"Inflation is coming down"

[Fernando]

And when people are priced out of buying do you think "market rents" are going to decrease? LOL... Did they get a raise at the same time?

Rents have not increased as much as home prices and renters are making the most noise.
I want to increase at least 3% every year to cover annual increases in taxes and insurance and high cost of maintenance but market rents set limit in how much I can raise.

 

[Fernando]

You may not even get insurance next year unless your places are in nice condition.

This year two of my properties did not get insurance renewed. I didn't even file a claim (On that one it did increase like 23%).
The first one that was cancelled had a hard time finding another insurance company (reason indicated was inferior condition). I thought I would get a new one with much higher premiums but new premium was like $300 less.
It worked out.
Recent one I still have two more months in finding another one.

 

[Charles West]

This year two of my properties did not get insurance renewed. I didn't even file a claim (On that one it did increase like 23%).
The first one that was cancelled had a hard time finding another insurance company (reason indicated was inferior condition). I thought I would get a new one with much higher premiums but new premium was like $300 less.
It worked out.
Recent one I still have two more months in finding another one.

They are watching you Fernando and they aren't liking what they see.

 

[Fernando]

I think I'm underinsuring my replacement costs at $270/sf. Insurance recommended $400/sf. Really?
That would increase my premium by 48%. Cheapskate me will take that risk.

 

[Terrel L. Shields]

Rents have not increased as much as home prices and renters are making the most noise.

The renters are not getting paid more simply because your insurance rose, so one or the other (you or renter) has to absorb the cost increase. So, what happens if they cannot pay? They are homeless and you cannot find renters eventually when everyone is broke.

 

[DTB]

The renters are not getting paid more simply because your insurance rose, so one or the other (you or renter) has to absorb the cost increase. So, what happens if they cannot pay? They are homeless and you cannot find renters eventually when everyone is broke.

Who absorbs these increased costs? In my situation, it ain't gonna be me, I have already absorbed many of the risks of ownership. The tenant chose to have the risk of raised rents periodically, so I wouldn't disappoint them.

Eventually when everyone is broke it would be tough but around here I see many 100s of luxury rental apartments being built. I can get the trickle down from them before it hits me. My strategy has always been cash flow properties at the expense of appreciation. Cash flow is needed for living expenses and now that it is excess, it gets put use in the stock market. Much better return, for me, and no worries if property value goes to zeroish, they've made my money.

 

[Terrel L. Shields]

The tenant chose to have the risk of raised rents periodically, so I wouldn't disappoint them.

I don't think many tenants are choosing anything. Many are paying higher rent than a mortgage payment but cannot make the down payment. Catch 22. So, as long as the landlord holds the whip hand, they can charge more. I saw a landlord leave a guy in at a very low rent simply because the guy paid on time, had been there a long time and when his dishwasher quit, he asked the owner if he could simply install a new one of his choice. The landlord told me that the guy had been there 10 years. Paraphrasing but said "I make as much off him as the rest because the vacancy has been zero and I am averaging 10% vacancy on most of the other units I rent out. And I've had to repairs and repainting, even new carpets after some tenants left. So, I couldn't even rent the place for 2 months or more while updating."

A property manager I know said much the same. It was easier to keep a renter in at lower rates than find a new renter... the devil you know v the one you don't. I've seen the damage a renter can do in only 1 year.

 

[DTB]

I don't think many tenants are choosing anything. Many are paying higher rent than a mortgage payment but cannot make the down payment. Catch 22

Other life choices also come into play. There is a reason for everything.

 

[Charles West]

It is a heck of a lot cheaper to rent than to own in spite of what the renter's advocacy groups maintain.

 

[alebrewer]

Any rate cuts at this point will be reflective, not of any improvement WRT tamping down inflation, but in an effort to keep the current president in office. It would be a disaster to cut rates RN. Terrel is right - home prices would probably go up 10% in a month if rates were to drop back to around 5 or below. There is a ton of pent up demand, and rates are the only thing stopping us from seeing bidding wars again. It's painful, but it's like a snake - you have to make sure you've killed it before you pick it up.