Author Topic: rent doubled in 12 years  (Read 1262 times)

clarkfan1979

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rent doubled in 12 years
« on: April 02, 2019, 08:59:17 AM »
I bought a 4 bed/2 bath single family home approximately 0.6 miles away from Colorado State University in Fort Collins, CO for 182k in 2007. It was a foreclosure and needed 10K worth of immediate repairs. Original rent in 2007 was $1250/month. I currently get $2325/month in rent.

I am getting ready to re-rent for August 1st, 2019 and just looked at the comps. I pulled 9 comps off of "hot pads" and the median rent is $2515/month. Rent of $2500/month is a special number for me because it's double of the original rent of $1250/month. Looks like it took 12 years for rent to double. This is approximately 6% yearly increase in rent over 12 years.

Any other experienced landlords out there have your rent double? How long did it take? What city?

cchrissyy

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Re: rent doubled in 12 years
« Reply #1 on: April 02, 2019, 10:54:45 AM »
You made me look up my college apartment from when I rented a 1br/1ba on campus.
It was $400 17 years ago and is now $1100

monarda

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Re: rent doubled in 12 years
« Reply #2 on: April 02, 2019, 11:06:05 AM »
Bought 2 family house in 2001 (~$155K), rent was $675 per unit, I think. Neighborhood became trendy over the years- it wasn't when we bought. We made lots of improvements to house here and there over the years, including dormers for additional attic space, big decks for each unit. Current value about $400K, maybe more.

Current rent $1350 for one unit (includes utils), could probably charge more, but we think we charge enough.
So ~18 years for us.  Madison, WI

And wow, I looked up the place I rented in grad school (Boulder 1980's). It was $600/month then. Now Zestimate says $2500. So that's two doublings.



sammybiker

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Re: rent doubled in 12 years
« Reply #3 on: April 02, 2019, 02:00:01 PM »
Interesting data points, thanks for posting up @clarkfan1979

Good to keep in mind the long term game plane, the big picture.

waltworks

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Re: rent doubled in 12 years
« Reply #4 on: April 03, 2019, 08:51:57 AM »
Yeah, buying at the right place/right time rules. We did that in Boulder around the same time and made a ton of money (through the same dumb luck).

If we ever get another epic housing crash like that again (IMO not likely) I'll be all over it!

-W

Enigma

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Re: rent doubled in 12 years
« Reply #5 on: April 03, 2019, 12:41:55 PM »
It is also worth noting that the min wage also increased by almost 50%.  My father pointed out that if the min wage increased to $15 overnight he would respond with raising the rent by at least doubling.  Most americans spend 30-40% of their income on houseing.

**The Fair Minimum Wage Act of 2007 is a US Act of Congress that amended the Fair Labor Standards Act of 1938 to gradually raise the federal minimum wage from $5.15 per hour to $7.25 per hour.**

Bloop Bloop

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Re: rent doubled in 12 years
« Reply #6 on: April 06, 2019, 04:58:03 AM »
Eep, spare a thought for me. Here our rental yields are very very low - an average $800,000 house gets a rental yield of about $3,000 a month. Awful, I know.

(And yes, houses are expensive in Australia)

I really don't understand why rents are so low here - I feel that many landlords are not really setting at market price at all, but rather being quite generous.

tralfamadorian

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Re: rent doubled in 12 years
« Reply #7 on: April 06, 2019, 01:54:11 PM »
...Most americans spend 30-40% of their income on houseing[sic]...

Not quite.    

Median Annual Rent as a Fraction of Median Household Income
         2017   1 Year Change   3 Year Change
US   20.13%   -0.30%           -0.76%

ender

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Re: rent doubled in 12 years
« Reply #8 on: April 06, 2019, 03:38:11 PM »
...Most americans spend 30-40% of their income on houseing[sic]...

Not quite.    

Median Annual Rent as a Fraction of Median Household Income
         2017   1 Year Change   3 Year Change
US   20.13%   -0.30%           -0.76%

Depending on whether those are before/aftertax, they could both be accurate.

JoJoP

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Re: rent doubled in 12 years
« Reply #9 on: April 06, 2019, 09:53:23 PM »
None of our rentals have doubled, but I'm very happy that even though our rents are low, they have gone up quite a bit.  Here's some of our gains, most homes purchased post-2008.

2008-2014 to 2019

$900 now $1600
$1200 now $1850
$1450 now $2100
$1450 now $1875
$1450 now $1850
$1650 now $2150

That's $3225 per month increase, or $38,700 per year

clarkfan1979

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Re: rent doubled in 12 years
« Reply #10 on: April 07, 2019, 11:20:00 AM »
You know what is also interesting, is that the purchase price pretty much exactly doubled along with the rent. The original purchase price was 182K with 10K of rehab. This spring it would sell for 385K, which is exactly double.

Rent went up 100% and purchase price went up 100% in 12 years.

I find it more interesting when I compare it to my Florida rental, which is much different.

I was under contract in Fort Myers, FL in October 2011 and closed in Jan 2012. Purchase price was 95K with 16K of rehab, so all-in at 111K. Today it would sell for 250K, which is an increase of 125%.

Market rent was around $1200/month in 2012. It's been a rental the last 4 years and it currently rents for $1850/month, which is an increase of 54%.

Purchase price went up 125%, but rent only went up 54%, over the last 7 years. However, if rent continues to increase at the current pace, rent should double in 12 years as well.