this post was submitted on 09 Jul 2024
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I was a landlord for a while, only one rental property, but I refused to raise the rent along with market increases because the existing rent was sufficient to cover my property expenses. There was no financial need to raise the rent, except for personal gain, so instead I choose to show gratitude for what I already had and passed on the benefits to the tenant.
I think that's how it should be and probably used to be. A lot of landlords with very few rentals.
Nowadays, we have literal company optimizing everything to get the most out of their investment. If they can increase, they will.
A landlord that does this as a side business won't necessarily increase the rent because he will prefer to have a good relationship because he does not want to spend all his time searching for new tenants.
I feel like even a big company should want to have a good relationship with its tenants. If you lose just one month's rent, you're out over 8% of your annual revenue and you're lucky if that's even your profit margin in the first place.
That's why they're so quick to evict. If they keep everyone squeezed for housing, then resistive tennants can be replaced quickly, and prices can inch up even more.
In a working market, there would be a lower cost alternative, but if all options are high-cost then the only real alternative left is homelessness, which is already illegal and being persecuted more and more.
I bought a house last year that I'm going to live in eventually after my elderly parents (who I live with) pass or move into a nursing home. In the meantime I'm renting it out below market to a coworker who needs an affordable place so she can keep her daughter in our school district. I get enough to cover my insurance and property taxes and some additional renovations to the house. I consulted with a property lawyer before buying it and he gave me a copy of his standard lease which he recommends to clients; it included an automatic annual 5% increase in rent. I've rented most of my life and I've never seen anything that rapacious.
In fact the 5% increase will roughly keep you even especially if you are charging under market rent. That's not keeping up with rental market increases, just inflation + the consequences of market increases even if you aren't tracking with rental rates yourself.
If you charge $1000 this year that's around $950-$970 next year. Or to flip it around, say you have $1k in expenses for repairs etc that's around $1030-1050 next year. And that's with average-ish inflation (it was 7% in 2021!). The 5% covers that plus increases in property taxes (jeebus fuck) and insurance costs (holy shit).
You are very commendable for this. However, this is also the reason why we clearly can't rely on people's good will over their greed, because you're clearly exceptional haha