Rents are bouncing again. What to do when you anticipate an enormous improve

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Like many other renters, Trish DaCasta grabbed an apartment she normally couldn’t afford during the pandemic.

The upgrade was big: she was able to leave the space she had shared with roommates for more than five years for her own studio in a luxury downtown San Diego building with a gym and pool.

“It was amazing,” said DaCasta, 36. “I’ve wanted to live alone since the day I graduated from college.”

But the good times have been tainted by a feeling that they were only temporary.

And in the past few months, DaCosta, a Pilates teacher, has seen that the rental prices for open apartments in her building were just as high, if not higher, than the prices before Covid. According to her calculations, her current rent could easily increase from around $ 1,900 to $ 2,300 or more. That would force her to move.

“It’s just too much,” she said.

Trish DaCosta

Courtesy: Justin Nunez

As cities resemble their self before Covid again and the time of reduced rents flies by, many tenants are facing a similarly uncomfortable turnaround.

“Tenants who originally received pandemic pricing are now seeing large rent increases when they renew – sometimes over 40%,” said Allia Mohamed, CEO of openigloo, which enables New York City tenants to screen landlords. “I’m amazed it’s legal.”

While it is true that most tenants in the United States are not protected by rental control policies, some are. Others are supported by conditions that they are given a certain period of time before their rent is increased. And in almost all cases it is worth negotiating a better price with your landlord, experts say.

How to prepare for a rent increase.

Research, research, research

To begin with, tenants should be aware of all the rights that their city and state have to them, Mohamed said.

There is a growing movement across the country to regulate rent increases. In Oregon, for example, most increases are capped at 7% plus inflation. Many cities in California have a cap too.

While many landlords are free to increase your rent as much as they wish if they renew, some will require you to cancel. For example, Seattle landlords are required to notify their renters 180 days of any change, and most Washington renters are guaranteed a 60-day warning.

You can get a sense of how fair your adjusted price is by comparing it to rents for similar apartments in your area, Mohamed said. Openigloo.com has a rental calculator that can help New Yorkers figure out if they are paying too much. Tenants in many cities can check average rental prices on Zumper.com.

“If you find other locations near you are costing less, make a list of examples,” said Patty Crawford, vice president of strategic accounts at Zumper. “The more data you have, the better.”

In addition to the hard numbers, it can also be useful to find out more information about your landlord and your building.

Negotiate

What you learn can give you more leverage in your negotiations.

“Do you have a small landlord who lives in your building?” asked Mohamed. You may want to emphasize how considerate and calm you are as a tenant and that they want to keep you as a neighbor.

“Does your landlord have any vacancies?” She asked. “You could offer to get the word out and refer your friends to help them occupy apartments in exchange for a rental concession or a discount.”

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You can also ask your landlord about their preferences.

For example, if you signed a two-year lease instead of a one-year lease, they might consider a lower increase.

If you can, Crawford said, your landlord might respond well to an offer to prepay a few months’ rent. “Many property managers or owners would be delighted not to have to worry about late rental payments,” she noted.

Experts recommend starting these conversations as soon as possible.

“If your property manager or owner feels your despair, you are not going to have a solid bargaining position,” said Crawford.

Other options

If your landlord doesn’t give in on renting, you can ask for other things, Mohamed said.

“Maybe some of your equipment needs upgrading, or you want an electricity bill to be included in your rent,” she said.

Some property managers, she added, may also be willing to delay the hike. For example, you could pay half of the increase in the first six months and settle the rest in the next six months.

“If you’re expecting a raise, this could be a great compromise,” she said.

Stay or go

As dissatisfied as you may be with your increased rent, moving may not result in lower costs, said Jay Parsons, RealPage vice president and assistant chief economist. In fact, the rent increases for extensions in 2021 only increased by a third of the previous new letting rate.

“Property managers routinely pay leases for renewal below what they would charge a new occupant,” Parsons said, adding that they want to save on so-called gymnastics costs, including carpet changes, painting and cleaning.

Moving is not cheap either.

“Up-front costs like moving and utility transfers can add up and could even be more expensive than the rent increase,” Crawford said.

Even so, you don’t want to get into a situation where you can’t pay your rent or other necessary expenses. The general advice is that you shouldn’t use more than 30% of your salary on rent.

“If you go well beyond that threshold on a steep climb, I would suggest finding something else,” said Mohamed. “Even if one could tolerate the increase through cuts in other areas, this cannot be sustainable if the rent increases again in the following year.”

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