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Is Economy Doing Well?

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normando

Senior Member
Joined
May 2, 2009
Professional Status
Certified Residential Appraiser
State
California
It's that time when I need to increase the rents for my tenants. I think the economy is doing well especially with the Fed now thinking of increasing interest rates next months (where did I hear that before?). The stock market appears stable stuck around 18,500 Dow Jones. I think wages are increasing especially with some local cities raising minimum wage to over $12/hr so they should be able to afford the rent increase. However, I hear some poorer communites here are still struggling.
 

Randolph Kinney

Elite Member
Joined
Apr 7, 2005
Professional Status
Retired Appraiser
State
North Carolina
So, if you the landlord want more rent, raise the rent. Let the tenant tell you that they are not doing that well. Then list your property at the higher rent and see if you can rent it.
 

Artemis Fowl

Senior Member
Joined
Mar 16, 2004
Professional Status
Certified Residential Appraiser
State
Michigan
So what's Market Rent for your very own property you are asking about rents about?
o_O

Long term, on-time paying tenants? Lotta turnover? Hard to say...you know them.

I dunno that general economic stats are the best measure of the individuals you are dealing with.
My 2cents.
 

normando

Senior Member
Joined
May 2, 2009
Professional Status
Certified Residential Appraiser
State
California
Bay Area rents have increased significantly in past four years but not as fast as home prices. Home prices have increased between 50% to 100% during those four years. I can increase my rents $200-$600 over current rents thanks to the market. However, some tenants may even find a $50 increase too much for them. Because of the high cost of living here, those who can't afford to live here move out. I'm seeing help wanted signs for minimal wage jobs asking $15/month. There is a labor shortage for low paying jobs. It appears the economy is doing well.
 

normando

Senior Member
Joined
May 2, 2009
Professional Status
Certified Residential Appraiser
State
California
The political environment forces me to increase the rent. I have to continue raising rents but not too much so yearly increases do not seem as high. I hear news about long term commercial tenants who have a jump in rent and is "force" to close and move. The community is not happy putting the landlord as greedy. The reason for the jump is rents were artificially kept low and the tenant enjoyed the beneifts of the low rents. There is movement for rent control in Bay Area and if passed, it's retroactive. I'm thinking of increasing the rent by $100. I'm so nice.
 

Randolph Kinney

Elite Member
Joined
Apr 7, 2005
Professional Status
Retired Appraiser
State
North Carolina
The political environment forces me to increase the rent. I have to continue raising rents but not too much so yearly increases do not seem as high. I hear news about long term commercial tenants who have a jump in rent and is "force" to close and move. The community is not happy putting the landlord as greedy. The reason for the jump is rents were artificially kept low and the tenant enjoyed the beneifts of the low rents. There is movement for rent control in Bay Area and if passed, it's retroactive. I'm thinking of increasing the rent by $100. I'm so nice.

So fear of rent control is your motivation to raise rents. It has nothing to do with affordability or concern for the tenant.

Raise the rent $200.
 

normando

Senior Member
Joined
May 2, 2009
Professional Status
Certified Residential Appraiser
State
California
Yes, fear of government interferences forces me to not keep rents low. I can increase my annual rent at least $100/month for several years. I remind the tenants that they're paying below market and any major repairs will result in higher increases so they better not break things. The increases are so much better than increases from annual appraisal fee increases, if any.
 

Artemis Fowl

Senior Member
Joined
Mar 16, 2004
Professional Status
Certified Residential Appraiser
State
Michigan
Interesting environment you got there.
Could be that low pay labor shortage is due to the fact that nobody can afford to live there on $15/hr and nobody is gonna commute far for a $15/hr job.

Get some tenants that can pay market and surf the cash flow.
 
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