Author Topic: Rent Going Up  (Read 5288 times)

gmacmilla

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Rent Going Up
« on: April 29, 2015, 12:57:58 PM »
Hi,

My wife and I live in a single bedroom apartment in Denver (no rent control): Landlord just announced she will raise the rent on us 18.1% from 995 to 1175.

We have no kids, no car payments and very low expenses. Right now we are socking it away saving for a 20% down payment on a house and living in a nice part of town easy enough to bike or bus to work. In fact my wife's work gives a stipend of 100$ a month which she uses for a bus pass. I bike.

Rent has just gone up on us to the tune of 2000$ extra a year. Right now we are about 1-1.5 years from the amount we would like for a down payment. What should/can we do besides just dig in, accept the hit and keep saving? I have been thinking maybe we could just move to another part of town but from research it appears she has just capitalized on the market and it wouldn't be cost/time effective to re-locate. Any opinions?

Zikoris

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Re: Rent Going Up
« Reply #1 on: April 29, 2015, 01:23:58 PM »
If it were me, I would move. I'll admit that it would be motivated by spite as well as saving money. I've moved more than once after getting notices of rent increase without even looking at the rental market ahead of time, and always done fine.

Eric

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Re: Rent Going Up
« Reply #2 on: April 29, 2015, 01:24:36 PM »
It sounds like you understand your options.  Certainly scout around for cheaper places that meet your needs, but sometimes this just happens.  Do you have to sign a lease or are you on month to month?  If you're on month to month, consider looking throughout the rest of the year.  There are always below market rentals, so you just need to keep looking.  If you're on a lease, and you're less than 2 years away from buying a house, would you consider asking to sign a 2 year lease at the new price?  Maybe you could use this to make sure that your rent doesn't go up again next year.

rmendpara

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Re: Rent Going Up
« Reply #3 on: April 29, 2015, 01:32:03 PM »
Certainly scout for other locations, but factor in your net savings (cost and time off of work to move vs the extra amount spent on rent/commuting/etc in the new location).

That's the most rational way to go about it, but there's also "emotional value" to consider as well. Do you like your current location? Close to places you enjoy going that are not as close at other locations?

Personally, I'd suck it up if I knew I was leaving in 2 yrs anyway, but if there's a place across the street that's cheaper and if moving wouldn't take much time or cost much, then why not go ahead and switch it up?

From a purely financial perspective, it's very easy to calculate things. As far as personal value of other items, I'll have to leave taht for you.

Lis

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Re: Rent Going Up
« Reply #4 on: April 29, 2015, 01:33:06 PM »
You could always try haggling. I haggled down the rent on my new place by $50 (asked for $100 lower, landlord met in the middle). You could say you really like the place and would love to stay, but $1175 is out of your range. How about $1075? Additionally, what are similar rentals going for in your area? Was $995 already lower and the increase is bringing it up to range, or is it now higher than average?

Ricky

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Re: Rent Going Up
« Reply #5 on: April 29, 2015, 01:43:33 PM »
If it were me, I would move. I'll admit that it would be motivated by spite as well as saving money. I've moved more than once after getting notices of rent increase without even looking at the rental market ahead of time, and always done fine.

Spite? I'd be a little upset, but I can't imagine moving out of spite. OP recognizes landlord is raising rent to be more in line with current market conditions, can't blame them for that.

OP, if you don't think moving is going to be worth your time and cost effective, and you really like where you live, then just stay? At the least you could counter with $1,125 or so. Don't just ask for it, mention that you have been great tenants and will continue to be.

nawhite

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Re: Rent Going Up
« Reply #6 on: April 29, 2015, 01:55:04 PM »
Welcome to Denver, where everyone is moving here and no apartments were built for 5 years during the recession so demand is increasing significantly relative to supply.

Haggling is a good option but only works if you are ok with either alternative. i.e. if they say no to your request to lower the rent are you really ok with telling them you plan to leave once your lease is up? If you are, then haggle away, they would be silly not to agree.

I'd immediately start looking elsewhere. Like touring places every night after work. That will give you a very good idea how your rent compares to market rates and if moving is worthwhile.

Another Reader

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Re: Rent Going Up
« Reply #7 on: April 29, 2015, 01:57:36 PM »
As a landlord, I think your landlord is an idiot.  You have to balance the market against the ability of folks to pay these kind of increases and the high probability you will end up with a vacant unit that you have to spend money to re-rent.  In your shoes, I would call the landlord and explain that while you understand that market rents have increased, an 18 percent increase is not in your budget.  You have been an excellent tenant, paying your rent on time, maintaining the property, and causing no problems.  You would like to stay, so perhaps a compromise that would allow her to bring the rent to market over two years would be acceptable.  Maybe she could accept $1,075 for the coming year and then consider an additional increase at the end of that time.  If she says no, start looking.  If you can find a better deal, try to negotiate a two year lease with a minimal bump at the end of the first year.

Zikoris

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Re: Rent Going Up
« Reply #8 on: April 29, 2015, 04:06:23 PM »
If it were me, I would move. I'll admit that it would be motivated by spite as well as saving money. I've moved more than once after getting notices of rent increase without even looking at the rental market ahead of time, and always done fine.

Spite? I'd be a little upset, but I can't imagine moving out of spite. OP recognizes landlord is raising rent to be more in line with current market conditions, can't blame them for that.

OP, if you don't think moving is going to be worth your time and cost effective, and you really like where you live, then just stay? At the least you could counter with $1,125 or so. Don't just ask for it, mention that you have been great tenants and will continue to be.

An 18% rent increase is insane. In addition to moving, I'd quite likely use one of those services that anonymously couriers a box of shit to the landlord.

Disclaimer: I'm immature and a bit of a hothead.

curler

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Re: Rent Going Up
« Reply #9 on: April 29, 2015, 04:17:44 PM »

An 18% rent increase is insane.

Are it just means they were paying 18% less than market rate the past few years.

Zikoris

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Re: Rent Going Up
« Reply #10 on: April 29, 2015, 05:16:38 PM »

An 18% rent increase is insane.

Are it just means they were paying 18% less than market rate the past few years.

I don't believe in paying market rate for ANYTHING, especially not rent, and would be pissed off at any landlord who tried to make me. But at the same time, I've never been particularly attached to any apartments, so I'm more than happy to move if the landlord pisses me off and let some willing-market-player take the place instead.

Ricky

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Re: Rent Going Up
« Reply #11 on: April 29, 2015, 09:18:36 PM »

An 18% rent increase is insane.

Are it just means they were paying 18% less than market rate the past few years.

I don't believe in paying market rate for ANYTHING, especially not rent, and would be pissed off at any landlord who tried to make me. But at the same time, I've never been particularly attached to any apartments, so I'm more than happy to move if the landlord pisses me off and let some willing-market-player take the place instead.

I'm picturing you throwing a temper tantrum in the supermarket when you walk out the door paying market price for everything.

Zikoris

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Re: Rent Going Up
« Reply #12 on: April 29, 2015, 11:04:55 PM »

An 18% rent increase is insane.

Are it just means they were paying 18% less than market rate the past few years.

I don't believe in paying market rate for ANYTHING, especially not rent, and would be pissed off at any landlord who tried to make me. But at the same time, I've never been particularly attached to any apartments, so I'm more than happy to move if the landlord pisses me off and let some willing-market-player take the place instead.

I'm picturing you throwing a temper tantrum in the supermarket when you walk out the door paying market price for everything.

They would be hilarious! I don't pay market rates for groceries either, thank god - I seem to be at about 50% market rate for food and 75% for rent in my area, which I'm fine with.

maco

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Re: Rent Going Up
« Reply #13 on: April 30, 2015, 11:44:46 AM »
Maybe run some math...

Last time my rent went up, I found that even though I didn't yet have a 20% down payment, I'd be paying $400 less per month (even though I'd be paying PMI) to make the smaller down payment and move to a house. So if you're at 10 or 15% right now, and you can get a mortgage with a lower payment than your rent increase (or hey, lower than your current rent!), it might make sense to just go for it. It's possible the numbers will come out that you lose less on PMI than you lose on the rent increase, like it did for me.