Property management company increasing rent

[bootc3]

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]

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]

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]

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]

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]

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]

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]

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]

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]

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]

[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]

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]

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.

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]

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]

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]

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]

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]

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

 

[cats mom]

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.

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]

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.