Property management company increasing rent

Discussion in 'Budget Board' started by heatherleigh, May 25, 2010.

  1. heatherleigh

    heatherleigh DIS Veteran

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    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.
     
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  3. mrsklamc

    mrsklamc <font color=blue>I apologize in advance, but what

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    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.
     
  4. disneysteve

    disneysteve You have to enjoy life, not go

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    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.
     
  5. My sister's princess

    My sister's princess <font color=green>These boards have grimmer police

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    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.
     
  6. phred52

    phred52 I love vacation!

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    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!
     
  7. momsully

    momsully <a href="http://www.wdwinfo.com/dis-sponsor/" targ

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    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.
     
  8. Cheshire Figment

    Cheshire Figment <font color=red><marquee behavior=alternate>Friend

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    I wonder about where the property management company says
    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.
     
  9. disneysteve

    disneysteve You have to enjoy life, not go

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    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.
    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.
     
  10. ClarabelleCowFan

    ClarabelleCowFan <font color=teal>Found Someone You Have<br><font c

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    ::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.
     
  11. SaraJayne

    SaraJayne <font color=red>Stop moving those smilies! <img sr

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    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. ;)
     
  12. lovetoscrap

    lovetoscrap Sees tag fairy posts that aren't there. Moderator

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    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.
     
  13. 4Seasons

    4Seasons DIS Veteran

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    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.
     
  14. Inigo

    Inigo DIS Veteran

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    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.
     
  15. JerseyGirl84

    JerseyGirl84 Mouseketeer

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    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!!
     
  16. My sister's princess

    My sister's princess <font color=green>These boards have grimmer police

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    They gave us the option to leave with no penalty.
     
  17. lovemygoofy

    lovemygoofy DIS Veteran

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    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.
     
  18. MAH4546

    MAH4546 DIS Veteran

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    If free market principals bother you, feel free to move to Cuba or Venezuela.
     
  19. disneysteve

    disneysteve You have to enjoy life, not go

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    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.
     
  20. pandora174

    pandora174 DIS Veteran

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    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:
     
  21. mrsklamc

    mrsklamc <font color=blue>I apologize in advance, but what

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    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
     

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