. Not just because of the rent increase but because of the short sale issue. You could agree to stay and the place could get sold in a couple of months and you end up forced to leave anyway. I wouldn't want the uncertainty. I prefer to control my own destiny.

Poohbug
05-26-2010, 12:33 PM
If they are willing to sell short-maybe you can get a good deal.

cats mom
05-26-2010, 02:14 PM
The old school of thought was that property was always a sound investment - who could have foreseen the drastic drop in property values that are happening now.


Yes, and judging by many of the comments on this thread, that old school of thought is still alive and well. ;)


I mean this in the utmost respect to all posters -

If you are paying almost $25,000 a year in rent, why not look into buying a house? Your rent payment is through the roof - your house payment would be less!

A $200,000 mortgage for 10 years at a 6% interest (we have terrible credit and was approved for 5.4%) payment is $2220 a month. After 10 years you OWN it (that's still leaving you an extra $200 a month for taxes and maintenence).

Just a thought....


No, it's not a given that a house payment would be less than $2.400 a month.

I just did a search for any SFR in our area under $350,000.
My results: 4 houses, all of them short sales.
(ie: some of those prices are fishing prices, and an offer that low would never be accepted)
You might actually be able to get the 572 sq ft fixer-upper for the $210,000 list price though. :thumbsup2


If they are willing to sell short-maybe you can get a good deal.

It doesn't sound to me like buying is the best option for the OP right now, and that's OK!

Given the possible short and/or foreclosure in the owners future though, I'd be looking for another place to rent OP.

There are a lot of accidental landlords who are only landords because they couldn't afford to sell at market value, and they're just biding their time, hoping for a market turn around. That strategy might work out for some, it won't for others.

I do find it interesting that renters are the ones who probably should be doing credit checks on owners anymore. ;)

SandrA9810
05-26-2010, 03:15 PM
Last year when we moved into an apartment, we got a great price because of the promo. 2 months free rent or prorated over the length of the lease.

The market value in the area really doesn't call for the rent to be that high, even if it is gated. On top of that, they recently sold the property to a new company. And of course they always want to come in and change everything.

When we moved in, they went from apartments to refurbished condos back to apartments. So the place already had upgraded appliances, good cabinets, new faucets, I'm fairly sure new carpeting and the tiling looked newish too. Countertops were basic laminate.
They sent out a notice, that any one that was already in a lease, could get the new "upgrades" for an additional amount per month.
Really crappy washer/dryer - 25$ a month
Fake Granite countertops - 25$ a month
Fake Hardwood flooring - 50$ a month
unnecessary upgrades - 50$ a month... I think there were about 4-5 different things costing between 25-50$ a month more in rent. Or you could continue out your lease at the current price. But I think all apartments were getting the upgrades at the end of the lease term

So one year ago, they were renting 3 bedrooms for 884$ which would be a little below market. Now without upgrades they want 1050$ or more which is on the high side for the area. And any new tenants moving in are probably going to be paying closer to 1300$ which sends it way out of market value for the area. Especially considering 1300$ can get you a really nice 3/2 a few miles up the road in the really expensive neighborhood on a golf course. Just cause they want to be all fancy with fake granite and fake wood flooring, doesn't justify the area is ready for that price point.

In my process of moving out... I talked to two other people who were moving out as well after the 1yr. 10-20$ a month is reasonable for a rent increase. But for most people renting, their income hasn't increased and they can't take a hit of 50$ more a month.

taitai
05-26-2010, 03:40 PM
I am not sure what all the outrage is here. The owners are well within their rights to raise the rent at the time the renter signs a new lease. The renter signed a one year lease which is up for renewal. The owners want to raise the rent. The renter can choose to either pay the new price or move. It is all very easy. My guess is that as the lease is up in August, they need to let the owners know now, 60 days in advance, whether they will be renewing or not.

We own a LOT of rental property and often raise the rent each year.

If you do not want to pay a higher price, you can always negotiate. For instance, we have a tenant who agreed to do all the lawn work and snow shoveling in return for a discount on the rent. For us, that was a great deal so we agreed.

Good luck

ZachnElli
05-26-2010, 03:41 PM
I mean this in the utmost respect to all posters -

If you are paying almost $25,000 a year in rent, why not look into buying a house? Your rent payment is through the roof - your house payment would be less!

A $200,000 mortgage for 10 years at a 6% interest (we have terrible credit and was approved for 5.4%) payment is $2220 a month. After 10 years you OWN it (that's still leaving you an extra $200 a month for taxes and maintenence).

Just a thought....

Financing a house right now is extremely difficult. They aren't giving out loans as easily as they use to. As someone who had to write a check at the closing of selling my last house (meaning we lost our original down payment plus all our equity and still had to pay to cover closing costs), I have no down payment. You can't get loans with no down payment or even small down payments anymore. Coming up with a rental deposit and moving costs after dealing with unemployment was hard enough, but a 20% down payment is just impossible right now. Plus, who knows how the new job will pan out. This economy has been tough on some of us. And no, no ticker in my signature, I have no idea if we'll ever be able to go back to WDW.

mrsklamc
05-26-2010, 03:48 PM
I am not sure what all the outrage is here.



I don't see any outrage; just surprise that the owners would try to raise rent to something the market clearly won't bear.

The most recent post by the OP clarifies that they are just being rather short-sighted because they aren't really real estate investors-just people who are mistaken about the situation that they are in. They think that raising the rent will help them cover costs, but since it's doubtful they'll get a tenant at that rate, it's just going to end up costing the rental income they already had.

I agree that since they are in such a tenuous position it's best to move, OP.

disneyfans95
05-26-2010, 03:59 PM
cover closing costs), I have no down payment. You can't get loans with no down payment or even small down payments anymore. Coming up with a rental deposit and moving costs after dealing with unemployment was hard enough, but a 20% down payment is just impossible right now. Plus, who knows how the new job will pan out. This economy has been tough on some of us. And no, no ticker in my signature, I have no idea if we'll ever be able to go back to WDW.

This is what buying a house is supposed to BE! Sorry but my wife and I bought our first house last year. This was after years of saving up the 20% deposit. It was not impossible, but it just take times.

It bugs me that many people (not saying this poster is one) just act like owning a home is some right that you have. They don't want to save or act responsible with their money and expect banks to just hand over the cash.

So many people just assume they will gain equity in house purchases. I don't feel sorry for many of the flippers and/or the people that took out silly ARM loans, or did no money down type deals. You, as the buyer, have the accountablilty here.

Oh off my my soapbox.

For the OP, $300 bump is steep for an already high rent. Take a look around now and while moving stinks, that is over $3.5k going out the window a year.

daisyyy
05-26-2010, 04:20 PM
It seems like an awful lot, for them to ask in a bad market. Why is it your responsibility to pay for all that extra because they are paying too high of a mortgage. The bottom line is, if you love the neighborhood / schools, you have to weigh that into the fact that it's a hassle to move. On the other hand, if you have that kind of cash for rent every month, I'm sure you can find something and BUY. it is a buyer's market. I'm not really clear on all of the downpayment rules anymore, but It just seems like soooo much money on something you don't own. I'm sure it's not like you haven't thought of that before, too, but really, you could probably get a good price on a home. Hey, if you refuse to pay the extra money, and they can't sell short sale, then maybe you can get a good deal on a foreclosure on your street. You know, if they try to do a short sale, no one says the house has to be perfectly tidy when you're showing it. Nothing turns off a potential home buyer than underwear laying on the floor, and dishes piled in the sink. :laughing: (kidding... no flames please)...

ZachnElli
05-26-2010, 04:23 PM
Disneyfans95, I know what you are saying, that is how we bought our first house too. But so many people on these renting threads come in and say your rent is so high, just buy a house! It's not that easy. My DH and I bought our first home in 1994 and we saved every one of my pay checks for 2 years, living on his income alone. It's just way harder to do now that we have 3 kids and I haven't worked in 10 months and he was out of work for 6 months also.

ETA: I just reread disneyfans95 post and you said it wasn't impossible to get the downpayment, just takes time. Yeah, it is impossible when you are both out of work. Stop assuming so much when you read a post.

Ava
05-26-2010, 04:26 PM
This is what buying a house is supposed to BE! Sorry but my wife and I bought our first house last year. This was after years of saving up the 20% deposit. It was not impossible, but it just take times.

It bugs me that many people (not saying this poster is one) just act like owning a home is some right that you have. They don't want to save or act responsible with their money and expect banks to just hand over the cash.
I don't think the PP was saying people should not have to save their money for a down payment, or that banks should just hand over cash. My take on ZachnElli's post is that it's not as easy as, "Oh, if you're paying $2400 a month in rent you should just buy a house." Obviously one has to save up for a down payment before one can buy a home. For some people, like yourselves, it can take many years but eventually you saved the cash and were able to buy. For others, who struggle just to pay their rent/bills & keep food on the table, they may never be able to achieve home ownership, no matter how frugal they are.

Handbag Lady
05-26-2010, 04:29 PM
I mean this in the utmost respect to all posters -

If you are paying almost $25,000 a year in rent, why not look into buying a house? Your rent payment is through the roof - your house payment would be less!

A $200,000 mortgage for 10 years at a 6% interest (we have terrible credit and was approved for 5.4%) payment is $2220 a month. After 10 years you OWN it (that's still leaving you an extra $200 a month for taxes and maintenence).

Just a thought....


Like others have said, it depends on where you live. I pay $2k in rent right now. For an apartment.

If you can FIND me a house at $200,000 where I live that is near-ish (one-hour drive) my work I'll eat my shoes.

cats mom
05-26-2010, 04:36 PM
I don't think the PP was saying people should not have to save their money for a down payment, or that banks should just hand over cash. My take on ZachnElli's post is that it's not as easy as, "Oh, if you're paying $2400 a month in rent you should just buy a house." Obviously one has to save up for a down payment before one can buy a home. For some people, like yourselves, it can take many years but eventually you saved the cash and were able to buy. For others, who struggle just to pay their rent/bills & keep food on the table, they may never be able to achieve home ownership, no matter how frugal they are.


And there are others who do have the downpayment and the income required to buy a house, but their situation is such that buying is not the best option for them at the moment.. whether that be because of their personal situation, the area they live in, etc., etc.

I'm really surprised at all the people who are pushing the OP to buy a house when she has already said that buying does not make sense for her family right now. :confused3


.

ClarabelleCowFan
05-26-2010, 05:15 PM
Like others have said, it depends on where you live. I pay $2k in rent right now. For an apartment.

If you can FIND me a house at $200,000 where I live that is near-ish (one-hour drive) my work I'll eat my shoes.

The real estate prices in Southern California are insane. I was on the phone with a friend of mine who is a realtor in LA today who told me he was having a hard time finding a 2 bedroom condo for less than $315k in a decent area. :eek:

I don't understand the push on this thread to BUY a home instead of rent. It is not always the best situation EVEN if you can get financing. Believe me, I would never have believed that either until this year. If you can afford to buy, can get a fixed rate mortgage and you plan to stay put in that house for at least 7 years or more then go for it but if you have to move more often than that I wouldn't do it. We stayed in this house over 3 years and are losing money.

OP - once the term "short sale" was even mentioned then I would start looking for another place to live. Good luck!

cm8
05-26-2010, 08:19 PM
I mean this in the utmost respect to all posters -

If you are paying almost $25,000 a year in rent, why not look into buying a house? Your rent payment is through the roof - your house payment would be less!

A $200,000 mortgage for 10 years at a 6% interest (we have terrible credit and was approved for 5.4%) payment is $2220 a month. After 10 years you OWN it (that's still leaving you an extra $200 a month for taxes and maintenence).

Just a thought....

:offtopic: but I love your signature!:thumbsup2

jsmith
05-26-2010, 10:09 PM
OP now that i know more about the circumstances-i dont know where your DH works-but you can definately find something less expensive to rent-your owners are being unrealistic-Black Forest is one of the area's that have taken a hard hit-i would move. If you are willing to live on my end of town you can find something very nice in the 1500 to 1800 dollar range-not out and in privacy like you have now but still adequate-that would mean making your children change schools however.

lovemygoofy
05-26-2010, 10:32 PM
And there are others who do have the downpayment and the income required to buy a house, but their situation is such that buying is not the best option for them at the moment.. whether that be because of their personal situation, the area they live in, etc., etc.

I'm really surprised at all the people who are pushing the OP to buy a house when she has already said that buying does not make sense for her family right now. :confused3.

This would be us. We have the money to purchase a house here and a downpayment. Heck our deposit and first month's rent is almost a downpayment in a normal housing area.

I pay $2450 a month for almost a 3000sqft house. The owner is still paying 400 OOP. We live in a great neighborhood and close to my husband's work. Knowing we'd only be here 3 years tops and NO WAY we could swing a mortage here AND live somewhere else we are choosing to pay this crazy rent.

In the end this is our best judgement because you'd be hard pressed to find a decent house in our area for less than what we pay now and not have a 500-600,000 mortgage. Good friends of ours here now pays more than $3,000 rent.

thebeesknees
05-27-2010, 10:50 AM
And there are others who do have the downpayment and the income required to buy a house, but their situation is such that buying is not the best option for them at the moment.. whether that be because of their personal situation, the area they live in, etc., etc.
.

This, exactly. We moved from CO to MD a few years ago and could have, in theory, "afforded" to buy a house rather than rent one. We had just sold our CO home for a decent profit and had enough for a down payment. However, the housing market in that area of MD was very high - the same house that would have sold in CO for $250K was running about $550K there. We only planned to be there for 2 years, so after thinking it over and figuring out how much we would have paid a Realtor to sell it for us (if it could be sold - that was about the time the market crashed), we decided to rent instead. Lots of people told us we were crazy to pay $2,000 a month to rent when we could have the equity, but I was so glad to be able to move back to CO at short notice without worrying about trying to sell a house. We were able to buy a nice house here before the market started to recover, so I think we already have some decent equity in it. Long story short, there are lots of reasons why it might make more sense to rent vs. buy for a particular family at a particular time.

OP, I hope you and your family are able to find a place that is reasonable for your budget. We have family with rental properties in the CO Springs area, so I know what the going rate down there is, and I do think you could probably find someplace that is running less per month in rent, but it is going to be a real hassle to move. Hope it all works out for you.

LaurenLC
05-27-2010, 11:28 AM
I mean this in the utmost respect to all posters -

If you are paying almost $25,000 a year in rent, why not look into buying a house? Your rent payment is through the roof - your house payment would be less!

A $200,000 mortgage for 10 years at a 6% interest (we have terrible credit and was approved for 5.4%) payment is $2220 a month. After 10 years you OWN it (that's still leaving you an extra $200 a month for taxes and maintenence).

Just a thought....

It depends on where you live..... Prior to buying my husband and I were paying $2500 a month for a 2 bed/2 bath 'condo' with a garage parking space. I'm not sure where you live, but where I live $200,000 will get you a 1-2 bedroom condo in an ‘up and coming’ area.

Irin997
05-27-2010, 12:11 PM
OP I would seriously consider moving. Check out craigslist in your area:

http://cosprings.craigslist.org

FYI I just did a quick search for "Black Forest" and there is only one listing for rentals ABOVE $2400 a month. The rest are extremely reasonable (compared to what you're paying :eek:). Majority seem to be in the $1200-$1700 range = a huge savings!

Good luck with whatever you decide!

disneyofcourse
05-29-2010, 06:07 PM
Remember they have expenses to and sometimes they have to charge more to keep up with it. Just like landscapers, dog groomers, hair stylists who raise fee's every year or two to keep up with costs.

heatherleigh
07-06-2010, 11:09 PM
Wanted to give an update with the good news. We took a chance, and looked up the owner and called them directly. I wasn't sure how we'd be received since it could be perceived as overstepping boundaries. The reason we decided to call was because the property management company wasn't giving us any answers, and they ultimately advised us to start looking for another place.

The owner said they were not looking at selling at this time because of the market. She said they're not in any trouble, and they wanted us to stay as tenants. She said she knew we took good care of it because of the photos and inspection report. She was very upset when she heard the co. told us to move on, because she and her husband want us to stay. She said she wasn't having her phone calls go through to the company and they were giving her mixed messages regarding our intentions as well.

Bottom line, we were able to re-up the lease for another year and our rent only went up $100! :banana: My husband told her we would be willing to go up another $300 (before she said anything regarding the price) so I think it worked out well.

arminnie
07-07-2010, 11:26 AM
The rent should be set by the owner, not the PM company. Have you talked to the owner? It is the owner's decision, not the PM company's decision.
Yes, it is the owner's decision - but many owners do not want any contact with the tenants.

I used a property management company in the past with some rental properties. One of the things I was paying for was NOT to have any contact with the tenants.

One time I rented out my home after a transfer, and when I moved back I stayed temporarily with my friend across the street for 2-3 months while my new home was being finished. I happily waved to my tenants every morning. They never knew I was their landlord. We had a big dispute which I would not back down on. My property manager had to handle that confrontation. That's what I was paying for.

It all depends on the market. For years I would have a small increase (maybe $25) each year, but when the market tanked I had to reduce rents by hundreds of dollars.

cats mom
07-07-2010, 11:53 AM
For all the folks saying $2,400 a month is crazy, not only do you have to put it in the context of location, but of income.

For someone bringing home $5,000 monthly, it is crazy
For someone bringing home $9,600 monthly, it's 25% of income, so very reasonable
For someone bringing home $15,000 or more monthly, it's no big deal at all


I'm gald it worked out to your satisfaction OP. Not needing to pack up and move is certainly worth something in my book. :thumbsup2

I have to ask though... in your original post you were upset about them raising your rent $50 per month, but now you're happy about a $100 per month increase? Has the rental market tightened where you are?

We pay $2400 per month, and I refuse to pay another dime.

My husband called the co. and told them that he wouldn't pay an extra dollar per month. They said they'd probably just put the rent up another $50 per month.





Bottom line, we were able to re-up the lease for another year and our rent only went up $100! :banana: My husband told her we would be willing to go up another $300 (before she said anything regarding the price) so I think it worked out well.

heatherleigh
07-07-2010, 02:41 PM
Oh gosh, I never filled you guys in on one part! I never re-read the original posts. The PM co. set our sights much higher by saying the owner's would require at least $300 more per month, IF they decided to re-lease it rather than sell. They basically used the old "takeaway close" and it worked. The PM did it unintentionally, but it's amazing how well that tactic works.

We then started looking at other rental properties in the area, and were not pleased with the homes OR prices. We didn't realize what a great deal we were getting on our house. $300 actually would have been very reasonable in comparison. The houses we looked at were not worth the money.

One house we saw had worn carpet, a broken gate in the back, and was just run-down. They wanted more than what we are currently paying. The only difference, was that the house was bigger. I do not care about size, I'm more concerned with the quality of the home.

cats mom
07-07-2010, 03:09 PM
OK, makes more sense now.

I'm glad it all worked out for you. :thumbsup2

arminnie
07-07-2010, 03:50 PM
The old school of thought was that property was always a sound investment - who could have foreseen the drastic drop in property values that are happening now.
Some advice - for every boom there is a bust. Whether it is tulip bulbs in Holland in the 1600s, the dot com market, or housing prices a few years ago - when something gets bid up artificially high there is going to be a bust.

Sure long-term things do go up in price, but that is really a long-term view - like maybe decades. If you don't have decades to recover it can be really hard.

When there is an artificial high things will almost always even out eventually. I'm not sure that some owners who are shelling out thousands of dollars a year in expenses over rent while holding onto properties that are still declining in value are making the best decision. Sometimes it's best to take a $50,000 loss now rather than having a negative cash flow of thousand and selling for a bigger loss in a couple of years.

Of course as usual in real estate it is location, location, location. Those areas that did not get bid up really high are not experiencing drastic drops in value. For other areas it may take years and years for the property values to recover.

The good news is that for every bust there is eventually another boom - but it can be a long wait.

Virgderon
07-07-2010, 04:20 PM
Op, I'm glad it worked out for you.

DH and I are in that situation with our house in MD. There will be a negative cash flow of almost $500 a month after we pay the mortgage, taxes, insurance, HOA and property management firm. We have no choice. The house wasn't selling and even if we did sell then it would have been at a huge loss (over $20k) as well. This way at least we can float the property for a few years and hope the market rebounds so that we can sell it at a wash or at minimal loss.

Same for us. We couldn't sell our house in Chicago with 3 other properties vacant on our street, one of which was nicer than ours and less money because it was a short sale.

We are only losing about $300 a month by renting it out, so I guess we shoudln't complain. I'm very skittish about buying again. I may never buy again. We can afford to, but our credit took a ding with my husband losing his job and the move halfway across the country, so we might not qualify for good interest rates. Plus I am not sure Florida has hit bottom on real estate prices yet.

jedijill
07-07-2010, 04:30 PM
Op, I'm glad it worked out for you.



Same for us. We couldn't sell our house in Chicago with 3 other properties vacant on our street, one of which was nicer than ours and less money because it was a short sale.

We are only losing about $300 a month by renting it out, so I guess we shoudln't complain. I'm very skittish about buying again. I may never buy again. We can afford to, but our credit took a ding with my husband losing his job and the move halfway across the country, so we might not qualify for good interest rates. Plus I am not sure Florida has hit bottom on real estate prices yet.

I'm right there with you. My house in KC hasn't sold and when I went back a couple of weeks ago half the street is for sale. I hired a PM company and with their fees I'm only losing $100/month. I consider myself lucky!

As for the person who said take the loss now instead of holding on....some of us can't afford to eat the loss. My savings went down to zero the year I had the house on the market. I don't have cash to take to the closing even if I could find a buyer. By renting, I continue to build equity and all my renting costs are a tax write-off. I hope the market turns around in a couple of years but renting is my only option. I too will be very hesitant to buy again any time soon.

Jill in CO

quentina
07-07-2010, 05:26 PM
Sorry, but I have to disagree. I think it would be poor business sense for them to not increase rent on an annual basis to keep up with expenses and keep the price competitive for the area. Utility costs rise, taxes rise, maintenance costs rise, staff salaries rise, pretty much all costs of ownership rise. Why shouldn't the rent rise?

I own my home and I can tell you that it costs me more to live here today than it did a year ago and it will cost me more still a year from now. I wish that weren't the case but it is.

There are laws that govern how much rent can grow per year (at least in PA). Personally, I feel 50$ is fair.