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Steven Taylor
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rents going up

Steven Taylor
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Posted Feb 20 2024, 05:12

For those of us that have been doing this for a long time (25) years its crazy to see how much the rents have gone up in the last 5 years. When I started I had a 2 bedroom for $495 a month it took 20 years to get that rent to $575.  Now in the last 5 years have gone to $895 

I have houses that was $500 now $1300 

Will we ever see this kind of inflation again? 

To be honest I dont think the rents have maxed out just yet. 

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Erin Spradlin
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Erin Spradlin
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Replied Feb 20 2024, 08:51

@Steven Taylor - So many thoughts on this. 
I think that the rent prices will continue to go up because, unfortunately, fewer and fewer people have control of the rental market/own investments. In places like NYC, where the rental vacancy rate is below 1%, all the power is with the landlord and this will drive prices up. I think we will see this more and more throughout the United States.

I also believe the nature of renting is changing. Specifically, I think midterm rentals / furnished rentals, are going to become the norm rather than the exception. I think we are already starting to see that shift, and that midterm rentals will grow in popularity not only with travelers but also with local tenants. If I had been more aware of/presented as an option a furnished rental when I was 20-30 years old, I definitely would have taken it. 

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Steven Taylor
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Steven Taylor
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Replied Feb 20 2024, 13:19

Here is lorain ohio we keep they full most of the time Hardest part is getting them rent ready

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Michael K Gallagher
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Michael K Gallagher
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Replied Feb 20 2024, 13:28

@Steven Taylor I just posted a unit for rent for a client here in central OH, and it was at the top end of what I thought we could get.  The response and inquiries have really blown me away. I agree inflation is for sure having an effect but the sheer quantity of demand and lack of housing in the area is really what I think is driving it.  Even in the past decade, my wife and I rented a unit in a decent apartment complex for $885, the same unit now is $1050...and thats from their website so I'm sure its the teaser rate to get you in the door.  

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Nicole Heasley Beitenman
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Nicole Heasley Beitenman
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Replied Feb 22 2024, 15:14
Quote from @Erin Spradlin:

I also believe the nature of renting is changing. Specifically, I think midterm rentals / furnished rentals, are going to become the norm rather than the exception. I think we are already starting to see that shift, and that midterm rentals will grow in popularity not only with travelers but also with local tenants. If I had been more aware of/presented as an option a furnished rental when I was 20-30 years old, I definitely would have taken it. 

I'm going to play the devil's advocate--I think we're going to hit a ceiling. We saw the STR tidal wave peak, and now STR operators are dealing with higher levels of vacancy. I think we'll see the same with MTR's. They're the new trend so too many operators will dive in, they'll hit a peak, and then we'll see units revert back to LTR's, owner-occupied units, or maybe some entirely new model we haven't discovered yet. The traditional LTR is becoming less and less affordable for the general population. I don't see the average Jane being able to afford to live in a furnished rental as a traditional tenant. Either way, I think we're in for a wild ride!

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John Underwood
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John Underwood
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Replied Feb 22 2024, 18:26

@Steven Taylor

I agree. I'm getting double the rent I was getting not that long ago.

And the appreciation on houses I have owned 10 years or more is crazy.

Owning real estate is how wealth is created.

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Bill Brandt#3 1031 Exchanges Contributor
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Bill Brandt#3 1031 Exchanges Contributor
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Replied Feb 22 2024, 18:35

You’re at 25 years and rents haven’t doubled yet? That’s well under 3% per year. That’s not too good. Hopefully you don’t face another bad 20 years and the last 5 is your new normal. But 20 years with less than 1% per year rent increases? Each year being worse than the one before with higher insurance, property taxes and wages? I definitely would have bailed. You were losing to inflation, and that’s hard in real estate. It’s weird you almost have to hope you had no appreciation or your return on equity was getting much worse every year. For example Our home values have more than doubled in the last 10 years but the rents are only up about 80%, so the returns on equity are decreasing. 

If you truly believe you could be looking at another 10-20 years of sub 1% rent growth bail now before others figure that out and the values tank. Good luck either way. 

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Zachary Deal#1 Medium-Term Rentals Contributor
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Zachary Deal#1 Medium-Term Rentals Contributor
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Replied Feb 23 2024, 08:57

I think that rents will continue to slowly tick up until the supply of housing catches up to current housing demand. Hard to say for sure of course but it seems likely rental markets will remain strong for the foreseeable future 

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Jill F.
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Jill F.
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  • Akron, OH
Replied Feb 23 2024, 09:27
We've seen our rents in Akron go up substantially since 2016 when we started. However, our costs have also increased substantially: An HVAC system that cost 3500 in 2016 costs 6500 now. Labor that was $10/hour in 2016 is now $20/hour. And our taxes just increased  25-30% in January. Demand immediately after the pandemic was the strongest, but while it's calmed down a little it's stilI pretty strong for anything nice. I put a SFR on the market week before last and had 10 high quality applications in 4 days (and I require completion of a free application before I show a property).

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Erin Spradlin
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Erin Spradlin
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Replied Feb 23 2024, 10:40
Quote from @Nicole Heasley Beitenman:
Quote from @Erin Spradlin:

I also believe the nature of renting is changing. Specifically, I think midterm rentals / furnished rentals, are going to become the norm rather than the exception. I think we are already starting to see that shift, and that midterm rentals will grow in popularity not only with travelers but also with local tenants. If I had been more aware of/presented as an option a furnished rental when I was 20-30 years old, I definitely would have taken it. 

I'm going to play the devil's advocate--I think we're going to hit a ceiling. We saw the STR tidal wave peak, and now STR operators are dealing with higher levels of vacancy. I think we'll see the same with MTR's. They're the new trend so too many operators will dive in, they'll hit a peak, and then we'll see units revert back to LTR's, owner-occupied units, or maybe some entirely new model we haven't discovered yet. The traditional LTR is becoming less and less affordable for the general population. I don't see the average Jane being able to afford to live in a furnished rental as a traditional tenant. Either way, I think we're in for a wild ride!

@Nicole Heasley Beitenman - I appreciate this perspective and the pushback! Totally agree we are headed toward a wild ride... but, I still feel like there's a huge market for people that want furnished long-term rentals, aka midterm rentals, and so I think we have a long ways to go before we hit that cap. That said, we will see. After awhile, people, and tenants specifically, can only pay so much. 

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Ryan Arth
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Ryan Arth
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Replied Feb 29 2024, 08:07
Quote from @Jill F.:
We've seen our rents in Akron go up substantially since 2016 when we started. However, our costs have also increased substantially: An HVAC system that cost 3500 in 2016 costs 6500 now. Labor that was $10/hour in 2016 is now $20/hour. And our taxes just increased  25-30% in January. Demand immediately after the pandemic was the strongest, but while it's calmed down a little it's stilI pretty strong for anything nice. I put a SFR on the market week before last and had 10 high quality applications in 4 days (and I require completion of a free application before I show a property).

 Yep, inflation has not just been in housing. My barber is up 26% over the past few years. 

Even at the higher end, the demand for $3,000-$3,600 rentals late summer was very strong last year in good school districts. Nothing sat a month.

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Steven Taylor
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Steven Taylor
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Replied Feb 29 2024, 08:28
Quote from @Bill Brandt:

You’re at 25 years and rents haven’t doubled yet? That’s well under 3% per year. That’s not too good. Hopefully you don’t face another bad 20 years and the last 5 is your new normal. But 20 years with less than 1% per year rent increases? Each year being worse than the one before with higher insurance, property taxes and wages? I definitely would have bailed. You were losing to inflation, and that’s hard in real estate. It’s weird you almost have to hope you had no appreciation or your return on equity was getting much worse every year. For example Our home values have more than doubled in the last 10 years but the rents are only up about 80%, so the returns on equity are decreasing. 

If you truly believe you could be looking at another 10-20 years of sub 1% rent growth bail now before others figure that out and the values tank. Good luck either way. 


 yes rents have gone up slow but it has allowed me to buy over 300 of these in the last 25 years and has paid off very well for a guy that just made it though high school. Im not a very sophisticated investor like many in this group, but i just keep it simple does the rent cover my expenses and someday the tenants will pay this place off for me. 

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Erin Spradlin
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Erin Spradlin
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Replied Feb 29 2024, 08:40
Quote from @Ryan Arth:
Quote from @Jill F.:
We've seen our rents in Akron go up substantially since 2016 when we started. However, our costs have also increased substantially: An HVAC system that cost 3500 in 2016 costs 6500 now. Labor that was $10/hour in 2016 is now $20/hour. And our taxes just increased  25-30% in January. Demand immediately after the pandemic was the strongest, but while it's calmed down a little it's stilI pretty strong for anything nice. I put a SFR on the market week before last and had 10 high quality applications in 4 days (and I require completion of a free application before I show a property).

 Yep, inflation has not just been in housing. My barber is up 26% over the past few years. 

Even at the higher end, the demand for $3,000-$3,600 rentals late summer was very strong last year in good school districts. Nothing sat a month.

@Ryan Arth That's an excellent point. Inflation seems to be an almost universal-economic issue at the moment, and premium housing has always been in demand. As a note, the lull in housing seems to be over. Sellers are receiving multiple offers again and giving up very little to buyers in Denver and Colorado Springs. 

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Leo R.
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Leo R.
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Replied Feb 29 2024, 08:49

So, how does this fit with all the recent news that large multifam rents have been decreasing the last year?

I have single fam and small multifam properties, and last year I had my biggest rent increases ever (and I'm expecting this year to also have significant rent increases). Because I saw demand increasing, I decided to seize the opportunity by improving my properties (I went on a tear of cosmetic rehabs, and now my properties are the best in their class, which is allowing me to maximize my rents further and capitalize on the demand)...but, meanwhile, all we hear from the large multifam operators is that their rents are decreasing (I've also seen repots that large multifam supply is becoming over-saturated in some markets)...

So, rents increasing in single fam/small multifam, and rents decreasing in large multifam--is that the dynamic folks are seeing in their markets? 

Do folks think the rent decreases at the large multifam properties will eventually suppress the rents on the single fam and small multifam properties?

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Nicole Heasley Beitenman
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Nicole Heasley Beitenman
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Replied Feb 29 2024, 10:01
Quote from @Ryan Arth:

 Yep, inflation has not just been in housing. My barber is up 26% over the past few years. 

Even at the higher end, the demand for $3,000-$3,600 rentals late summer was very strong last year in good school districts. Nothing sat a month.

Furnished or just traditional LTR's!? (Also, hello! Hope you're doing well.)

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Ryan Arth
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Ryan Arth
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Replied Feb 29 2024, 10:41
Quote from @Nicole Heasley Beitenman:
Quote from @Ryan Arth:

 Yep, inflation has not just been in housing. My barber is up 26% over the past few years. 

Even at the higher end, the demand for $3,000-$3,600 rentals late summer was very strong last year in good school districts. Nothing sat a month.

Furnished or just traditional LTR's!? (Also, hello! Hope you're doing well.)

Unfurnished at those rates, and multiple offers (for a rental), offering three months upfront in cash and such. Anyone that needed furnished for a MTR I found them someone who would do a shorter lease and then just sent them to cort.com for the furnishings. 

(And a hello to you as well. Congrats on the meetups, the family, everything.)

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Ryan Arth
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Ryan Arth
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Replied Feb 29 2024, 10:45
Quote from @Leo R.:

So, how does this fit with all the recent news that large multifam rents have been decreasing the last year?

I have single fam and small multifam properties, and last year I had my biggest rent increases ever (and I'm expecting this year to also have significant rent increases). Because I saw demand increasing, I decided to seize the opportunity by improving my properties (I went on a tear of cosmetic rehabs, and now my properties are the best in their class, which is allowing me to maximize my rents further and capitalize on the demand)...but, meanwhile, all we hear from the large multifam operators is that their rents are decreasing (I've also seen repots that large multifam supply is becoming over-saturated in some markets)...

So, rents increasing in single fam/small multifam, and rents decreasing in large multifam--is that the dynamic folks are seeing in their markets? 

Do folks think the rent decreases at the large multifam properties will eventually suppress the rents on the single fam and small multifam properties?

 @Leo R. The softening in multifamily rents, in some markets, is largely attributed to the supply of new luxury product coming on the market. This is putting downward pricing pressure on the classes below it, as people move up for a comparably better unit at a relatively reasonable increase in cost. 

Jay Parsons is a multifamily economist, who posts a lot on LinkedIn. He is a great source for data on this subject. 

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Ryan Arth
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Ryan Arth
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Replied Feb 29 2024, 10:50
Quote from @Erin Spradlin:
Quote from @Ryan Arth:
Quote from @Jill F.:
We've seen our rents in Akron go up substantially since 2016 when we started. However, our costs have also increased substantially: An HVAC system that cost 3500 in 2016 costs 6500 now. Labor that was $10/hour in 2016 is now $20/hour. And our taxes just increased  25-30% in January. Demand immediately after the pandemic was the strongest, but while it's calmed down a little it's stilI pretty strong for anything nice. I put a SFR on the market week before last and had 10 high quality applications in 4 days (and I require completion of a free application before I show a property).

 Yep, inflation has not just been in housing. My barber is up 26% over the past few years. 

Even at the higher end, the demand for $3,000-$3,600 rentals late summer was very strong last year in good school districts. Nothing sat a month.

@Ryan Arth That's an excellent point. Inflation seems to be an almost universal-economic issue at the moment, and premium housing has always been in demand. As a note, the lull in housing seems to be over. Sellers are receiving multiple offers again and giving up very little to buyers in Denver and Colorado Springs. 


Yes, they report inflation without including Shelter, which obviously impacts people quite a bit. And yes, we are back to multiple offers and such. Things opened up quite a bit 2/1, despite rates still hovering around 7%. Lots of traffic through open houses and listings/pendings are comparable with a year ago (depending on the county). With the NAR economists expecting rates at 6% by year end, I think people seem to be less interested in waiting for rates to come down, knowing that a year might only save them a point.

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Steve K.
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Steve K.
  • Realtor
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Replied Feb 29 2024, 20:33

We're seeing some crazy numbers in Boulder these days. I just ran rent comps on our 2 rentals here to see what I should adjust those rents to and one comped at $15k/mo.(furnished, MTR), the other $8,700/mo.(unfurnished, LTR). That's more than double in just a few years. I have a client with a few luxury condos downtown renting for $35k/mo. ea.(furnished, MTR), up from $10k when they bought them in 2020 so those more than tripled in 4 yrs. That's an outlier not the norm, but still wild. 

My Denver and Longmont rentals are doing very well also, but not quite as well as the Boulder ones (now I'm kicking myself for buying in those less expensive markets for more upfront cashflow. I would have done much  better over time if I had just paid a bit more and had less cashflow up front here closer to home). 

It's a good thing I'll be able to adjust rents up however, because operating expenses have gone way up also thanks to steeply increasing property taxes, insurance, utilities, lawn care, snow removal, appliances, hiring anyone to do anything, materials, price per square foot to remodel, etc. all goods and services have gone way up.  

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Steven Taylor
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Steven Taylor
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Replied Mar 15 2024, 06:35
Quote from @John Underwood:

@Steven Taylor

I agree. I'm getting double the rent I was getting not that long ago.

And the appreciation on houses I have owned 10 years or more is crazy.

Owning real estate is how wealth is created.


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Steven Taylor
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Steven Taylor
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Replied Mar 15 2024, 06:36

Agree my net worth has gone up 3x in the last 5 years. Fun to watch