It isn’t just food. The hardship that was imposed upon landlords during the COVID eviction moratorium, combined with the massive migration of migrants from the large cities of the north, who are fleeing lockdowns and high taxes, is affecting rents in lower cost areas of the country. For example, South Florida is seeing skyrocketing rents.
Even here in North Central Florida, rents are rising. In the area where I own my rental, there isn’t much to rent. What there is, is becoming more expensive. I am renting out my three bedroom, 1,900 square foot home with a fenced in yard and two car garage for $1,700 a month ($0.89 per square foot). That rent includes lawn maintenance and a washer/dryer.
A new apartment complex that is nearby recently began renting a three bedroom 1,000 square foot apartment for $1,600 a month ($1.60 per square foot), and that doesn’t include a garage or washer/dryer). They are fully rented with a waitlist at that price.
My current tenants have been living in my rental for two years without an increase. In that time, my costs for insurance, property tax, and lawn maintenance have increased by about $120 a month.
What this means is that I should be increasing my rent by at least $200 a month. I could probably get $2,000 a month. The tenants would have little choice- it isn’t like they could go anywhere else and find a better deal. My wife and I have discussed it, and we don’t want to do that. At the same time, we have a business to run. We decided to compromise and will be raising the rent to $1,800.
Inflation continues.
4 Comments
TechieDude · October 19, 2021 at 9:54 am
You are a prince among men.
Most would hit them up. But it they have been good tenants, it makes sense to try and keep them. Sure, you could raise the rent even more to compensate for what’s coming, but you may wind up with deadbeats.
I’m guessing it’s going to get tougher for owners as they turn you into kulaks.
nick flandrey · October 19, 2021 at 9:21 pm
We got a property tax assessment and had to raise the rent on our rental house by $500/ month. That was a BIG hit, and far too big for us to absorb. We went to the tenants, told the truth, that we had to pass along the increase or lose $5000 per year renting the house.
We offered to show them our books and the tax statements, because we don’t actually make much money on the house.
They agreed to the increase.
We’ve been very lucky with tenants, and don’t want the costs and risks involved in finding new ones so we were very glad they could pay up.
I’m always looking for another house to use as a rental, but the markets are all over the place. But while I look, I also look for commercial, since I would prefer commercial space as the renters don’t have anywhere near the recourse that residential renters have, and commercial has continued to do well in Houston despite covidiocy. The ‘buy in’ for commercial space is much higher than for residential, and financing is harder, but eventually, the right deal will come….
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Paulb · October 20, 2021 at 1:45 pm
It’s disheartening, really, to see the sheer number of rental units skyrocketing in South Florida. Maybe that makes me a snob.
Boston’s Irish Riviera (south of the city) used to be characterized by being VERY safe. And it was. The locks on my parents’ house had not been used since they bought it 50 years before. My first truck had the key corrode into the ignition from the salt air, so it was never removed.
When the boomers began retiring, the smaller houses were turned to section 8 rentals. Guaranteed income, and Uncle Sugar picks up part of the tab for repairs caused by the tenant when they move out. The renters helped break an ordinance allowing apartments rather than detached houses. 15 years later my little hometown now has 50,000 people and the higest rate of Overdoses per capita in the US.
I live in the most expensive part of Palm Beach county now. I have spent 20+ years of being out to sea for 8-10 months a year to afford a community I liked, a place where you can leave a car door unlocked by accident from time to time. In just 2 years, the nearest apartment complex went from 8 miles away to 1.5 Luckily I live on a golf course.
I feel for the renters, I do. It’s sure not easy. I rented for my first 5 years here. But I don’t care enough to welcome more of them for sure. My company is hiring. Let them spend 300 days a year on a boat for 15-20 years, and they can move in next door.
Jonathan · October 21, 2021 at 3:00 am
I’ve noticed in multiple areas I’ve lived in across the country that apartments are similar or more expensive than rental homes which are larger; it’s an odd trend to me… Why would a house with more space and more privacy rent for less?
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