Rent increase: is this normal?

In My Humble Opinion (IMHO)
1

A little background to illustrate my experiences:

When I was in my early twenties I moved in and out of various apartments, and my parents’ house, on an almost regular basis. The longest I stayed anywhere was six months. After getting promoted to General Manager of the restaurant I worked for, I rented an apartment by myself and stayed there for more than seven years. This was at a large complex - 200 or 300 units - but my rent was always month-to-month; AFAIK they didn’t even offer leases. Also AFAIK, this complex was privately owned.

When I moved in in 1997, I paid $925 a month. In early 2000 they raised my rent to $1040. A year or so later, I happened to be in the office and noticed they were renting out my same apartment for $995. I mentioned this to the manager, and she immediately lowered my rent to that rate, where it stayed until I moved out in 2005.

Over the next couple of years I again moved a few times, until I wound up in my present apartment in February 2007. I’m again in a largish complex of 200 or 300 units, but this one is owned by a nationwide corporation, Equity Residential. I signed a 12-month lease at $595 a month. After the first year was up, they raised my rent to $667, and as I recall this amount was $25 or $30 more than what they advertised my same apartment for. I didn’t feel like it was worth fighting, so I went with it. In '09, with the economy in the tank, my rent did not increase; this year, it wouldn’t have increased, except that I thought I would be moving in August so I took a six-month lease instead, so since February I’ve paid $700.

Which brings me to the present… my lease is again up in a month, but now I won’t be moving - in fact, I’ll be here for at least two more years. I got my renewal notice yesterday - for 12 months my rent will now be $714. I looked up my apartment on the company website, and they list it at $670. I’m not sure a $14 or $44 difference (depending on how you look at it) is worth fighting, but I plan to mention it, just to see if they’ll knock it down at all.

I haven’t had a real rent increase in two and a half years, so I’m not particularly upset about that; my time has come, I suppose. But I don’t see where they get off charging me more than they would to a new tenant - it doesn’t seem right, or logical. It smacks of “since you’re a preferred customer, and you’ve lived here for three and a half years, have we got a deal for you! You’ll pay just $50 more than everyone else!” Or going into my favorite restaurant that I’ve gone to several times a week for years, having the manager greet me by name, then tell me the prime rib goes for $29.99 - “but for you, my friend, $39.99!”

Now, I know the management of my apartment complex doesn’t give a rat’s ass who they rent my apartment to, be it me or someone else. My guess is that they’re playing this game, raising the rent just enough to make it not really worth fighting, hoping the tenant will just pay it. Which is what I’ll wind up doing - it’s not worth the hassle of moving over this amount.

So, is this the normal practice in apartment complexes? Was I blessed with my first long-term apartment? What are your experiences?

2

I have no idea if this is typical or not, but the hell if I would put up with it. Why couldn’t you just not renew your lease and then sign at the new rate?

3

I’m surprised they don’t send you early renewal notices asking you to renew by date X to avoid a rent increase. I lived in an apartment complex from 2002-2004, and never once was my rent increased. I do know they were renting the same units for more than what I was paying after the first year, but people who already lived there (like me) had their rents locked the same as the year they started renting.

Same thing with the current place I live. I’ve lived here for 2 years now, and plan to live here for other two, and my rent will be the same at least through 2011.

4

(renter since 1993)

Rent increases are normal. In Chicago, it’s capped to 6% per year, and the only way I’ve been able to get around it is when a management company agrees to a 2-year lease. The advertised rent is a “move-in” rate designed to get renters in, but once they’re in the rent can increase at every lease renewal. Sometimes a yearly increase is still built into a 2-year or longer lease anyway.

You were very, very, lucky with your earlier experience!

It’s not a bad idea to challenge it, though. If you’re a good tenant, they’ll still want to keep you and if the don’t waive the increase, they might at least give you a smaller one. I’ve had that work in the past, as well. Me being female, sometimes tears do the trick… YMMV!

5

But the one thing they don’t want is to let remain vacant. That’s what you bring to the table: you are an extant and reliable tenant versus the unknown new tenant, who by the way, may not materialize until after the place has been empty for a month or two or longer.

In other words, you are more valuable to them than a new tenant. And that means your rent should be lower than that offered to a new tenant. Certainly not higher.

Is it worth fighting? Have you ever bargained before? I suspect not, because, candidly, you seem terrible at it. Forgive my saying so, but Americans seem to have some kind of low frustration tolerance problem that prevents them from even raising the issue. I mean, fer chrissakes, the last time you did this, your landlord instantly capitulated!

Now, that might not happen here. The new landlord might hem and haw. You might have to say you’re ready to walk away—you’ll be some other landlord’s $670 new tenant if your current landlord is unwilling to give you that rate. I suppose it’s even possible your landlord will say something like “You stupid fuckchop, absolutely not!” (this probably won’t happen). Does avoiding any of these catastrophic frustrations strike you as worth paying an extra $50 a month? It does not strike me as worth it.

Get a book or two on negotiation (Herb Cohen’s You Can Negotiate Anything is a good informal start; the Harvard Negotiation Project’s Getting to Yes and Getting Past No are also routinely recommended). This is a life skill that everybody needs to develop.

6

Figure it’ll cost them a few hundred to clean and repaint if you move out, so they may as well just lower your rent.

7

I can’t give you too many specifics since I don’t know your market, submarket or property but this is just from my own work experience.

EQR’s rent system is actually pretty sophisticated. I think they still use LRO. Basically, the system determines how many units are supposed to be leased at any one time and adjusts the pricing accordingly. Say an average is two new leases per day and for the last couple of days they only got one new lease. The system will cut the pricing back a bit. And if leasing is ahead of pace, it bumps the rents up a little bit. The whole thing is more complex than that, but you get the point.

Even without the computer system the principle is the same. If you came in for a renewal and I tell you its $100 more this year and you tell me to go fuck myself, the next guy in the door might get a $50 increase. If on the other hand, you go ahead and pay my increase, then the next guy in the door will get a $110 increase. I’ll keep bumping rents until someone tells me that they are leaving. So if you don’t like the increase tell them you won’t sign a renewal yet. Come back later and see if they have something better. The leasing manager has some latitude to work with you. Although, sometimes I might actually hand you that big rent increase so that you do leave. Then I can go in and renovate the unit and maybe grab and extra $200 a month.

As far as whats on the website, forget about it. That’s the cheapest unit I have on offer. If the website says $700 a month, that $700 unit is in the back of the complex, on the ground floor facing the dumpster. They’re probably giving a month or two free in addition to the cheap rent to lease that dog.

On the other hand, a pool view might mean an extra $25. A balcony could get you $50. Back in the day, we owned a complex with a large immigrant community. We were able to nab $25 extra for a south facing unit. Why? Because you needed the south face to get DirectTV and watch programming from the homeland.

LRO will try and determine which units are the most desirable and jack up the rents for those and lower the rents on units that are tougher to rent. Demand changes constantly. If I get a rush of older renters who want lower floors, the pricing for those will increase while pricing for upper floors comes in a bit.

8

Thanks for that, that’s interesting. I was wondering why my place on the 3rd floor was cheaper than the same 2nd floor unit - even though mine has a better view, cross breeze, and light. But it is a higher floor in a walk-up. Maybe that’s it, just because it’s 48 steps up instead of 32? That made for a $70 cut in rent!

9

Why “blessed”? As far as I can tell, that one tried the same stunt, but there you fought it and here you haven’t.

I have never rented in the US long enough to deal with rent increases, so no help there.

10

I used to always rent and in my experience the rent would be increased every year. In 2002 when I bought this house I got a mortgage for less than I was renting a smaller unit for. At the time I was paying close to 1600 a month for rent.

11

In my experience, it was not unusual for apartment complexes to offer incentives to new tenants. It seemed like the more usual approach though was for them to have the official rent be one thing and then off so much off a month or a free month or such. Then when renewal time came the rent was effectively raised by the incentive expiring.

It seems like it is a pretty common practice in other areas besides leasing. You see cable companies, etc, offering special deals to new customers all the time.

12

This has been my experience, mostly. Rent increases are normal, but most places will offer you to re-sign a lease early in order to keep your current rent - and then they know someone will be renting the place for another year at least. Our current apartment also allowed us to sign a 2-year lease since we knew we’d be staying, so you might look into that.

Talk to them about it, they may just keep your rent the same. After we signed our last lease in our current place, they raised the rent on the other apartments quite a bit, and got screwed - nobody rented them at the new price, and our building has been half empty for almost a year now. They’ve dropped the rent back down for this year.

13

Where are you located? In rural or suburban towns you could probably negotiate the rent with your landlord. In San Fransisco or New York City your landlord will laugh at you for even asking. It completely depends on what part of the country you live in and how many people are looking for a new place to rent.

It also depends on your other options as well. If your rent has gone up $44 a month and it would cost you $600 to move from your current place to a new apartment at the same lower rent as your building has currently it would cost you more to leave that it would to stay.

14

Unless he’s hiring movers, it’s not going to cost him $600 to move. A U-Haul is $60 for two days, and his deposits might come to $300.

To the OP: go and tell them you want the advertised rate. If they say no, tell them you’re not renewing. Easy peasy.

15

To clarify, I didn’t fight it. I went into the office to pick up a package or something, and while I was at the desk I noticed the sign advertising my apartment for less than what I was paying. Without thinking about it, I said something like “huh - I pay more than that.” And the manager said “You do? Let’s change that.” It’s not like I went in there trying to get a rent reduction; it practically happened before I knew what was going on.

In seven and a half years I had one rent increase and one decrease. At the end of my time there I was paying $70 more per month than when I moved in. I didn’t mention this in my OP, but I got 100% of my deposit back when I left, when I didn’t feel I’d cleaned the place as well as I could have.

So my point was, that being my only experience (at that time) with being in an apartment for multiple years, I figured my experience was the norm. Now I’m thinking I was lucky.

16

A suburb of Portland, OR. The funny thing is, my seven-year apartment was in the Bay Area - in Fremont, right off of 880 (one of the most heavily traveled freeways in the Bay Area), which was kind of an in-demand location.

It’s just not worth the hassle of packing up all of my shit and moving for an increase of $14 a month. Or, had I taken the year-long lease back in February, I’d still be paying $667, and my rent wouldn’t be going up now; but that’s a decision I made. If I could save $100 a month I’d do it, but for the $44 above what they advertise… moving sucks. Really sucks.

I’ll be going in today or tomorrow to resign, and I’m definitely going to mention this. But I’m not going to make a huge deal out of it, it’s not worth the headache.

17

You really need to negotiate. We just rented out a new place and got them to lower the rent by 50.00 and throw in basic cable and lawncare. Rent increases are normal, but you have a unique position in that you KNOW that a similar unit is going for less. Make them give you that price. Hell in the current home we are in they tried to get us to pay for professional steam cleaning of the carpets as part of the move out procedures. THEY have to do that. So basically they were going to try and mump a free carpet cleaning off me. I told them that we kept everything clean and had a carpet cleaning machine of our own. They immediately capitulated. Be firm. 50 bucks a month is 600.00 a year! that’s new flat screen dammit!

18

In MD, Real Estate law requires all leases to include an option to sign for a 2-year period instead of a 1-year term.

Specific to each county, counties publish a “chart” each year that state what percentage of rent increases are allowed, based on the inflation level for the prior year and other stuff that I don’t understand.

Rent increases have not been the norm IME. I try to be a good tenant and don’t piss off the landlords. The place I live in now (for the past eight years) has not had an increase in the last six years. I’m cool with my landlord, and she’s cool with me. :slight_smile: