Author Topic: How much does rent rise historically?  (Read 1521 times)

heybro

  • Stubble
  • **
  • Posts: 198
How much does rent rise historically?
« on: October 24, 2016, 10:45:47 AM »
Regarding the age old 'to buy or rent,' does anyone know, historically, what percent rents have increased?

I have read that house prices just barely keep up with inflation.
Does rent pretty much stick with inflation as well?

In my situation, renting is the same as owning (I currently own) and I want to rent but I am just scared that rent could explode in price (whereas owning it seems your costs are a little more predictable (for the most part)).


MNrealtyguy

  • 5 O'Clock Shadow
  • *
  • Posts: 6
  • Location: Minneapolis
Re: How much does rent rise historically?
« Reply #1 on: October 24, 2016, 11:56:22 AM »
Real estate is a very localized business, but generally speaking, both rents and housing prices will increase close to the inflation rate. I view renting to be a great short-term solution. But, if you want to be in the same spot for awhile, you'll be better off owning a home. Long-term you'll have the benefits of equity paydown and potential appreciation that will crush renting.

Telecaster

  • Handlebar Stache
  • *****
  • Posts: 1960
  • Location: Seattle, WA
Re: How much does rent rise historically?
« Reply #2 on: October 24, 2016, 12:03:04 PM »
Arebelspy made an interesting observation the other day that rents rise with income.   I hadn't heard that before but it makes perfect sense.

The good news is that wage inflation is faster than regular inflation, but I'm sure it is dependent on the location.   

Bicycle_B

  • Handlebar Stache
  • *****
  • Posts: 1821
  • Mustachian-ish in Live Music Capital of the World
Re: How much does rent rise historically?
« Reply #3 on: October 24, 2016, 12:35:20 PM »
Real estate prices (both rents and purchase price) will vary in the direction of OTHER people's income.  If your individual retirement income is fixed relative to inflation, and the rest of the area's income rises after inflation, prices will go up - giving you an advantage if you own, a disadvantage if you rent.

That long term analysis is subject to big variations, though.  Some cities get real estate bubbles while others collapse (Seattle vs Detroit).  And eras vary, not every year fits the pattern. 

I think I remember reading in Thoreau or something (1830s) that the average man spent a third of his income on housing.  Seems pretty similar to now except that incomes are higher and property ownership not limited to men...
« Last Edit: October 24, 2016, 12:38:34 PM by Bicycle_B »

DeanW5

  • 5 O'Clock Shadow
  • *
  • Posts: 26
Re: How much does rent rise historically?
« Reply #4 on: October 31, 2016, 08:29:39 AM »
Real estate is a very localized business, but generally speaking, both rents and housing prices will increase close to the inflation rate.
I definitely agree. I know in LA rent increases set to double inflation for the last year. However, the highest rent increases for the past ten years were in San Jose,  Washington, D.C, Seattle and SF.
The smallest raise was in Sacramento and Orlando.
« Last Edit: October 31, 2016, 08:34:15 AM by DeanW5 »