Raising Rent In Lakewood

[jye]

Is it just a difference in mindsets/goals?

Mindsets:
Need to get as much as I (rightfully) can by charging market value vs what do I care about market value, my costs on this are X so I can charge X + profit margin and that's all the hishtadlus I need to do.

Goals:
Cover a mortgage/home expenses so I only need to charge my costs to offset the house vs I need to buy a new house/new car and therefore need to get market value so I can translate that into a new house/car for myself.

A rental apartment is an income stream along with salary, investments etc. that helps cover one’s cost of living. I’m not sure why it would be viewed solely in the context of mortgage and home expenses. If one’s tuition, groceries, car payments, clothing expenses, and just about everything else in life are going up wouldn’t it make sense to get market value for your asset to cover those expenses?

I would go into the propriety of asking for a (tzedaka funded) tuition scholarship , or choosing to scrimp on a tutor, private therapy, or other expenditures that would help one’s kids while leaving $10,000 annually in rental income on the table to be a “nice guy”, but that’s probably for a different thread.

[aygart]

Is it just a difference in mindsets/goals?

Mindsets:
Need to get as much as I (rightfully) can by charging market value vs what do I care about market value, my costs on this are X so I can charge X + profit margin and that's all the hishtadlus I need to do.

Goals:
Cover a mortgage/home expenses so I only need to charge my costs to offset the house vs I need to buy a new house/new car and therefore need to get market value so I can translate that into a new house/car for myself.

Why is rent only to cover the cost of the house?

[dm123]

Why is rent only to cover the cost of the house?

Should have written costs plus a bit of profit. Like anything else - do you need to maximize your profit by taking a higher market value or are you happy with your cost + profit margin.
Caveat when it comes to rental units in a market that only allows small percent yearly increases like Lakewood - bump every year so you aren't stuck years down the road like some of the discussions here.

A rental apartment is an income stream along with salary, investments etc. that helps cover one’s cost of living. I’m not sure why it would be viewed solely in the context of mortgage and home expenses. If one’s tuition, groceries, car payments, clothing expenses, and just about everything else in life are going up wouldn’t it make sense to get market value for your asset to cover those expenses?

I would go into the propriety of asking for a (tzedaka funded) tuition scholarship , or choosing to scrimp on a tutor, private therapy, or other expenditures that would help one’s kids while leaving $10,000 annually in rental income on the table to be a “nice guy”, but that’s probably for a different thread.

If they need the money yes I would also question the propriety. Could be I missed that part and assumed those who rent out at lower than market were comfortable and covering what they need to (plus some profit). And yes when I talk to people about money and they say they don't have enough income I tell them to review their current streams (salary/business revenue/investment income/rental basements etc) and it's sometimes very easy and in their rights to get a nice bump right there by raising rates etc.

[aygart]

Should have written costs plus a bit of profit. Like anything else - do you need to maximize your profit by taking a higher market value or are you happy with your cost + profit margin.
Caveat when it comes to rental units in a market that only allows small percent yearly increases like Lakewood - bump every year so you aren't stuck years down the road like some of the discussions here.


If they need the money yes I would also question the propriety. Could be I missed that part and assumed those who rent out at lower than market were comfortable and covering what they need to (plus some profit). And yes when I talk to people about money and they say they don't have enough income I tell them to review their current streams (salary/business revenue/investment income/rental basements etc) and it's sometimes very easy and in their rights to get a nice bump right there by raising rates etc.

Why does it depend on when I bought the house? If I bought it 30 ago that means I had my money tied up all those years.

Many people but rental properties for their day to day expenses

But what should the owner do when the market is lower than his expenses? Will the renter then pay above market? How will he raise the rent if it is already above market?

[dm123]

Why does it depend on when I bought the house? If I bought it 30 ago that means I had my money tied up all those years.

Many people but rental properties for their day to day expenses

But what should the owner do when the market is lower than his expenses? Will the renter then pay above market? How will he raise the rent if it is already above market?

Who said it depends when one buys the house, yesterday or 30 years ago?

Many people buy homes with a rental basement with the mindset of having the basment rental help cover a mortgage they otherwise couldn't afford.

What should anyone do when their market is lower then expenses?

[aygart]

Who said it depends when one buys the house, yesterday or 30 years ago?

Many people buy homes with a rental basement with the mindset of having the basment rental help cover a mortgage they otherwise couldn't afford.

What should anyone do when their market is lower then expenses?

Whoever says it depends on expenses is inherently saying that.

[jye]

Is it just a difference in mindsets/goals?


Goals:
Cover a mortgage/home expenses so I only need to charge my costs to offset the house vs I need to buy a new house/new car and therefore need to get market value so I can translate that into a new house/car for myself.

Trying to wrap my head around this. A friend of mine bought in the upper 300’s in the heart of Lakewood years ago. He did pretty well over the years and is now building a really nice house on a cul de sac in Jackson. His new house is fully paid for and then some. Are you saying the right thing for him to do is to list the Lakewood house at 379k since he has no need to charge market value to cover the cost of his new home?

[dm123]

Trying to wrap my head around this. A friend of mine bought in the upper 300’s in the heart of Lakewood years ago. He did pretty well over the years and is now building a really nice house on a cul de sac in Jackson. His new house is fully paid for and then some. Are you saying the right thing for him to do is to list the Lakewood house at 379k since he has no need to charge market value to cover the cost of his new home?

I'm not saying the right thing or what is supposed to be done. I'm just saying there may be different mindsets/situations which will lead to different behaviors in how one sets the price.

If one is covering their costs and making a whopping profit, and wealthy, but still trying to squeeze market price out of a struggling yingerman is that right thing? Obviously there needs to be an appreciation of the fuller picture and it's not simply the market dictates what the right price is. Although maybe this belongs on an economics/market philosophy/hashkafa thread if there is one.

[yuneeq]

I'm not saying the right thing or what is supposed to be done. I'm just saying there may be different mindsets/situations which will lead to different behaviors in how one sets the price.

If one is covering their costs and making a whopping profit, and wealthy, but still trying to squeeze market price out of a struggling yingerman is that right thing? Obviously there needs to be an appreciation of the fuller picture and it's not simply the market dictates what the right price is. Although maybe this belongs on an economics/market philosophy/hashkafa thread if there is one.

Every market has a range of prices. If someone has plenty of money and wants to price at the lower end of the market, that’s nice of them not to try squeeze out every last dime. But to grossly misprice because of “yashrus” is stupidity.

[aygart]

I'm not saying the right thing or what is supposed to be done. I'm just saying there may be different mindsets/situations which will lead to different behaviors in how one sets the price.

If one is covering their costs and making a whopping profit, and wealthy, but still trying to squeeze market price out of a struggling yingerman is that right thing? Obviously there needs to be an appreciation of the fuller picture and it's not simply the market dictates what the right price is. Although maybe this belongs on an economics/market philosophy/hashkafa thread if there is one.

How about a wealthy tenant bargaining down a struggling landlord? It is not that long ago that this was happening all over the place.

[dm123]

How about a wealthy tenant bargaining down a struggling landlord? It is not that long ago that this was happening all over the place.

How about it?

I'm just saying there may be different mindsets/situations.

Obviously there needs to be an appreciation of the fuller picture

[aygart]

How about it?

Okay so everyone should do what feels good to them. Got it.

[dm123]

Okay so everyone should do what feels good to them. Got it.

I said anything about doing what feels good?

[aygart]

I said anything about doing what feels good?

Yes

[dm123]

Yes

Where?

[yesitsme]

Trying to wrap my head around this. A friend of mine bought in the upper 300’s in the heart of Lakewood years ago. He did pretty well over the years and is now building a really nice house on a cul de sac in Jackson. His new house is fully paid for and then some. Are you saying the right thing for him to do is to list the Lakewood house at 379k since he has no need to charge market value to cover the cost of his new home?

YES
And send me his contact info asap TIA

[cholent]

Personally my tenant is paying maybe 50% of market rate. We haven't raised them since they moved in several years ago. I don't need that money to live on today, though it would certainly be helpful with seminary, weddings etc coming up. My tenants are not well off and have a kid with health issues. It just doesn't feel right for me to raise the rent on them as they're dealing with that. If I raised by 5% or 10% it would be just a few hundred dollars a year difference in any case, and I won't raise them by a crazy amount. And it helps that they are dream tenants.

[TimT]

Personally my tenant is paying maybe 50% of market rate. We haven't raised them since they moved in several years ago. I don't need that money to live on today, though it would certainly be helpful with seminary, weddings etc coming up. My tenants are not well off and have a kid with health issues. It just doesn't feel right for me to raise the rent on them as they're dealing with that.

דער זכות וועט דיר ביישטיין

[dm123]

Personally my tenant is paying maybe 50% of market rate.

Every market has a range of prices.

yuneeq, is this in the "range of prices"?

[jye]

Personally my tenant is paying maybe 50% of market rate. We haven't raised them since they moved in several years ago. I don't need that money to live on today, though it would certainly be helpful with seminary, weddings etc coming up. My tenants are not well off and have a kid with health issues. It just doesn't feel right for me to raise the rent on them as they're dealing with that. If I raised by 5% or 10% it would be just a few hundred dollars a year difference in any case, and I won't raise them by a crazy amount. And it helps that they are dream tenants.

An existing tenant is a whole different story.