"Shouldn't Landlords Feel Guilty about raising rent?"
Tyler RowlandBusiness Member
Lender · Cedar City, UT · Member since 2017 · 88 posts · 64 votes
Tyler Rowland with Intercap Lending 554 Reviews
"Shouldn't Landlords Feel Guilty about raising rent?"
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Severna Park, MD · Member since 2013 · 7k+ posts · 7k+ votes
6yJust ask , " Does the government feel guilty when they raise taxes?"
105 Replies
- 6yCorby GoadeBusiness MemberInvestor · Boise, ID · Member since 2014 · 3k+ posts · 3k+ votes
This is an easy one for me- many lifelong renters feel victimized by their landlords- helpless that they are living at the whim of the rent increases and invconveninces that renting comes with. There are two simple responses:
1. What is stopping any tenant from either buying their own home or becoming a landlord themselves? Absolutely nothing- that is true for every person in the US. If they have no money, poor credit, etc, they can start working to fix that and take control of their destiny, just like every person on this forum is trying to do. The victim mentality destroys lives, we all have control of our destiny, it's a matter of whether we harness that or let things "happen to us."
2. In general, especially the last five years, it's difficult to keep up with annual property tax increases, let alone create better cash flow on a rental. I've found renters tend to vote for and support tax increases on landlords, levies for public improvements (that come from property taxes) etc, because they think they don't have to pay for them since they don't own property. OF COURSE they have to pay for them- through rent increases because they voted for property taxes to go us. It's silly to think that a property owner will just eat those increases indefinitely- voting to increase taxes is the same thing as voting for your own rent increase.
- Flipper/Rehabber · Albuquerque, NM · Member since 2019 · 61 posts · 64 votes6y
@Tyler Rowland
For a young family of 3, I was just notified my health insurance will be going up another 30% beginning January 1. Fortunately, we have never used our insurance other than our annual flu shots and having our son 7 years ago.
Life does not balance out like a simple accounting equation and most expenses will always be growing more expensive than the rate of inflation. Rent however is not one of those astronomical, out of this world growing expenses compared to the rest of our society.
I suggest the next time you have the same type of conversation you simply smile and move on. Many people are naive and have no idea what lengths many owners go to for the benefit of their tenants.
Create the best product you can for your investment and don’t sweat the small stuff.
Best of luck!
- Investor · Hampton Roads, VA · Member since 2014 · 1k+ posts · 418 votes6y
I’ll go against the grain on this one....
I like to move people in with low credit scores but they have 3X income. I rarely raise their rents. Do I “maximize my profits” by not raising rents? Maybe. But they stay for years and I rarely have turnover. There is potential cost savings there.
More importantly... my time is not consumed by managing the number of units I have and is spent fishing, analyzing other investment opportunities or doing whatever else I want to do.
- Rental Property Investor · Doylestown, PA · Member since 2008 · 1k+ posts · 1k+ votes6y
@Tyler Rowland - as a landlord you are not a monopoly so if your rents are too high they are free to choose a place where rents are lower. It’s just inflation. Cost of living goes up over time. Housing prices and rents are costs of living.
- Investor · Cincinnati, OH · Member since 2015 · 242 posts · 182 votes6y
@Tyler Rowland. If I allow a tenant to rent at $100 below market rent I’m essentially giving away $100 from my family, from my household, to a stranger. Nothing wrong with that if you consciously decide to provide charity, just putting it in perspective. Perhaps the person who asked you the question would be willing to give the $100 instead, after all it’s really not much different. Would that person feel guilty if they didn’t give the tenant $100/month to effectively reduce their rent? In fact perhaps you could offer this person a proposition, you will refrain from the $100 rent increase if this person will subsidize a tenant by $100/month. Wouldn’t it be wonderful if this person, by calling out perceived injustice, can benefit not one renter but two?
Oh but of course we know the likely answer. For the lowly landlord is to be looked down upon and reviled for daring to derive income in exchange for providing safe shelter. After all, is shelter that important? It ranks behind food and clothing, it’s merely number 3.
And what of the doctor, he or she of the large home and expensive car? Does not the landlord provide a service similar in importance? And how often do we hear the doctor spoken about with terms of contempt and judgement? Or is that treatment reserved solely for the greedy, heartless landlord?
Friends, do not allow such foolishness to go unchallenged. Stand up and defend our profession!
- Naperville, IL · Member since 2018 · 330 posts · 357 votes6y
I think Russell nailed it---so many people don't even understand that landlords have mortgages, property taxes, insurance, HOA fees, repairs.....that said, the world IS harder for people in lower incomes than ever before. We DO choose to rent below market, we consider it a bit of our mission to the world. Plus lower turnover. I hate finding new tenants. My one complaint would be with Section 8 tenants (and we sometimes have them) asking me to take yet another $100-$300 off so their voucher can cover a newly renovated place. Because they "want" or "deserve" a new everything in their home. I politely explain that they are literally asking US to subsidize the newness, on top of taxpayers subsidizing their rent in the first place. Of the six times I've had this conversation, three said "oh, I never thought of it like that, thanks for explaining", one said "you should do it anyway it would make my kid's lives so much better", and two said "**** off". Oh, well, 50% getting it isn't bad!
- Investor · Chicago, IL · Member since 2009 · 1k+ posts · 1k+ votes6y
Here is an example where I keep the rent a bit below market: Elderly tenant on a fixed income, few complaints, will not move for a long time. This type of tenant almost creates passive income for me.
- Rental Property Investor · Ankeny, IA · Member since 2017 · 2k+ posts · 3k+ votes6y
I am heading out the door to go replace a tenants microwave. On a Sunday morning. Maybe I’ll ask them if they feel guilty about me spending money and working on a Sunday. If they do not, I reckon I’ll raise their rent for the rate of inflation/market rate come lease renewal time.
- Rental Property Investor · Corvallis, OR · Member since 2018 · 840 posts · 1k+ votes6y
@Tyler Rowland we have to ask ourselves why we wanted to invest in RE in the first place? Herein answers all the questions. I am fair and honest but need to make a return.
- Rental Property Investor · Portland OR · Member since 2018 · 2k+ posts · 3k+ votes6y
Originally posted by @Sam B.:
@Tyler Rowland
. The tenant always hates the landlord, that’s just the way it is and will always be.. it doesn’t matter what you do.
This is NOT always true. Tenants respect LLs who are fair, provide a good product and who respond when there are issues.
For example, my tenants consistantly want to know where they can leave 5 star reviews for me. And my rents are right at the top of the market.
Treat people fairly and in general, they will respect you.
- Investor · Phoenix, AZ · Member since 2014 · 230 posts · 122 votes6y
We're not greedy about it, and there are some times we've not raised the rent or given a minimal raise depending upon our tenant's circumstances. At the end of the day, it may be less expensive to give a minimal increase or no increase at all than to potentially lose a tenant and then have to pay for painting, screening, and other costs associated with getting a property ready for a new one.
- Member since 2018 · 61 posts · 22 votes6y
Don't get me wrong, I'm a left-wing liberal hippie douchbag, but economics are economics. Our costs increase, their costs increase. My properties tend to be nicer units, and my tenants appreciate that, and are willing to pay a premium. Most people understand that they get what they pay for, in my experience.
- La Vergne, TN · Member since 2016 · 93 posts · 28 votes6y
@Tyler Rowland
If it's fair market value, no I won't feel bad
- Los Angeles · Member since 2018 · 466 posts · 471 votes6y
Originally posted by @Mary M.:
Ummmmmm.... ok. Isnt your Governor the one that is working to bring something like 200,000 new units online before 2025? This is a HUGE amount of money (billions)
The governor of California is an empty suit. He's damned good looking, but seriously, there is nothing of substance there. He's the kind of guy who will let homeless people sleep on the sidewalk, then ban plastic straws based on some viral YouTube video. And guess where the billion$ is coming from? The California Taxpayer. And that's even assuming they ever actually build any units. 2025 is a long way away, with plenty of opportunity to divert the funds elsewhere. We already have more than a billion set aside from a voter-approved sales tax hike that's just been sitting in a bank account somewhere.
The problem with restricted housing supply in California have been going on for decades. If they ease the restrictions and fees and regulations, the builders will come in and solve the problem for us, on their own dime.
- Los Angeles · Member since 2018 · 466 posts · 471 votes6y
Just to put an opposite spin on the overall trend here, since the Rams are moving to the Los Angeles area and building this grand, new, beautiful stadium over in Inglewood, rents hereabouts have been going CRAZY.
I hear anecdotal stories about rents doubling and tripling, all at once. I know of at least two businesses that were forced to relocate because they couldn't afford the increased leasing rate. And one of those failed to survive at their new location.
And after all is said and done -- the place is still a dump. I can say that, I live here. So it's a dump, but you still have the privilege of paying "market rent".
I hear a lot of people here saying, "You get what you pay for" or words to that effect, and that is true, I'm 100% on board with that. But the Rams has taken that concept and unintentionally threw it on its head. OK, living near the Rams is worth twice, three times the rent? So the rent can go up and place can still be a dump? I don't get it.
- Los Angeles · Member since 2018 · 466 posts · 471 votes6y
Originally posted by @Corby Goade:
This is an easy one for me- many lifelong renters feel victimized by their landlords- helpless that they are living at the whim of the rent increases and invconveninces that renting comes with. There are two simple responses
There is a third simple response.
3. What's stopping you from trying to haggle for a better rent? Nothing.
Just say, "Look, I've been here for a year, I don't bother the neighbors, I pay on time, but I recognize that costs go up. How's about it only goes up N percent instead of M percent?"
I had an experience as a renter where the landlord raised my rent 13%. I said, "13%? OMG! How about 7%?" He said, "OK". And that was it.
That was IT? It was too easy! I should've asked for 3%! Maybe after a little back-and-forth, I'd have ended up at 5%.
There is no reason to feel "victimized" by landlords and there no reason to believe the rent is carved in stone. Everything is negotiable.
- Rental Property Investor · Los Angeles, CA · Member since 2017 · 2k+ posts · 5k+ votes6y
Originally posted by @Alvin Sylvain:
Just to put an opposite spin on the overall trend here, since the Rams are moving to the Los Angeles area and building this grand, new, beautiful stadium over in Inglewood, rents hereabouts have been going CRAZY.
I hear anecdotal stories about rents doubling and tripling, all at once. I know of at least two businesses that were forced to relocate because they couldn't afford the increased leasing rate. And one of those failed to survive at their new location.
And after all is said and done -- the place is still a dump. I can say that, I live here. So it's a dump, but you still have the privilege of paying "market rent".
I hear a lot of people here saying, "You get what you pay for" or words to that effect, and that is true, I'm 100% on board with that. But the Rams has taken that concept and unintentionally threw it on its head. OK, living near the Rams is worth twice, three times the rent? So the rent can go up and place can still be a dump? I don't get it.
The Inglewood situation is a little more unique than other places. Lots of changes going on.
The area where Inglewood lies is a nice place. It is well located around other areas, close to major transportation / LAX, close to the coast, nice weather, etc. It's basically the last nicer land area that hadn't seen a dramatic run up in prices up until a few years ago. It's history likely kept people away. It was rightfully known as a crime infested ghetto run by inept politicians that are desperately trying to cling to power with a changing demographic base.
The changes there were happening before the Rams stadium was being built. Prices started to rise earlier this decade. The demographics changed from being a "black area" to a "Hispanic area". More whites are also moving in. Average home prices have doubled over the past 7 years there. The elected officials are telling horror stories trying to rally support as their core base of voters shrinks.
The Rams injecting money there is just one of many things changing the area. Lots of people have started to inject money into the area. Higher end shops and restaurants are opening or planned. Crime is down. There is the newer rail line connecting other parts of the more desirable city. The entire city is experiencing a revitalization.
While there were stories about rents doubling or more, those that I heard were limited to businesses. The average rent increases have been steep, but still much lower, around 7.5%-12.5%. There have also been buildings gutted to replace with higher end units.
The reality is that with or without the Rams stadium, Inglewood was already on a dramatically changing course. The poorer people who lived there were always going to get pushed out by the large pool of middle class people who cannot afford the surrounding areas. There is just too much overflow from the surrounding areas for this not to happen.
- Member since 2018 · 563 posts · 562 votes6y
you're best off just rolling your eyes and letting out a big sigh and then saying something like: "the very fact that you would pose such a question, indicates a very low likelihood of you being able to comprehend my answer"
....and then snap out of that day dream, having realized that you just smiled and ignored them and didn't say anything.
- Real Estate Agent · Philadelphia, PA · Member since 2018 · 416 posts · 396 votes6y
@Tyler Rowland does a bank feel guilty if they foreclose on a property? Absolutely not. Business is business.
- Member since 2019 · 20 posts · 7 votes6y
@Tyler Rowland The problem isn't with charging market rates, but rather that market rates are ruinously high for so many people.
- Member since 2019 · 20 posts · 7 votes6y
@Greg M. Many voters are stupid, many politicians are evil, and yes many landlords are greedy. Bad apples in all of the barrels.
- Rental Property Investor · Centralia, WA · Member since 2017 · 75 posts · 85 votes6y
Hell no. A poster here already mentioned about the stuff people waste their money on: booze, cigarettes, lottery tickets. How much is a pack of cigarettes these days? $5-$7 a pack? How much do people smoke a day? 1 pack? 30 days x $5 a pack=$150 a month. That's for cigarettes. Cable TV? $100 a month? Cell phone service? $100 a month? As an owner, I'm only asking for a $30-$50 monthly rent increase. Are you fuc@#ing kidding, a grown *** person can't work an extra 4 hours a month or cut back on a small amount of spending to cover the rent increase? People need to look at their spending habits and ask themselves where all their money went.
- Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes6y
@Tyler Rowland the opposite it true. Landlords who don't raise rents should feel guilty. I have seen this happen many times. The tenant lives there 10-15 years and never gets a rent increase. Then the owner sells the property (for market price) and the new landlord is forced to raise rents. The tenant can't handle the large rent increase, so is forced to move out. They have trouble finding anything decent at their old rent price. Had their landlord just pushed reasonable increases every year, they could have adjusted over time.
Landlords who don't raise rent do not do it because of guilt. They do it because of fear the tenant will leave. If you are saying "I feel guilty" the truth is you feel scared. It either means you should not be in the landlord business or hire a property manager. Fear has no place in business.
- Investor · Cincinnati, OH · Member since 2015 · 242 posts · 182 votes6y
@Joe Splitrock. You raise a good point. Many times I see a multi family listing which advertises “room to raise rents” or “rents below market” as if this makes the property more attractive. Of course they want a sales price based on market rents. Have cake, eat too.
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