patrick.net

good idea making them feel like they're getting something in return.

But I'm tempted to just raise it. If they move out I can easily replace with someone new who feels like they're getting a good deal.

In the end it is your property. If you are willing to risk losing known good tenants for some that might not be as good, then you can go for it. It would be nice to give them plenty of notice so they can find somewhere else if they don't like it...don't be a dick and give the minimum notice about the increase in hopes of keeping them trapped.

This is why inverters should not be allowed to by homes. They will take, take, take, away money from families with children and grow fat and rich. Now the family has to pick up and find another home in the same school district or take three hundred dollars from their budget. This is a perfect example of wealth redistribution.

and what about the $300 being taken from my budget each month?

like I said I'm not trying be greedy. It's just business.
at some point subsidizing someone else's lifestyle at your own expense goes beyond nice. It's just foolish.

If investors where not allowed to purchase homes for profit, the price of single family homes would not be the height they are today. More people would be able to afford a home of their own. One of the first questions on a psychological evaluation is, ( have you moved in the last year?). The reason they ask this question is because moving is traumatic and an extremely stressful event. This type of stress is constantly imposed on the American people and their children. It also destabilizes our communities by not allowing time for children to develop attachments to others or feel a sense of security knowing at any moment their life can and will change. It's no wonder so many adults have grown disconnected from their environment and the people around.

Toothfairy, you are not subsidizing your tenants lifestyle, your tenants are subsidizing your life style.

toothfairy says

and what about the $300 being taken from my budget each month?

like I said I'm not trying be greedy. It's just business.
at some point subsidizing someone else's lifestyle at your own expense goes beyond nice. It's just foolish.

Indeed, it IS a business. There's no arguing against that. While it is frustrating when a landlord raises the rent, "because the market is going up," and you know full well that the lower rent was still providing them profit, it is the way it is. GREED. Sadly, it is sort of the thing driving our entire economy. If the market will bear it, then you CAN crank the rents up. Since it is business, I guess that there is no real "right or wrong" to it. Anyone that rents and thinks that the landlord is supposed to be their friend is delusional.

Now, personally...
If $3k/month covers all expenses and you are still turning a profit, but you up the rent $300 because you can, you are a dick. Greed may grease the wheels of the economy, but it is still a wretched human trait.

Raise it 20%! Don't do any improvements, they shouldn't be renting anyway. If you got a look at their savings you'd be kicking yourself in the ass. They are living off of your equity and it needs to stop. Also, the higher rent will mean you get a better tenant than before. Studies have shown a high correlation between net worth and moral character.

Lastly, make sure you screw them on the deposit. They have socked away 10's of thousands living off your house, it only makes sense you get some of that back. Bastards. I wouldn't even tell them to leave. Just put down a "For Rent" sign in the front yard and let them figure it out. Be the landlord you know you can be.

By all means raise the rent. I suppose the worst that will happen is that your current tennants will find another place.

Its very simple, if they feel you are charging to much, they will up and leave...for sure.

Then you have to go through the process of advertising it again, taking time off work to show people, and for what, and extra $3600 a year, which if you miss one months rent, you are already down for the year all for nothing.

If it was me, and as you say they are good tennants, i would leave well alone, and continue at the present rate.

But hey, as you say "Its just a business" which is what your tennants may say as they close the door on the way out.

bmwman91 says

If $3k/month covers all expenses and you are still turning a profit, but you up the rent $300 because you can, you are a dick. Greed may grease the wheels of the economy, but it is still a wretched human trait.

What about when rents go down, but your monthly nut is still $3k. Should the tenant still pay you the 3k for the same reason? What about when you lose a tenant and then can't rent the place for 3 months, who pays for the monthly expense during that period? What's in it for them?

Andy S says

By all means raise the rent. I suppose the worst that will happen is that your current tennants will find another place.

Its very simple, if they feel you are charging to much, they will up and leave...for sure.

Then you have to go through the process of advertising it again, taking time off work to show people, and for what, and extra $3600 a year, which if you miss one months rent, you are already down for the year all for nothing.

If it was me, and as you say they are good tennants, i would leave well alone, and continue at the present rate.

But hey, as you say "Its just a business" which is what your tennants may say as they close the door on the way out.

As a business you have to think long term. Yes my 1 year profit could be wiped out by the turnover but the higher rent over the next 5 years will more than make up for it.

swebb says

What about when rents go down, but your monthly nut is still $3k. Should the tenant still pay you the 3k for the same reason? What about when you lose a tenant and then can't rent the place for 3 months, who pays for the monthly expense during that period? What's in it for them?

If rents in the are going down...you also don't necessarily have to do anything, unless the tenants start bugging you. I never once got my rent reduced because the landlord offered. I had to ask & negotiate. Obviously, renting involves 2 parties with opposing incentives for action. You can let the rent "float" and risk tenant turnover, or you can keep it constant and that can buy you, the landlord, a bargaining chip. "So you want lower rent because the local market is a little lower now? Well, keep in mind that I didn't raise it when the market was more expensive."

Anyway, once you are covering all costs and pulling 5%+ profit on top of that, it seems sleazy to crank the rent up more. But, as stated before, it IS just business, and most business is sleazy & not very nice. It's just how it is, regardless of whether or not someone is a dick for participating.

bmwman91 says

If rents in the are going down...you also don't necessarily have to do anything, unless the tenants start bugging you.

Imagine the tenant moves out. Now you have to put your $3k/month (costs to you) place on the market, but the market has dropped to $2,500 / month. Do you list it at $3k / month and hope the tenant will pay the above market rate because that's what it costs you? Or do you expect to be able to get market rate, even though it means you are losing money every month?

Another way to look at it is that the "how much it costs to maintain" line in the sand is arbitrary. I was renting a place that cost the landlord $1,000 more per month in PITI than I was paying rent (due to bad decisions on his part). Increasing the rent to that level would have sent me packing. But if the place was paid off, and his costs were only a few hundred per month in taxes...should he rent it to me for that?

Carolyn, what's an "inverter"?

swebb says

Imagine the tenant moves out. Now you have to put your $3k/month (costs to you) place on the market, but the market has dropped to $2,500 / month. Do you list it at $3k / month and hope the tenant will pay the above market rate because that's what it costs you? Or do you expect to be able to get market rate, even though it means you are losing money every month?

It ultimately depends on whether or not you want the tenant moving out. If you are signing a new lease with a new tenant, anything goes as far as I am concerned. I was focused on the "keeping the current tenant" side of the discussion. And, as long as toothfairy gives the current tenants ample notice of a rent increase so that they can decide what to do & find other accommodations, it's not a huge deal. If rents have gone up & the market is as hot as he is saying, he will have no issues finding someone else to pay a higher rent.

I see no issue with signing new tenants at the going market rate. Once a tenant is in, it is up to the landlord to determine whether to change the rent on them when the lease is renewed. If the landlord is going to raise the rent, then he owes it to the tenants to inform them in advance...lest he be branded a dick. I am sure that there is some minimum amount of time prescribed by law. Personally, anything less than 30 days is a dick-move.

Anyway, there's no point in arguing about whether or not I think that a landlord is a dick. Whether or not I think highly of them is largely immaterial in most cases. If it is just business, then how I feel about them as people shouldn't matter. In my experience, many of them are dicks, period. Despite that, it is still a better value than buying in the part of the BA that I am in, so I deal with it.

What is a good tenant that pays their rent on time every month, is in a stable financial position and take care of your place worth?

Get a bad tenant in there, that can't pay their rent or just chooses not to and stays in the house for half a year for free, completely screwing you.

But that's just me. A good, longterm tenant has a $$ value from turnover and risk. Determine what that value is.

You should charge whatever rent amount will make you the most, balancing the amount of effort you will expend and also balancing how long you will own the property.

The anti landlord posts are ridiculous. But I'd guess that's what realtor/troll OP was angling for.

dodgerfanjohn says

But I'd guess that's what realtor/troll OP was angling for.

lol

Is toothfairy a known / admitted realtor?

Maybe raise the rent 5% if you want to keep them but keep up with market rates.

Thats true not sure why the post says Oakland but this rental is not in Oakland its in the heart of silicon valley and I havent had a problem finding good tenants.

toothfairy says

Thats true not sure why the post says Oakland but this rental is not in Oakland its in the heart of silicon valley and I havent had a problem finding good tenants.

That is the location indicated by the zip code in your profile.

ah I see. and for the record I'm not a realtor. If it were up to meeven more people would be renting so I guess you could say I'm the anti-realtor :)

Why dont you post the general location of said property, we can all then comment of what we think you can expect to rent it for. Just give a brief description of property i.e 3 bedrooms, lot size, sq footage of residence etc, and the location. And I can promise you that within a week we could all find similar properties that rent for the same price or less.

Ok 3br 1ba house within 2 blocks of downtown mnt. View. For $3000 or less.

Folks -- if this thread isn't the most compelling argument against the better-off-renting mindset, then truly nothing is.

Personally, I'm nearing the point I would rather reach up my asshole and pay for a place with part of my spleen than enrich my miserably cheap, soul-starved, balding, flab-gutted, penny-loafer-wearing, khaki short-sporting, bottom shelf cereal-eating, LIVE STRONG bracelet-wearing, Zig Ziglar/Warren Buffet-worshipping, penny chiseller of a landlord with any more of my precious lucre.

That, and engaging with any human being so stinking drunk with the fear of poverty every month is just...depressing.

I also think 10% all at once might be too much. Try something lower, like 5%, then reevaluate again next year.

Austinhousingbubble says

Folks -- if this thread isn't the most compelling argument against the better-off-renting mindset, then truly nothing is.

I moved to Denver 2.5 years ago and rented a SFH for $1500/month -- we figured it was $200-$300 under market when we rented. We got a year lease and once that expired the landlord only wanted to do month to month, so we knew the situation was tenuous (we also knew that the neighbor with the same landlord had been month to month for 10 years)

A few months back he emailed us to let us know that the rent was going to increase from 1500 to 1750, then to 2000, and then to 2250....all with improvements, and all within a 9 month time window.

In the end he gave us notice that he needed the place for himself, so we had to move. We had a few months, but given the rental market in the area, we jumped on the first thing we found (4 days later). The move totally sucked.

Was it stressful? Yes! The uncertainty, the move, the suddenness of it all...all stressors. Would I do it differently? Probably not. In the 30 months we lived there we probably saved on the order of $7500 in rent, which is about 1/2 year of 401K savings. Our savings over buying a comparable house is harder to estimate (and we wouldn't buy a comparable house anyway), but we came out way ahead financially. At the end of the day I feel like we did the right thing given our situation. We can't afford a house in this school district, my employment situation is tenuous (so buying a house didn't make sense), and pre-emptively moving to a more expensive place just to avoid some uncertainty didn't make sense to us.

So, no, this is not a convincing argument against renting for my situation and tolerance for uncertainty, etc. A convincing argument would be if rents went up, or if prices went down, making it a clear financial benefit to own.

Austinhousingbubble says

Personally, I'm nearing the point I would rather reach up my asshole and pay for a place with part of my spleen than enrich my miserably cheap, soul-starved, balding, flab-gutted, penny-loafer-wearing, khaki short-sporting, bottom shelf cereal-eating, LIVE STRONG bracelet-wearing, Zig Ziglar/Warren Buffet-worshipping, penny chiseller of a landlord with any more of my precious lucre.

Wow. Deep breath.

Does not seem to be a shortage of homes for rent in that area. There is a whole list of different properties for rent that were listed today.

http://sfbay.craigslist.org/pen/apa/3015976089.html

http://sfbay.craigslist.org/pen/apa/2991660230.html

http://sfbay.craigslist.org/pen/apa/3016039504.html

http://sfbay.craigslist.org/pen/apa/3015268102.html

http://sfbay.craigslist.org/pen/apa/3004160812.html

Andy S says

Does not seem to be a shortage of homes for rent in that area. There is a whole list of different properties for rent that were listed today.

http://sfbay.craigslist.org/pen/apa/3015976089.html

http://sfbay.craigslist.org/pen/apa/2991660230.html

http://sfbay.craigslist.org/pen/apa/3016039504.html

http://sfbay.craigslist.org/pen/apa/3015268102.html

http://sfbay.craigslist.org/pen/apa/3004160812.html

Those aren't even in Mnt. View. East Palo Alto is low income + high crime...the other listings here are 2br condos?

If you do the search for 3br in Mnt. View there are 15 total for rent and Most are apartments.
http://sfbay.craigslist.org/search/apa/pen?query=&srchType=A&minAsk=&maxAsk=&bedrooms=3&nh=81

E-man says

Toothfairy,

Losing a good tenant over a couple hundred bucks is not worth it in my book. Instead of raising the rent $300, why don't you raise it $100 and call it a day?

Learn from your victory. Prosper from your failure.

actually they're not perfect tenants. If I only raise the rent $100 these are the type of people who would just find $100 more dollars worth of things to fix each month.

Raising someone's rent from $3,000 to $3,300 is not something to be taken lightly. Personally, I always felt that paying over $1,600 a month in rent is ridiculous regardless of how it compares to if one "owned" the same dwelling. Obviously, many people do not share the same point of view. I know someone who paid close to $4,500 a month to live in mission san jose district in fremont. I believe at the time the market value of the place was $1.2 million. So yeah, while it may have been better to rent than own same pad, I still would never pay that much in rent. I guess you need to find out if you are likely to replace the renters within 30 days. If so, you will come out ahead.

toothfairy says

actually they're not perfect tenants. If I only raise the rent $100 these are the type of people who would just find $100 more dollars worth of things to fix each month.

"the type of people" that would demand premium service for premium rates. Danm them!

dublin hillz says

Personally, I always felt that paying over $1,600 a month in rent is ridiculous regardless of how it compares to if one "owned" the same dwelling

Except since I don't live in CA my acceptable rent number would be much lower then 1600/month

swebb says

So, no, this is not a convincing argument against renting for my situation and tolerance for uncertainty, etc. A convincing argument would be if rents went up, or if prices went down, making it a clear financial benefit to own.

I both understand and sympathise, Swebb. In fact, I would add that I think rents are presently enjoying an anomalous and ultimately temporary boost from a confluence of unique factors in the marketplace. My point was, the overall tenor of this thread and others like it has induced some serious misgivings (gag reflex) in me as a renter/host. I am convinced there are at least as many vested interests lobbying for the rent-vs-own argument as there are behind the buy-now/be-priced-out-forever crowd. Increasingly, it seems like little more than a choice between two different taxonomies of parasite.

Yes, I have saved a prodigious amount of money renting my little granny shack, and in a way, I feel I've become addicted to watching my decimal stuff grow. However, as you well know, renting does suck, and moving really sucks. I guess as prices slowly drift downward and my savings/compensation gradually increases, the greedy machinations of all these genius infesters have left me feeling at least a little more philosophical about the premiums of buying.

BTW - Denver's corrected quite a bit since you moved there, no? Prices do seem to be going down, and rents do seem to be going up there. Nice part of the country -- congratulations.

Austinhousingbubble says

, renting does suck, and moving really sucks.

Where does this notion come from that renters are constantly moving?

Growing up, I had two friends whose parents rented. One lived in the same apartment for 10 years. The others lived in a SFR in Monterey Park that they rented for over 20 year.

Everyone making an argument against renting keeps citing the "fact" that renters have to move all the time. Do renters really move more often than home debtors(who move every 7 years, yes yes?)

dodgerfanjohn says

Where does this notion come from that renters are constantly moving?

In my instance, it's an empirical observation.

dodgerfanjohn says

o renters really move more often than home debtors(

They do if they want to enjoy the leverage that renting allows vs owning where housing costs are concerned. When rent rises, most probably pay it to avoid the stress of moving -- even despite the likelihood that a comparable rental for less is available nearby.

dublin hillz says

So yeah, while it may have been better to rent than own same pad, I still would never pay that much in rent

You are paying that much and more to rent money. Either from yourself if you paid all cash or from the bank if you didn't. I don't see any difference except renting for 4500/mth saves you more money. Now, if you are gambling on the house appreciating then all bets are off. Be honest.

ok rents are just going batshit insane now. Look at this!

it seems that landlords are just setting the price ridiculously high and seeing if anyone bites.
http://sfbay.craigslist.org/pen/apa/3017822124.html

or you can rent this townhouse for $5300 per month

http://sfbay.craigslist.org/pen/apa/3017734266.html

toothfairy says

ok rents are just going batshit insane now. Look at this!

it seems that landlords are just setting the price ridiculously high and seeing if anyone bites.

http://sfbay.craigslist.org/pen/apa/3017822124.html

They can do what they want. It has no effect on my rent. None. Wishful thinking in a down market. These people are probably so far underwater and they are going to lose the house unless they get this rent. $6k/mth sounds like about the cost of ownership, so they are trying to break even. Good luck with that.