Landlords: Are You Increasing Rent?

I know there are quite a few CC posters who own rental property.

Given the pandemic and the economic impact, are you increasing rents right now when leases expire?

Part of it is curiosity and part of it is due to a friend’s landlord asking for a rent increase. I thought it was kind of “ballsy” under the circumstances and, if it had been me with the lease, I probably would have pushed back.

I am not. I am so grateful that all my tenants are PAYING, under the circumstances. And the fact is that I have NO recourse if they were not to pay, what with the eviction moratorium and the courts being closed. But all my leases automatically go to month-to-month when they’re up., and they’re all in Cminus/Dplus areas. Once the courts are open, and the eviction moratorium is over, we will revisit the issue of increases.

I should say that along with the runup in housing prices, rents are rising. I have a vacancy coming up, and I advertised it at market rate, got over 200 responses. Seems that my idea of market rate was out of date. So I think that your friend should look at how much units like hers are going for now. She might be surprised, might find out that even with the increase, she’s still paying less than market rate.

In Boston, rents are falling. I have been following them closely for the past few months and they just started to make a pretty big move. Typically in Boston you pay what is asked and the renter pays the broker fee. I am seeing landlords paying the fee, free months as incentives, and rents being negotiated below asking.

This is inside the city, which is now less desirable with everybody working from home. A huge majority of Boston leases start 9/1 (because of the number of students). I am seeing tenants already trying to break their 9/1 lease. Many of them were negotiated pre Covid (since it is usually a very competitive market and you sign up early in the year).

Yes, I definitely think one has to look at local market conditions. I do think in many areas, the residential rental market isn’t a strong as it was. One month of no rent for a landlord will cost them more than forgoing a rent increase under such conditions.

It does come down to supply and demand.

We never raise rates on existing tenants we like. However, when one set bought a home we decided to sell the rental they had been living in instead of re-renting it. Part of that is due to our life changing in the future and preferring investing elsewhere. The other part is increased house values around here - IF it stays that way now that it’s fall.

Plan B if it doesn’t sell might be to re-rent it. We’ve already had offers from as soon as folks realized the old tenants were leaving. Usually when one of our places is available a Craigslist ad stays up for a day or so before we have enough people wanting to look at it that we know at least one will be acceptable to us.

My son lives in Arlington VA, and he was expecting their rent to go up for the next year. They learned recently their rent won’t be increased if they stay where they are for another year. However, if you’re just moving into their building, rent would be cheaper than what they were offered.
They want to move, and most likely will, but they have engaged their company to see if they will lower the rent for their unit or if they sign a new lease on another unit.

That would frustrate me. It’s like the cable company’s pricing model! Screw your loyal customers. I’m sure if I was the leasing company, I’d try to get away with it, too, as we all know moving is a hassle unless you’re moving for other factors. But, it is sure to rankle current tenants.

In the case of my friend, it is a small, individually owned building with a couple units not a big apartment complex.

We haven’t. When a tenant leaves and we have a vacancy, the property manager inspects and suggests repairs (which we make). Then when he gets a new tenant, he increases the rent a bit, to get it closer to market rate (our rental rates are all below market.). One of our rentals is vacant and will have significant repairs before we have it rented again. At this point, we have no projected date when repairs will be completed on that dwelling—in the meantime, no rents at all.

Our rental properties are commercial (credit union, major brand phone store, and a national restaurant chain). Because they are commercial, I get that the typical deal is different. Our agreements are that the companies are charged a certain amount per month for a certain number of years. After that period is up, the rent goes up by a certain percentage. If they stay through that period, the rate goes up another percentage. This is all agreed upon up front. In cases where we own the land but not the building (2 out of 3), we get to take the building if they ever default.

The restaurant did not pay full rent for several months after COVID shut down our local restaurants, but as things opened up, they began to pay the full amount plus began reimbursing for rent not fully paid during that time period. We’ll see what happens as COVID continues to surge.

If we did own residential, we would not raise the rent, particularly for people who have been paying on time previously. If they couldn’t pay at all due to COVID, we’d have to think about what to do. Certainly we wouldn’t put someone out on the street, but of course landlords cannot go indefinitely without being paid. It’s a terrible time for both renters and landlords imo.