Every time I see this thread come through, I read, “UMC” as, “United Methodist Church.”
Carry on.
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When I clicked on it that was my thought too, and I wondered who would post a church specific thread on CC…
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One of our kids had rent go from $750 a month in 2020 to $1350 a month starting October 2021. Yes…almost doubled rent during the pandemic. Building was sold and they were doing nice renovations to all of the empty apartments (6 of the 8 units had tenants that moved out). My kid and one other tenant stayed through the first rent increase in 2020. Oh…and their units were NOT renovated.
Both of those tenants (our kid included) moved out before October 2021.
It was a great place with the first owner, who was a sole proprietor…and knew his tenants. Sale was to some corporation. Personal contact was completely lost. Which is unfortunate.
And yes…our kid is paying less per month to own a townhouse that is almost double the size. So…it all worked out.
ETA…I wouldn’t say we are “struggling” but we do think about large purchases before we make them.
We were in @Creekland’s boat with our tenants. Except for one month with one of our (two) tenants, we were paid every month. I think it helps that we’re Mom & Pop and that we’ve always been very good to them and they’re very good tenants to us.
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I should add in my above story…my kid paid his full rent every single month of the COVID time…even though for a good portion he wasn’t working at all, and for another portion, he was earning about 50% of pre-COVID income. Yes, used savings…but also applied for rental assistance and got a little. But still…this kid was a tenant who paid the bills and on time. And was rewarded with a HUGE rent increase.
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Your son’s experience is exactly what I’m talking about with the greed aspect of the owners.
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Well…the building did sell…and the original owner was terrific and deserved to gain from his holdings. It was the private company that raised the rents under the pretext that they were renovating. Fine… ut not for those living in units not renovated.
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Investment funds are buying a lot of apartments and single family homes. There are 5 major funds on Wall Street that buy the buildings for cash and then have management companies run them. They are doing it to make money, not to be nice to the renters. We have some houses in our neighborhood and those rents were about $1500/mo. Now that are $2500/3000, just because that’s what the market will support. Some were flipped and had renovations but most were just re-rented.
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I really feel for the younger generation when hearing of these kind of shockingly high rent increases.
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I think it very much depends what you were used to in college and where you are moving to. S thinks the brand new 3 bedroom apartment (with pool, gym etc) he’s sharing with two friends in DC is good value at $5000 per month because his benchmark is a tired old studio loft student place in LA without usable aircon for $2650. But if he’d come from a much cheaper town, like his sister’s $1600 per month for a new 1 bed in Salt Lake City (again with aircon and great facilities) then he’d have a lot more sticker shock.
My first job out of college I spent nearly 50% of take home pay for rent. So I don’t think high rents relative to earnings are anything new for college grads.
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Glad my retirement will be a pension. My IRA lost half it’s value in the last 2 months. Fortunately, I’s still young enough for it to go back up again.
The long term effect of that eviction/rent moratorium is that mom and pop couldn’t hold on. The large institutional buyers are snatching up those smaller units and complexes. They have deep pockets to weather some downturns. The will not know who their tenants are, nor care.
We have a building where everyone paid. I wanted to thank them by giving one month rent reduction. Our management company told us this was a very bad idea. The property is in a rent controlled area. Tenants are protected to incredible levels (oh the stories I could tell). A one time rent rebate could be seen as a voluntary permanent rent reduction and we could be hauled in front of the tenant board if we then went back to the ‘regularly scheduled’ rent. sigh.
Our college student housing properties were mostly empty. Many of those that did stay - simply refused to pay. Nothing we could do. One of our lenders went nasty by illegally demanding we pay down the mortgage due to not meeting the contracted DSR. We sold those at a loss or at a break even.
Right now demand for the college housing units is extremely high. We have wait lists. So yes, we are going to reap all we can. Since that rent and eviction moratorium is now a tried and tru method for dealing with issues…you can bet it will be re-enacted.
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Yep, this is what I despise personally - and I definitely don’t think it’s doing our country any favors. But that’s capitalism when it comes without empathy for your fellow human. It goes on in other areas too - like prescription meds. One need only google epi-pens or insulin. Take from the poor and give to the wealthy, because they can.
I can’t go further, obviously, but I recognize not all rent increases fit into what I despise. I feel fortunate we don’t have to raise our tenant’s rate. It’s still profitable for us and hopefully helpful to him. Win-win.
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Yikes! I’d be looking for someone else to manage it. For the last three months we’re down 3% and it’s working its way back up.
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It was actually an old 401k I rolled over into an IRA. That 401k was poorly managed…UGH!
They’ll be buying fewer of these houses and apartments and there may even be fewer of these funds in the near future. The fundamentals are changing in the real estate market. And if the Manchin-Schumer agreement becomes law, they’d also be facing higher taxes with the elimination of the carried interest benefit.
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Good luck. I just looked more specifically at mine and for the last month we’re up 3%. For three months we’re down 3%. Anything that dropped half its value in 2 months was overly invested in something IMO.
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@Creekland our IRA’s are down just a bit less than yours and have now started going back up again. We have an excellent financial planner who I’ve known more than 45 years that we trust with our money so we did not worry when the market started dropping.
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In theory yes, but it doesn’t work out in practice for us because we don’t have the extra cash to pay down the debt ahead of schedule.
But during high inflation, does it make sense to pay down fixed rate (or where adjustable rates are limited how much they can adjust) debt ahead of schedule?
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