Raising Rent In Lakewood

[ae123]

For new tenants. The rabbonim are now telling existing owner occupied landlords that they are halachicly entitled to bring the existing tenants rent up to market. I don’t think the vast majority have.

That's what I'm trying to find out.

[aygart]

The rabbonim are now telling existing owner occupied landlords that they are halachicly entitled to bring the existing tenants rent up to market.

This is not what anyone was quoted as saying.

[aygart]

I guess ymmv. Take a 3500 sq ft home with a three bedroom rented for 1225. Taxes are somewhere around 15-16k. Insurance 2-2.5k maintenance maybe 1k-2k per year on avg. that’s already over by a nice amount.

But then it wasn't covering it originally either.

[ae123]

Did taxes and insurance really go up so much? How much money towards appliances are you spending on your tenant.

I never quite understood this position.
Is a landlord only allowed to charge rent relative to his mortgage+taxes+insurance+maintenance?
What happens after a mortgage is paid off & the landlord is left with just taxes+insurance+maintenance - is he expected to charge less rent?
Also, why isn't rental income just another stream of income and with the landlord's tuitions etc. going up he needs more income?

[ae123]

This is not what anyone was quoted as saying.

I personally heard that from R' Forscheimer, R' Felder, & R Kahan.
Although, they are all recommending a psharah.

[ae123]

That’s quite a blanket statement. If you’re talking about a wealthy homeowner and a struggling yungerman in the basement I can here that, but more often than not the landlord has as much financial need as the tenant downstairs, and often even more. There can also be other factors.

What about the increasingly common scenario where the tenant is a dual-working couple while the landlord is still in Kollel trying to marry off children?

[jye]

This is not what anyone was quoted as saying.

I personally heard that from R' Forscheimer, R' Felder, & R Kahan.
Although, they are all recommending a psharah.

Correct. Several years back I spoke to one of them and he felt the minhag was to limit to 5% even those apartments that the state exempted from rent control. I heard the same in the name of another back then. That has now changed and they feel that the landlord of an owner occupied or otherwise exempted apartment is entitled to raise to market absent a lease that has other terms, but are suggesting that landlords make peshara.

[jye]

What about the increasingly common scenario where the tenant is a dual-working couple while the landlord is still in Kollel trying to marry off children?

Very common. Although often the tenant is still in school or just starting out in the workforce. Still, a landlord who was charging a little more than half the going rent to a tenant who is toraso umnaso may feel different when that tenant has now gone to work, even if he isn’t yet bringing in a hefty salary.

[aygart]

I never quite understood this position.
Is a landlord only allowed to charge rent relative to his mortgage+taxes+insurance+maintenance?
What happens after a mortgage is paid off & the landlord is left with just taxes+insurance+maintenance - is he expected to charge less rent?
Also, why isn't rental income just another stream of income and with the landlord's tuitions etc. going up he needs more income?

Even more, what happens when the rental market goes down?

[jye]

But then it wasn't covering it originally either.

It was closer. Insurance has almost doubled along with replacement value of the home in many cases. Taxes have gone up. So has maintenance. 4 years back it was a 130 service call plus $80 to recharge my 2 ac units. This year a $200 service charge plus $300 for the Freon…

[ae123]

Even more, what happens when the rental market goes down?

Good point.
I doubt tenants will voluntarily be willing to meet somewhere in the middle, as landlords are being asked to now.

[ae123]

It was closer. Insurance has almost doubled along with replacement value of the home in many cases. Taxes have gone up. So has maintenance. 4 years back it was a 130 service call plus $80 to recharge my 2 ac units. This year a $200 service charge plus $300 for the Freon…

Wow. I didn't realize the extent of it.

[aygart]

It was closer. Insurance has almost doubled along with replacement value of the home in many cases. Taxes have gone up. So has maintenance. 4 years back it was a 130 service call plus $80 to recharge my 2 ac units. This year a $200 service charge plus $300 for the Freon…

Considering that taxes are the vast majority of the listed expenses and they are limited to a 2% annual increase the excuse of higher expenses is a bunch of bunk.

[aygart]

Good point.
I doubt tenants will voluntarily be willing to meet somewhere in the middle, as landlords are being asked to now.

That was fairly common a few years ago when rents were dropping.

[jye]

Considering that taxes are the vast majority of the listed expenses and they are limited to a 2% annual increase the excuse of higher expenses is a bunch of bunk.

That’s still $1300 over 4 years on a house assessed at 16k. And when the next reassessment takes place, which is likely to be quite soon (the house down the block that just sold for 1.5 is assessed at 570k) many homes will face hefty increases despite the cap.

[aygart]

That’s still $1300 over 4 years on a house assessed at 16k. And when the next reassessment takes place, which is likely to be quite soon (the house down the block that just sold for 1.5 is assessed at 570k) many homes will face hefty increases despite the cap.

A $1300 raise is $108 per month and that is over 4 years.

You don't seem to understand how tax assessments work. If there is a reassessment on the entire town the dollar amount does not change much for most houses and many will down even

[Euclid]

You don't seem to understand how tax assessments work. If there is a reassessment on the entire town the dollar amount does not change much for most houses and many will down even

Can you explain why it won't change significantly if a house was initially assessed at 500k and is reassessed at 1MM (using round numbers for example)?

[aygart]

Can you explain why it won't change significantly if a house was initially assessed at 500k and is reassessed at 1MM (using round numbers for example)?

Because the entire town goes up. The taxes are levied as a total dollar amount on the township and the tax collector then divides it up by assessed value. If all houses double then taxes remain exactly the same. The purpose of a reassessment is to even out the values from the disparities that crept in. Even a house getting assessed now is supposed to be based on the value at the last reassessment IIRC.

[Euclid]

Because the entire town goes up. The taxes are levied as a total dollar amount on the township and the tax collector then divides it up by assessed value. If all houses double then taxes remain exactly the same. The purpose of a reassessment is to even out the values from the disparities that crept in. Even a house getting assessed now is supposed to be based on the value at the last reassessment IIRC.

Aha - thanks.

What is the 2% cap? Is it on the total dollar amount levied on the township (i.e. it can't be raised more than 2%/year)? Or is it on the individual property - i.e. I can't pay more than 2% of my property's assessed value?

[aygart]

Aha - thanks.

What is the 2% cap? Is it on the total dollar amount levied on the township (i.e. it can't be raised more than 2%/year)? Or is it on the individual property - i.e. I can't pay more than 2% of my property's assessed value?

on the levy.