Biden made an ass of himself on the inflation topic on Tuesday. It turns out that inflation is running at over 8% for the sixth consecutive month, and that is just the understated official rate. The Fed is reportedly considering a full point increase in interest rates next week, the highest in 40 years.

It’s that time of year again. Time to begin looking at market adjustments for our rentals. We have decided that we are not going to rent out one of our rental properties any longer. We are going to sell it in a few months when the current lease runs out.

The second property is more profitable, and we are looking at adjustments. The market isn’t as tight as it was last year, with inventory of available rentals being a bit more than it was. Prices even stabilized a bit. The market can’t keep rising at 25% per year forever, I guess. Still, we held last year’s increase a bit because we didn’t want to get too pushy.

Because of Florida’s insurance issues, our insurance costs went up. Our taxes went up. Our other expenses are also rising.

That means the house we are currently renting out at $1,825 is far below market and is going to see a rent increase. Zillow rentals claims that the house can rent for $2,550, but that seems too high. The current market is running between $1.15 and $1.28 a square foot for comparable rentals, meaning that I could likely rent it out for $2,175 to $2,425.

Now I am not the kind of landlord who will screw over a good tenant. In three years, he has only been late on rent once. Still, fiscal and market conditions are what they are, so I think we are looking at setting rent at about $2,000 per month. I do need to eventually put new countertops into the place, and if the tenants insist upon that, then the rent will have to be increased closer to market, perhaps to $2,100.

In the meantime, everything you buy will continue to get more expensive.

Categories: economics


Paulb · September 14, 2022 at 5:23 pm

I just got notified that my insurance carrier is going to do a drone overflight of my roof. Makes me nervous. They’re in good shape (the insurance carrier) but the roof is 20 years old.
The market in the palm beaches area is cooling off a bit but still insane.

Elrod · September 15, 2022 at 12:34 am

You might want to re-think your hesitancy RE: raising the rent. One leftist wizard waves his or her magic wand and Presto! rent controls.

Maybe a reasonable bump up with incorporated credit(s)? How the lease legalese deals with that will be very important, but, say, a $300 bump (about the delta between 1825 and 2100) but which incorporates a $100 “credit” toward, maybe, the water bill, washer/dryer rental, or grass cutting. Or something (and if you’re renting the W&D then there’s the associated repair responsiblity that goes with it).

RE: new countertops – ancillary stuff – like replacing the existing sink (and the associated plumbing stuff) when the new countertops go in, can very quickly add to the overall cost.

    Divemedic · September 16, 2022 at 8:28 am

    Price controls in Florida don’t work like that. It’s tough to get price controls here, even though Orange county is trying it.

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