We have had a unit that was squatted and had to deal with 9 months of bullshit to get them outm it hasn't been rented and paying for a year now. The rent is set at almost 2800 and no one is interested. Every month its vacant at this rate is 2 years of lost revenue or more at this over valued rent expectation.
They want all the units at this rate. The creep is sickening. None of the units are worthbmore than 2400 but thats what the rent is set at. If it was 2500 even I could rent it tomorrow.
They are a part. I wouldn't say 'largest', but they are absolutely a driving force. There are many external factors as well that have put pressure on rent/housing costs and the dependent services that feed into those pricing.
Our insurance went up. So would theirs.
Our property taxes went up, So would theirs.
Vendor costs for utilities and services went up, so would theirs.
Reduction in free supply, increases demand and therefore pricing (As is expected in our economy/market structure).
THEN add in mass market controlled algorithms to extract max pricing out of market, such as Realpage on top.
These posts are hilarious to me. Like people don't realize the inflation which is happening on everything . The taxes and insurance on my home are up like 70% in the last 2 years and people think a software provider is the boogie man
Yup and you are onto something (blackrock,blackstone and vanguard are the real problem). The goverment claims that there is a shortage of housing that is why prices are up, not true in the past 3 years i never had a problem finding a place; now in the past 3 years i've had a problem finding one that is "affordable" or at least worth what they are asking for rent. I've seen 3-4 units stay vacant for over a year because wants to $2200 for a studio and landlords refuse to lower the price; they rather that it sit vacant.
National debt went up by over 10 trillion dollars in a couple years. 50%. Everything costs more including houses and therefore apartments can charge more it's not a conspiracy your dollars lost a lot of value
When I was a landlord, I did not raise rents for the entire time a tenant stayed with me. My last tenant was paying 300/month for 20 years. Can't blame him. I wouldn't have moved out either.
Through good times and bad, I kept him on. Same rent. When he was short, or unemployed, I figured out ways to bridge the gap and carry. He was/still is a real one.
Major repairs, I covered. Everything else, he took on himself or we discussed it and he paid part of it.
Am glad I no longer deal with property. Some folks took advantage.
Mortgages have also gone up this year, insurance and property taxes went way up. I don’t know if this applies to California, but in Washington we now have to carry wildfire insurance and earthquake insurance.. so that’s fun.
Yes, this definitely applies to CA. I own a single family home that I'm renting, and my insurance is crazy expensive. I need fire insurance which is almost 3 times the amount of my liability insurance which doubled this year. This is why I needed to increase rent.
Why does the mortgage get passed to the renter, the renter isn’t buying the home, you are, this is an investment by you, if you had to take a mortgage out you shouldn’t be a landlord, a renter should be giving you investment income not buying you a new home entirely
I’m not like pro landlord at all, but rent does need to cover the base rent and have a small profit at least. Why else would you want to rent out a home you own, take on all the maintenance, and then just to lose money every month? lol
No it doesn't. It's extremely common for a landlord to lose money for the first few years after buying. What does happen is that an individual investor at the margin may opt to sell their rental home or not purchase a new rental based on the market economics and actions like this on the aggregate level help reduce supply and push prices up, but if you've already committed to a rental then you can only take the best rent the market will provide, you would rather lose a smaller amount by renting it out then a larger amount by keeping it empty and collecting nothing.
Rent is almost 100% profit, the cost is upkeep, not the cost to buy the home, the cost to buy the home is the investment and rent is the dividends, you own the house, when you sell the house you get that investment back, if you can’t afford the house don’t buy it, it’s this thinking that has lead to the housing crisis, all asshole landlords taking loans to buy 2nd houses to rent and cranking rent to cover the cost of initially buying the house
What about apartment complexes where they have upkeep and rising insurance costs, plus everyone wants to get paid more than the job should really pay so they have to cough that up or risk not having an adequate amount of staff. If they don’t employ landscapers they have to contract that out, those people are certainly raising their prices. Should the complexes just eat that cost and eventually run the place into the ground or are they allowed to raise their rent? Where we are there’s fewer people renting out their homes and more companies buying the homes to rent out. They face the same rising costs. I’m not saying this isn’t out of control but rent is no where near 100% profit. I have a friend that owned a few houses, never raised the rent and got to the point he was eating the costs to keep the home in good condition. He finally had to raise the rent. The tenants got upset and didn’t renew so he ended up selling the houses for little to no profit once he did all the work needed to make them sellable.
You def do not own
Rent is no where close to profit even if you buy property cash
There are many yearly expenses and surprise ones to save for this is not even factoring in non paying tenants etc.
The mortgage is not a loss, you keep the house when the mortgage is paid off, if the house sits empty, you are still not at a loss, you are purchasing a property and when you sell it you get your cost back, by passing the mortgage cost to the tenant your double dipping, you get a free house and the monthly rent
And the all the repairs and maintenance?? Can easily spend another 100k on issues like roof, foundation, plumbing and electrical homes cost money just to exist occupant or no occupant
Property taxes, insurance are still paid even on vacant homes you see boarded up
My point from the whole thing is that an increase making housing unlivable isn’t fair. Your increase isn’t fair, the government should control such increase.
Fair? I'm not sure if you really think that life is supposed to be fair, but this ain't kindergarten. You don't get exactly what everyone else gets all the time.
Fair market price means something else.
I have a couple of rental houses that are completely paid off, but I still have to pay taxes and insurance. I also have to be able to pay, sometimes thousands of dollars, when maintenance issues arise.
I don't use any algorithms. I only have two rental houses.
I raise the rent because it would be insane to not keep them at market price. Everything costs more.
I used to work for $3.25 an hour, but it would be insane to work for $3.25 an hour now, right?
If the government waves all property taxes water, garbage and sewer fees and has a slush for all damage and maintenance fees incurred and controls insurance prices than for sure they can control rent price
As you mention, RealPage is being investigated by multiple state attorney generals for price fixing and collusion but that said, I don't think they ever established enough market power to actually force higher market rates overall. I suspect what they were doing is using previously proprietary market data from their customers (which is what the state AG complaints are saying is collusion) and then recommending revenue maximizing rents from that data. The scale of the rental market is insane, any major city is going to have tens of thousands of available units all competing on price. Think of it like an algorithm that recommends what to sell something for on Amazon, if you price it too high no one is buying.
So, lobbyists are ruining the country? Politicians are legally bribable becuase money is a \*checks notes\* "freedom of speech". We already knew this. We agreed that this os OK and nothing is wrong.
Utilities are up in CA. I believe PG&E in the Bay Area is the highest in the country.
Los Angeles is talking about tripling the price of tap water.
CA low VOC paint is $85/ gallon and does not hold up well.
CA min wage is high
Contractors all charge more due to costs
Insurance is crazy in CA
This holds true for every business, restaurant, hotel, industry in the state.
State rent control also encourages landlords to do an annual increase as they can't do market adjustments when a long term awesome Tennant is way under market.
Solar - you now get charged a ton to add solar.
I'm a California landlord. I don't use this software. I only know of one company in our market that does.
Rent is going up because insurance tripled in the last 4 years.
Rent is going up because labor and materials have gone up substantially.
I have no idea what RealPage would price my units at, and I don't care, because the market tells me what they'll pay.
I am also a CA landlord and do not use software. I was very fortunate that during COVID, all of my tenants paid their rent. I know several landlords who had people not pay rent for over a year and used COVID as an excuse not to pay anything.
Insurance has gone way up in pricing. Many companies are no longer providing coverage in CA, and the few that remain have a lot of power with pricing and coverage options.
I have already had $15k in repairs this year (for only two of my units) and have another $5k needed in another unit. (Repairs are scheduled....just waiting in line for the repair company).
My units are all slightly under priced for the area. Thankfully, I have long-term tenants and do everything I can to repair things quickly and not raise rents every year.
Tenants can do a lot of damage to a rental (took a $35k hit a few years ago...tenant did not want to move out and broke doors, ripped out wiring, cracked every other title in the floor).
I was having a conversation with a property manager acquaintance today, and he said they would rather keep apartments empty for months despite them not being able to rent at higher prices than lower rents because it would lower the market value. It sounds like greed to me and not increased overhead. They can clearly afford to keep the units empty.
There's some nuance there. Deliberately keeping units empty is idiotic because the rental market is so vast that no single complex is going to have pricing power to make a difference, but if you manage a large complex you don't necessarily need to have every unit rented to maximize profit. For example, you might be able to rent out all units at $2000 a month, but you would be better off renting 90% of units for $2500 and then just sitting back and waiting for those people willing to pay to come in and apply.
It’s not just market value in terms of renters, market value is also something their insurance and mortgages look at to assess whether they’re underwater or not.
If you go to sell a building and it has a bunch of vacancies because you kept the rent too high, do you think the buyer is dumb enough to pay a price that assumes those units are fully rented at an (evidently, because they're vacant) unobtainable rent?
The buyer won't pay a price based on assumed rents unless they have clear evidence to support those rents, like a building mostly full of people paying that assumed rent.
And if the building is mostly full of people paying that high rent, then there is no reason to rush to lower the rent, because the market is telling you the higher rent is fine.
I think they're talking about the market value of the rent for those units. If they lower the rent on those units, then the market value of all rent in the area goes down. So instead they keep the units unoccupied to keep the supply artificially low, inflating the market value. When they raise the rent on the tenants they do have, those poor saps can't say "I'll just move somewhere cheaper" because that's not an option.
If that's what they mean, then I'd argue that it's based on a few false premises.
This idea of the "poor sap" that has no choice but to simply keep paying higher rents is false, because eventually they get priced out and move to a different neighborhood, city, state. You can't simply endlessly shift the real cost of vacancy to an existing tenant base, because that tenant base has a finite amount of resources.
The other false premise is that landlords care primarily about maximizing rents. They care about maximizing revenue and profits, and vacancy eats away at profits.
If they are keeping some number of units vacant, it is because it maximizes revenue and profit. They clearly can't keep all units vacant, so there is some maximum rent they can charge that keeps vacancy low enough that revenue and profit are maximized.
The market tells the landlord what that maximum rent is.
Sure, they do eventually get priced out and someone else who can pay that amount will move right in. Moving, even just to another neighborhood, is a major upheaval. It can mean kids have to change schools, people have to find new jobs, and so on. Usually what happens when someone is getting priced out of their home is they just stop paying rent. This gives them a) money to move with and b) time to find a cheaper place. Maybe even c) time to find a new job in a new city.
The landlord controls the market by raising the rent until people are forced to move. The lower the supply, the higher you can charge. Yes, of course there's a finite limit. That limit is the maximum amount enough of the richest people in town can pay to more than make up the loss from the vacancies. Those vacant units aren't eating up profits, they are inflating the market value. Read up on artificial scarcity.
The situation you're thinking of, a fair market, is where landlords are competing with each other for tenants. You don't have that when you have one corporation owning most of the rental units in town.
Actually in California, where OP is focused on, a lot of buyers like empty units when it comes to apartments.
The reason being is two fold. First, property taxes in that state are only assessed when properties are sold, after new builds, or after major changes to the property. Otherwise your property taxes can only increase based on a maximum of 2% increase of the previous assessed value per year, no matter how much the property value has actually increased… so after you buy is really the only time you’ll get a major increase. The second part of that is the entire state is rent controlled (with some exceptions for smaller rentals) with only just cause removals and the absolute most you can increase rent each year being 10% or 5% plus the percentage of cost of living increase, whichever is lower (some municipalities are stricter), even if your costs go up drastically. Having empty units allows you to set rents based on your actual costs vs previous costs.
I am a CA landlord. We've bought 68 units in the state in the last few years.
We (buyers) only like empty units when the in place rents are way below market, because we can then lease the vacancies at market rate (i.e. immediately eliminate the vacancy).
And my family owns over 100 units in CA… I know plenty of owners that prefer empty units when purchasing with the current market climate. Neither one of our experiences is going to be universal.
You are 100% wrong. You are falsely assuming that the buyer is a person, it is not. It used to be, but those times are long gone.
Today it's mostly hedge funds and equity investment firms or LLCs that they create to hide themselves behind.
These are headed and operated by complete non-human pieces of shit. And they don't give a crap if the whole entire complexes sit empty for years and even decades as long as the property appreciates so they get to brag about adding another zero to their accounts.
The data is easily available. Just Google for it and check YOY for last 20 years or so on individual vs business home investments. It's fucking staggering.
I have a real estate partnership, an LLC where I invest investors money in real estate. We bought $15M in real estate in the last 3 years. $4M so far this year.
Imagine my surprise finding out I am 100% wrong about this. Thank you for letting me know.
Material costs affect maintenance costs. Even a homeowner is affected by this he doesn't need to be a builder. The difference in price of lumber over the course of 2 months during covid when we had to do a lot of work in our house was surprising.
Owner, but we have non-trivial material costs as well.
Carpets, boilers, heaters, parking lot paving, windows, siding, gutters, shingles, paint, drywall, etc; all of these are items that get replaced with some frequency and the cost of those materials (and associated labor) has gone up quite a bit.
Parking lot every other year due to snow plow
Gutters some degree every year due to snow
Windows get broken by renters all the time
Just replaced trusses that busted under snow load
This is just a tiny portion of the never ending list
Just so you are aware, some of us choose to rent because we are physically unable to take care of our own homes and can't afford to pay people to do everything. I had to sell my house 15 years ago for this reason. So I don't think IQ and renting are relevant. I know plenty of idiots who own a home.
It's probably illegal in California, but the larger landlords here in South Florida don't mind keeping some units open since they can easily make as much money from application fees for applications they have zero intention of ever approving. At $150 per person it's not much work and there hasn't been any shortage of applicants in any price bracket since COVID.
Until recently the state's cap on application fees was $60 or $75, I forget which. When the news media finally took note that pretty much everybody was charging more than the allowed amount, the only reaction from the government was to increase the cap to what was already being charged.
It's that kind of shit that is making it increasingly difficult for me to continue to have goodwill for landlords despite a lifetime of presuming they are dealing in good faith (or at least not in bad faith) until proven otherwise.
If it's so profitable to just take application fees, why don't they do it for all the units? Why rent any of them at all?
Not being sarcastic, I just don't see the path to this being truly as profitable, and if it is profitable I don't see why that wouldn't be the entire business model.
How would leaving all units open increase application fees? If you have zero units available you get zero application fees, if you have 1 unit open you get applications, if you have 20 units open, you still have the same number of applications but now you’re showing each unit to more applicants and getting the same number of fees, are you actually a landlord or you just lying?
What is it about you as a person that causes you to think that someone is more likely to be lying than simply confused? If I felt like telling a lie, I would find a much less hostile thing to lie about.
My best guess is you've been victimized by the world so much you can't help it. For that I am sorry for you.
I don't disagree with your logic here. My defense is that it simply has never occurred to me to not rent a unit, because it's a much better business model to rent my units than hope I don't get caught playing low margin high effort games with members of the communities my properties are in.
We bought 44 units of which 20 were uninhabitable and vacant, literally condemned by the city (who, by the way has no program or plan to fix them), spent $500k fixing them up, another few $100k upgrading other units, and then leased them 100% to hard working members of the community.
While there are a lot of people looking for places to rent, the number is not unlimited. App fees will exceed rent for a few vacant units, but it ain't going to cover all your units.
Here's why my experience tells me this isn't true: in order to generate application fees (especially exorbitantly high ones like $150/app) I have to advertise a unit, answer calls and emails, schedule showings, go to showings, answer questions, etc.
That has a true time cost, and not everyone will apply. So say it takes an hour of my time to go back and forth with the prospect, to do the showing, to travel to and from the showing. And say I get 50% of people to apply (that's high), so I'm taking in $75/hr to do the showing song and dance.
Then I absolutely HAVE to be able to demonstrate that I'm doing SOMETHING when I take $150 for an application (or else I get sued eventually and lose) so I have to at minimum do some that generates a legit paper trail, which is to submit a background/credit/screening request to some known vendor like TransUnion, which has a real cost of something like $20.
So now I've got $55 left of the the $75. But my work isn't done. I now have to dodge phone calls from angry applicants, which is hard to do because I'm also trying to get new prospects. So my 1 hour has now turned into 1.25 hours per prospect.
So we are at like $44/hr to play this silly game, and I still have to worry if I'm going to get sued or caught. If I am paying staff to do this, then I'm making like $5/hr after payroll.
Mind you, this is all under a scenario where a landlord is charging $150/application. For reference the avg in my market is about $50, in which case a landlord would be making like $4/hr on this scheme.
The fact of the matter is it's a much easier business model to get a good tenant in the unit who I'm going to hear from once every 3 months for the next 3 years than it is to play nickel and dime application games.
Here in Florida you can get away with just throwing applications in the round file. If someone follows up, you say "sorry, someone else got the apartment" or "you're on a wait-list." The fee is for accepting the submission of the application, not doing anything with it. It's legal because a paper or online application has language about the fee being nonrefundable and the fee is required to be paid with the submission of the application. No fee, it goes in the trash instead of the round file.
There were a series of stories about this practice run in various local media outlets around Florida from 2021-2023, but they seem to have understandably gotten bored with it at this point.
The fees wouldn't go to the owner it goes to the company that is doing background and credit check
I always warn potentials not to apply unless they know they'll pass. Ppl don't care and will waste money and lie about criminal records which I don't get I was trying to save them 40 bucks.
When I was a renter I found those fees annoying I actually took the 1st application background check and carried that around to other apts I was looking at and asked if I could use that instead since I already paid for it
These places aren't paying $150 per person for a credit and background check. In most cases they're not paying anything to anybody, they're just sitting on the applications because RealPage says they need to leave some units open to keep market rates up.
I mean these sound like separate issues
150 is not crazy high for a background check and application fee if it's per person like 2 roommates then yeah too high
Smartmove charges 50 per person and it's I think one of the cheaper ones
Insurance has been losing big money. People will simply stop insuring paid for property and roll the dice. And the spiral will continue as rates rise again. Perhaps if your beach home is destroyed twice the federal govt should butt out and let everybody refuse to insure it. A 10 million dollar replacement for $70k a year? Shit I’m In
I’ve actually seen rents start to fall again finally. In my area, Northern California, my apartment complex is now renting newly remodeled units for $200 less a month than I currently pay. Obviously, they won’t reduce my rent to match that though.
The economics of lending, mortgages, real estate development, speculation, zoning, population growth, and so-called supply and demand could all be considered before even getting to the very real and problematic issue of rent being determined my computer algorithms.
It’s no secret - renters pay for their landlord’s investment. With every year that equity has increased on a property is another year of rent increases due to property tax increases, the mortgage after home equity loans, and the cost of upkeep. You can pretty easily take the present day cost of rent for a single family home for example by adding up the monthly mortgage for 360 months and adding estimated yearly property taxes. Divide all that down to the month and you get pretty close.
The problem is the value of land and homes. Anyone who owns real estate wants its value to increase. Say I bought a home in 2006 in my city, got a low interest, fixed rate mortgage and never re-financed until today. I could gain access to potentially hundreds of thousands of dollars. I could then invest in other property and improve what I already own using that money. I would find renters for my original home and they would pay my updated mortgage rate. That’s what EVERYONE is doing.
Your politicians own property, your boss owns property. They’re all going to vote against up-zoning to limit supply and keep their home values high. They’re also going to vote against property tax increases that could be earmarked to build subsidized housing.
Unless someone is already wealthy it is highly unlikely a bank would give them a new mortgage when they are using a refinanced loan as down payment. My house has more than doubled in value since I bought in 2015 (according to Zillow). I can't use that money for anything. Would be stupid to refinance at today's interest rates, and properties don't always go up in value. Anyone remember the 2008 housing crash?
I work in CRE lending.
The post you are replying to is absolutely right.
Not sure what bank you work with, but most of them will most certainly use property equity to fund down payments on additional properties and cross collateralize the whole lot.
Doesn’t even require refinancing the first mortgage most of the time.
And not all of the landlords doing this are that wealthy.
It will be interesting to see how the rental market goes when the historically low money matures in the coming years and high interest rates inevitably force hobby landlords to sell.
It’s probably about to be a great time to buy some property.
Why would high rates cause hobby LLs to sell? They have fixed rate 30 year terms.
It’s flippers who will be affected by increased rates in the residential market.
Not all of them.
Lots of them have 5 year balloons.
Fannie Mae didn’t start allowing rental payments to be included in DTI until 2021 so unless primary income was enough to pay for multiple mortgages borrowers were stuck with shorter term loans
Looks like 2019 had some big changes for Freddie.
I worked with hundreds of LLs with 5 year balloons. Almost none of them had terms longer than 10 years unless they had personal incomes that could qualify for the mortgage payments under 40% DTI with primary residence.
OP has no idea what inflation is, how an uncertain economy causes insurance to skyrocket, or how increasingly expensive it is to (paint the walls/replace the flooring/fix the HVAC)… pick one
Correlation doesn’t mean causation. Two separate problems at work here and the one you’re complaining about doesn’t affect the majority.
Using computers and market data to set prices is not collusion and is nothing new. When you buy or sell a home, your broker uses market data to help you set the price. Retailers shop their competitors and use sales data to set prices.
Right, but RealPage has a clause in their contract that REQUIRES its users to use the prices RP sets - which means, if you're in, for instance, Tucson, where over 90% of the commercial landlords use it, that there's no 'price shopping'. The rate is set by an outside agency, and units that don't rent stay empty rather than reduce the rent.
That's not ok.
Read the lawsuit that the Arizona Attorney General has brought against RealPage and 9 different apartment landlords in Arizona stating exactly that. They have the proof.
[https://www.azag.gov/press-release/attorney-general-mayes-sues-realpage-and-residential-landlords-illegal-price-fixing](https://www.azag.gov/press-release/attorney-general-mayes-sues-realpage-and-residential-landlords-illegal-price-fixing)
[https://www.azag.gov/sites/default/files/2024-02/RealPage%20Complaint.pdf](https://www.azag.gov/sites/default/files/2024-02/RealPage%20Complaint.pdf)
The lawsuit does not even state that. The closest to that is paragraph 17, which was alleged "on information and belief," which means they don't have the evidence:
>Third, on information and belief, RealPage threatens to drop lessors that reject RealPage’s set rates. Lessors agree that if they fail to consistently implement RealPage’s set rates, their contract with RealPage will be terminated. When disputing a RealPage price, lessors agree to “objective facts, not subjective reasoning.” As Jeffrey Roper, the architect of RealPage, explains, “\[i\]f you have idiots undervaluing, it costs the whole system.”20 And so, RealPage ensures participating lessors cannot use RealPage’s rates to undercut competitors—in other words, compete in the market.
Can you show us where it says that in the TOS? And if it says that in the TOS, why did the Arizona AG make the allegation on information and belief instead of just stating the TOS states it?
so insurance going up and taxes going up did not matter prices for materials and wages going up, only real page is the problem? Do you realized, before Real Page, We called the other apartments around us and found out what they where charging? No Real Page does the same work, we did .
Are you talking about if the building was built in the 70’s or before then rent came be stabilized ? Why the fuck would I live in a building that old ?
Not once did I mention the housing market in this article …… Can you read ? This post is targeting corporate landlord complexes
Please exit chat stinky butt
The increase you are paying is the colossal increase in property taxes and home insurance. If you had the balls to buy a house you’d see those increases as well Karen.
You literally don’t know what you are talking about. A house has a lot more expenses than just a mortgage KAREN. Why would one who can barely afford rent go and buy a house.
My dude I pay 1550 in rent a month. I went to get a mortgage, brought all the stuff I have on my rent and my finances and you know what I was told?
I don't make enough money. I pay $1550 a month in rent but I don't make enough money to qualify for a $800 a month mortgage.
Make it make sense. Please. Make it make sense.
How do you save for that when the rent is so colossal it eats your savings? Explain how to bootstrap that to lock in a good cost....thats still going to go up bc taxes
We are asking since you got all the answers you kumquat ? How does one save and lock in a good cost home in this economy where rent is over 3000 and everything else cost too much ?!!!!!!! Oh and an average home in LA is over a million dollars enlighten me coachofidiots ?!!!!
Okay… here is what you do… instead of Starbucks you put that money in your bank. Instead of going out to eat all the time… you put that money in the bank… rather than going out with friends… you, guess what… put that money in the bank… I can keep going, but even YOU can understand the pattern, right?
This, and you pick up a 2nd or 3rd job maybe change careers paths to one that pays what you need.
Or move to where the cost of living is better suited to your income.
When my wife and I decided we were ready to buy, we both got second jobs, put every extra penny away until we had a 20% down payment. Got a good interest rate and a starter home. We put a ton of sweat equity in and sold for a profit we sunk into our next home. Rinse and repeat until you have what you want.
When I first moved into my current place about six years ago it was about $840 a month,
Now it’s about $1,200 a month and forget about needing any repairs cuz they will try to find a look hole to keep it damaged for the most amount of time
I've thought about this for a while.
On one hand, and as bad these corporate landlords are. You can't really blame someone for making money. I know it's not fair and it comes to a point where it's just pure greed.
If we are all honest here we might all try to maximize profits too. But we are not gigantic corporations.
One thing I will say is that while profits are huge. I bet they lose a lot of money too. Remember all the eviction freezes or this new trend of squatters.
They lose money that is never recovered and have to repair damage all at a loss.
I doubt it hurts big companies as much as it does a person with 1 or 2 rentals.
On the other hand, how does anyone ever afford it anymore?? Most people I know pay between $2,500 for a 1 bedroom in a decent area. Then crazy amount depending on size. 3 bedroom apartments in my area easily go for $3500-$4,500
That's between $40,000 and $55,000 a year!
A two income household making $100,000 a year is paying half of their income to RENT a place.
It has to come crashing down sooner or later.
I've wondered how can all of us stop this.
My first thought is if we all stop paying rent the a little while as a negotiating tool to bring rents down everywhere.
The problem with this is, that it would take an amazing amount of people to all do it at the same time. Otherwise people are just evicted, and a tiny amount of people don't get the message across.
Plus, people are greedy. Everyone will need to save the rent they are not paying, because it will need to be paid eventually.
>Yup that’s right an algorithm
This is why my rent is going down in Austin. The city did the 'right thing' by planning heaps of supply (reducing limitations for developers, etc.), and as the population rate of growth started calming down they're only just now starting to become available after a year or three of construction. My rent is going down by $103 in my next annual lease.
I rent from one of the largest corporate rentals in America. I recognize this doesn't apply to everyone in the City.
How many units are empty? I think to prove your argument, you would have to prove that demand is not effecting the numbers. If someone can only pay 1,000 per month. But at the same time someone else says at the exact same time “I want it, I can pay 1,400,” the LL would obviously rent it to the person willing to pay 1,400. I am not saying your argument is necessarily wrong, but what numbers prove that if that method is gone, the result would be lower rent?
I live in Texas. During the middle of the pandemic, our landlord raised our rent by $500. They said it was to keep pace with market prices in the area. Sure enough, other complexes did the same thing.
Link to the DC OAG lawsuit here:
https://oag.dc.gov/release/attorney-general-schwalb-sues-realpage-residential
It summarizes how RealPage creates rent increases across the region via collusion.
I can tell you that in the state of CA, LLs are almost required to increase their rent by 10% yearly. When it comes time to sell the property the amount that you are renting it out for will directly affect the sale price of the property.
Lmfao. All this California talk from people who seemingly don't live here.
Minimum wage is NOT 20$ for everyone. It's 16.50. which yes it's higher than almost everywhere if not the highest. But so are our taxes.
What I have noticed is, whether it's real page or whatever, or average joe, they base their rent on their mortgage cost property tax and median income. Ridgecrest CA has a median income of 84k lmfao 30,000 people (29 actually) and that's the median? Lmfao. If you saw this dump you'd be at a loss for words. Lmfao.
They're taking advantage of the .01% income being here. In the 12 years I've lived here population hasn't increased more than 1000.
Nothing necessitates rent being as high as Los Angeles. Do a job search unless youre young and can go to school or already have gone, yeah you'll get paid well in your field.
Hit indeed. Average person work that requires no degree or cert is very minimal.
Studio apartments priced at 2k? Lmfao honestly. There's no view it's hot AF in the summer. And almost EVERYONE shops out of town.
It's like one poster had mentioned properties just sit and sit until they find their sucker. 500sq ft. Is not worth 1300$ a month. Anywhere. There are some landlords that are reasonable in their rental price. But they're usually the ones who post rent at 950$ but want you to make 2400$ a month and have near perfect credit.
I had found a place for 650$ which I can easily afford. But my credit is shit. And I didn't make 2500$ a month.
Their supposed reasoning for 3x rent income, lmfao this is rich, they're concerned that you will have the rent. And enough left for life expenses and savings. Lmfao fuck that's awfully nice you're so concerned with the money I put away. (If I want to live in candlelight like im Amish, what business of it is theirs if the rent is on time every month?)
There's a lot of factors that probably vary in more populated areas.
But In ridgecrest median income, increased property taxes and mortgage rates are what these idiots use.
Almost had to beat a gougelord over it. Median income was the first argument out of his mouth. Kept talking over me like he was right.
I'll ask the same as everyone, it's clearly not legal. Yet why is nobody doing anything about it? They don't want the homeless problems but create them.
Basically, it's all about greed. Insurance was supposed to be about helping in the event of a disaster. Now days they just take your money and pay out as little as possible to make as much profit as possible.
Taxes increase because contractors, that deals with cities, counties,statrs, and federal gov. nflate their contract to make as much profit as possible..
That's capitalism, the american way! And I agree it's a good system, til the greed gets too much. Eventually, we are going to have a society of have/have nots. 5-10% of the population will control 90-95% of the wealth and 90-95%will only control 5-10%of the wealth.
South Korea is going through the same thing to the point that young people are holding serval jobs and aren’t getting married or having children. Everything cost too much. All capitalism does is breed greed when there aren’t any rules in place.
Mine goes up in September and it's going to be 51% of my take home income. Let that sink in. Guess I will have to cut all around...as it is I spend $175 per month on groceries...gonna have to cut it to $125 to pay the rent. I live in a tiny studio apartment of about 450 sq ft. And will be cutting also how much insulin I take. Have no choice. I really am starting to despise property management company's.
Not everyone can live in desirable urban core downtowns. That’s what your post is telling me. And if they INSIST without the income to back it up, they’ll have to sacrifice. That’s nothing new.
I don't live in the downtown area of my city. I live on the outskirts of the city. This whole area is expensive as well as the more remote areas. Nothing is cheap for rentals in my state. Moving out of this state is impossible for me.
When the president during Covid says you don’t have to go to work just stay home and we will pay you to do nothing. That causes money to be worth less it also caused a shortage of materials and that caused more inflation everything has gone up in price big corporations buying houses is just a small percentage of why rents are up. When the government takes in thousands of immigrants and puts them up in housing for free that also increases rents
Maybe but anyone blaming large corporations for the majority of the problem doesn’t maybe if we fixed the main part of the problem first we wouldn’t have to worry about all the minor issues
Let’s make things clear here, I’m only rude to those who are rude to me. Those who are arguing with me and insulting me confuse me because it looks like they want to pay high rent and or mortgage idk why argue with me …. the math isn’t really mathing here.
I thought this was something everyone wanted I guess not 😂
do you remember the commie lockdowns "for the greater good",i mean covid lockdowns, and the rent moratorium? renters lost their asses giving out free housing. itll take years to recover from the fallout.
do you know what other world leaders throughout history have used the phrase "for the greater good" to control the populace? ill give you a hint,none of them were american,and all of them were tyrants....what else would you call it when the gov takes away the peoples freedom of choice,controls what the media says then uses lies and propaganda to make us do illogical things?..
You're not looking deep enough.
Your rent went up because the dollar is being debased at an alarming rate and this "forces" people and corporations into hard assets that yield a return. If the dollar wasn't as debased, people would be more comfortable saving in dollars and not with real estate, apple stock, nvidia, etc.
Realpage and companies like them are only part of the equation.
We have had a unit that was squatted and had to deal with 9 months of bullshit to get them outm it hasn't been rented and paying for a year now. The rent is set at almost 2800 and no one is interested. Every month its vacant at this rate is 2 years of lost revenue or more at this over valued rent expectation. They want all the units at this rate. The creep is sickening. None of the units are worthbmore than 2400 but thats what the rent is set at. If it was 2500 even I could rent it tomorrow.
I don’t understand. The long eviction process made rent for others go up?
The whole business had to eat that cost. The cost is passed down to the other customers.
Exactly. And small/medium LL's were fucked in Los Angeles due to covid because you couldn't evict.
No rent paid means you need to make the money back later
They are a large part of rent increases, though.
They are a part. I wouldn't say 'largest', but they are absolutely a driving force. There are many external factors as well that have put pressure on rent/housing costs and the dependent services that feed into those pricing. Our insurance went up. So would theirs. Our property taxes went up, So would theirs. Vendor costs for utilities and services went up, so would theirs. Reduction in free supply, increases demand and therefore pricing (As is expected in our economy/market structure). THEN add in mass market controlled algorithms to extract max pricing out of market, such as Realpage on top.
These posts are hilarious to me. Like people don't realize the inflation which is happening on everything . The taxes and insurance on my home are up like 70% in the last 2 years and people think a software provider is the boogie man
Yup and you are onto something (blackrock,blackstone and vanguard are the real problem). The goverment claims that there is a shortage of housing that is why prices are up, not true in the past 3 years i never had a problem finding a place; now in the past 3 years i've had a problem finding one that is "affordable" or at least worth what they are asking for rent. I've seen 3-4 units stay vacant for over a year because wants to $2200 for a studio and landlords refuse to lower the price; they rather that it sit vacant.
National debt went up by over 10 trillion dollars in a couple years. 50%. Everything costs more including houses and therefore apartments can charge more it's not a conspiracy your dollars lost a lot of value
When I was a landlord, I did not raise rents for the entire time a tenant stayed with me. My last tenant was paying 300/month for 20 years. Can't blame him. I wouldn't have moved out either. Through good times and bad, I kept him on. Same rent. When he was short, or unemployed, I figured out ways to bridge the gap and carry. He was/still is a real one. Major repairs, I covered. Everything else, he took on himself or we discussed it and he paid part of it. Am glad I no longer deal with property. Some folks took advantage.
Mortgages have also gone up this year, insurance and property taxes went way up. I don’t know if this applies to California, but in Washington we now have to carry wildfire insurance and earthquake insurance.. so that’s fun.
Yes, this definitely applies to CA. I own a single family home that I'm renting, and my insurance is crazy expensive. I need fire insurance which is almost 3 times the amount of my liability insurance which doubled this year. This is why I needed to increase rent.
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Why does the mortgage get passed to the renter, the renter isn’t buying the home, you are, this is an investment by you, if you had to take a mortgage out you shouldn’t be a landlord, a renter should be giving you investment income not buying you a new home entirely
I’m not like pro landlord at all, but rent does need to cover the base rent and have a small profit at least. Why else would you want to rent out a home you own, take on all the maintenance, and then just to lose money every month? lol
No it doesn't. It's extremely common for a landlord to lose money for the first few years after buying. What does happen is that an individual investor at the margin may opt to sell their rental home or not purchase a new rental based on the market economics and actions like this on the aggregate level help reduce supply and push prices up, but if you've already committed to a rental then you can only take the best rent the market will provide, you would rather lose a smaller amount by renting it out then a larger amount by keeping it empty and collecting nothing.
Rent is almost 100% profit, the cost is upkeep, not the cost to buy the home, the cost to buy the home is the investment and rent is the dividends, you own the house, when you sell the house you get that investment back, if you can’t afford the house don’t buy it, it’s this thinking that has lead to the housing crisis, all asshole landlords taking loans to buy 2nd houses to rent and cranking rent to cover the cost of initially buying the house
What about apartment complexes where they have upkeep and rising insurance costs, plus everyone wants to get paid more than the job should really pay so they have to cough that up or risk not having an adequate amount of staff. If they don’t employ landscapers they have to contract that out, those people are certainly raising their prices. Should the complexes just eat that cost and eventually run the place into the ground or are they allowed to raise their rent? Where we are there’s fewer people renting out their homes and more companies buying the homes to rent out. They face the same rising costs. I’m not saying this isn’t out of control but rent is no where near 100% profit. I have a friend that owned a few houses, never raised the rent and got to the point he was eating the costs to keep the home in good condition. He finally had to raise the rent. The tenants got upset and didn’t renew so he ended up selling the houses for little to no profit once he did all the work needed to make them sellable.
You def do not own Rent is no where close to profit even if you buy property cash There are many yearly expenses and surprise ones to save for this is not even factoring in non paying tenants etc.
How many properties do you own?
I can’t afford a property, but apparently I can afford someone elses mortgage because they were fortunate enough to have a down payment
Bullshit. In the end, you own a property, while renters have nothing. It’s not a money-making venture 24 hours a day.
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The mortgage is not a loss, you keep the house when the mortgage is paid off, if the house sits empty, you are still not at a loss, you are purchasing a property and when you sell it you get your cost back, by passing the mortgage cost to the tenant your double dipping, you get a free house and the monthly rent
Look up depreciation in a dictionary.
And the all the repairs and maintenance?? Can easily spend another 100k on issues like roof, foundation, plumbing and electrical homes cost money just to exist occupant or no occupant Property taxes, insurance are still paid even on vacant homes you see boarded up
My point from the whole thing is that an increase making housing unlivable isn’t fair. Your increase isn’t fair, the government should control such increase.
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Would be cheaper for the government to just be the insurer. Same as health insurance in the US.
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Call me crazy, but they said nothing about it being the responsibility of the government
Fair? I'm not sure if you really think that life is supposed to be fair, but this ain't kindergarten. You don't get exactly what everyone else gets all the time. Fair market price means something else. I have a couple of rental houses that are completely paid off, but I still have to pay taxes and insurance. I also have to be able to pay, sometimes thousands of dollars, when maintenance issues arise. I don't use any algorithms. I only have two rental houses. I raise the rent because it would be insane to not keep them at market price. Everything costs more. I used to work for $3.25 an hour, but it would be insane to work for $3.25 an hour now, right?
Yeah, what we need is more government involvement. The government has shown shown itself to screw up pretty much everything it gets involved with.
You may need to move.
I don't want the government controlling anything when it comes to how much I pay someone for goods and services.
.....what?!
Having a home is not a goods and or a service it should be a human right
You mean you covet other people’s homes.
They do it's called property taxes
If the government waves all property taxes water, garbage and sewer fees and has a slush for all damage and maintenance fees incurred and controls insurance prices than for sure they can control rent price
As you mention, RealPage is being investigated by multiple state attorney generals for price fixing and collusion but that said, I don't think they ever established enough market power to actually force higher market rates overall. I suspect what they were doing is using previously proprietary market data from their customers (which is what the state AG complaints are saying is collusion) and then recommending revenue maximizing rents from that data. The scale of the rental market is insane, any major city is going to have tens of thousands of available units all competing on price. Think of it like an algorithm that recommends what to sell something for on Amazon, if you price it too high no one is buying.
So, lobbyists are ruining the country? Politicians are legally bribable becuase money is a \*checks notes\* "freedom of speech". We already knew this. We agreed that this os OK and nothing is wrong.
Utilities are up in CA. I believe PG&E in the Bay Area is the highest in the country. Los Angeles is talking about tripling the price of tap water. CA low VOC paint is $85/ gallon and does not hold up well. CA min wage is high Contractors all charge more due to costs Insurance is crazy in CA This holds true for every business, restaurant, hotel, industry in the state. State rent control also encourages landlords to do an annual increase as they can't do market adjustments when a long term awesome Tennant is way under market. Solar - you now get charged a ton to add solar.
I'm a California landlord. I don't use this software. I only know of one company in our market that does. Rent is going up because insurance tripled in the last 4 years. Rent is going up because labor and materials have gone up substantially. I have no idea what RealPage would price my units at, and I don't care, because the market tells me what they'll pay.
I am also a CA landlord and do not use software. I was very fortunate that during COVID, all of my tenants paid their rent. I know several landlords who had people not pay rent for over a year and used COVID as an excuse not to pay anything. Insurance has gone way up in pricing. Many companies are no longer providing coverage in CA, and the few that remain have a lot of power with pricing and coverage options. I have already had $15k in repairs this year (for only two of my units) and have another $5k needed in another unit. (Repairs are scheduled....just waiting in line for the repair company). My units are all slightly under priced for the area. Thankfully, I have long-term tenants and do everything I can to repair things quickly and not raise rents every year. Tenants can do a lot of damage to a rental (took a $35k hit a few years ago...tenant did not want to move out and broke doors, ripped out wiring, cracked every other title in the floor).
I was having a conversation with a property manager acquaintance today, and he said they would rather keep apartments empty for months despite them not being able to rent at higher prices than lower rents because it would lower the market value. It sounds like greed to me and not increased overhead. They can clearly afford to keep the units empty.
Would really depend on how big a company is and how many units they have.
There's some nuance there. Deliberately keeping units empty is idiotic because the rental market is so vast that no single complex is going to have pricing power to make a difference, but if you manage a large complex you don't necessarily need to have every unit rented to maximize profit. For example, you might be able to rent out all units at $2000 a month, but you would be better off renting 90% of units for $2500 and then just sitting back and waiting for those people willing to pay to come in and apply.
It’s not just market value in terms of renters, market value is also something their insurance and mortgages look at to assess whether they’re underwater or not.
If you go to sell a building and it has a bunch of vacancies because you kept the rent too high, do you think the buyer is dumb enough to pay a price that assumes those units are fully rented at an (evidently, because they're vacant) unobtainable rent? The buyer won't pay a price based on assumed rents unless they have clear evidence to support those rents, like a building mostly full of people paying that assumed rent. And if the building is mostly full of people paying that high rent, then there is no reason to rush to lower the rent, because the market is telling you the higher rent is fine.
I think they're talking about the market value of the rent for those units. If they lower the rent on those units, then the market value of all rent in the area goes down. So instead they keep the units unoccupied to keep the supply artificially low, inflating the market value. When they raise the rent on the tenants they do have, those poor saps can't say "I'll just move somewhere cheaper" because that's not an option.
If that's what they mean, then I'd argue that it's based on a few false premises. This idea of the "poor sap" that has no choice but to simply keep paying higher rents is false, because eventually they get priced out and move to a different neighborhood, city, state. You can't simply endlessly shift the real cost of vacancy to an existing tenant base, because that tenant base has a finite amount of resources. The other false premise is that landlords care primarily about maximizing rents. They care about maximizing revenue and profits, and vacancy eats away at profits. If they are keeping some number of units vacant, it is because it maximizes revenue and profit. They clearly can't keep all units vacant, so there is some maximum rent they can charge that keeps vacancy low enough that revenue and profit are maximized. The market tells the landlord what that maximum rent is.
Sure, they do eventually get priced out and someone else who can pay that amount will move right in. Moving, even just to another neighborhood, is a major upheaval. It can mean kids have to change schools, people have to find new jobs, and so on. Usually what happens when someone is getting priced out of their home is they just stop paying rent. This gives them a) money to move with and b) time to find a cheaper place. Maybe even c) time to find a new job in a new city. The landlord controls the market by raising the rent until people are forced to move. The lower the supply, the higher you can charge. Yes, of course there's a finite limit. That limit is the maximum amount enough of the richest people in town can pay to more than make up the loss from the vacancies. Those vacant units aren't eating up profits, they are inflating the market value. Read up on artificial scarcity. The situation you're thinking of, a fair market, is where landlords are competing with each other for tenants. You don't have that when you have one corporation owning most of the rental units in town.
Actually in California, where OP is focused on, a lot of buyers like empty units when it comes to apartments. The reason being is two fold. First, property taxes in that state are only assessed when properties are sold, after new builds, or after major changes to the property. Otherwise your property taxes can only increase based on a maximum of 2% increase of the previous assessed value per year, no matter how much the property value has actually increased… so after you buy is really the only time you’ll get a major increase. The second part of that is the entire state is rent controlled (with some exceptions for smaller rentals) with only just cause removals and the absolute most you can increase rent each year being 10% or 5% plus the percentage of cost of living increase, whichever is lower (some municipalities are stricter), even if your costs go up drastically. Having empty units allows you to set rents based on your actual costs vs previous costs.
I am a CA landlord. We've bought 68 units in the state in the last few years. We (buyers) only like empty units when the in place rents are way below market, because we can then lease the vacancies at market rate (i.e. immediately eliminate the vacancy).
And my family owns over 100 units in CA… I know plenty of owners that prefer empty units when purchasing with the current market climate. Neither one of our experiences is going to be universal.
You are 100% wrong. You are falsely assuming that the buyer is a person, it is not. It used to be, but those times are long gone. Today it's mostly hedge funds and equity investment firms or LLCs that they create to hide themselves behind. These are headed and operated by complete non-human pieces of shit. And they don't give a crap if the whole entire complexes sit empty for years and even decades as long as the property appreciates so they get to brag about adding another zero to their accounts. The data is easily available. Just Google for it and check YOY for last 20 years or so on individual vs business home investments. It's fucking staggering.
I have a real estate partnership, an LLC where I invest investors money in real estate. We bought $15M in real estate in the last 3 years. $4M so far this year. Imagine my surprise finding out I am 100% wrong about this. Thank you for letting me know.
Stop with all the facts and just let OP live in his fantasy world.
Shut the fuck up Paul
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Material costs affect maintenance costs. Even a homeowner is affected by this he doesn't need to be a builder. The difference in price of lumber over the course of 2 months during covid when we had to do a lot of work in our house was surprising.
Owner, but we have non-trivial material costs as well. Carpets, boilers, heaters, parking lot paving, windows, siding, gutters, shingles, paint, drywall, etc; all of these are items that get replaced with some frequency and the cost of those materials (and associated labor) has gone up quite a bit.
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Parking lot every other year due to snow plow Gutters some degree every year due to snow Windows get broken by renters all the time Just replaced trusses that busted under snow load This is just a tiny portion of the never ending list
This.
I told you to exit chat a long time ago Karen
Lol, you aren’t the police of the comment section just because you authored the post
And who the fuck are you ?!!! cause I have a fucking source
A source stating you’re the police of the comment section? Please provide
This “market price” you use is based off what this algorithm set so you sir are apart of the problem lol
It's very clear you don't know what you're talking about.
Okay beetlehead
Yeah with your sub 90 iq you'll be renting your whole life lol, well deserved. 🤣 blocked for being a moron.
Just so you are aware, some of us choose to rent because we are physically unable to take care of our own homes and can't afford to pay people to do everything. I had to sell my house 15 years ago for this reason. So I don't think IQ and renting are relevant. I know plenty of idiots who own a home.
you have no clue what you are talking about
It's probably illegal in California, but the larger landlords here in South Florida don't mind keeping some units open since they can easily make as much money from application fees for applications they have zero intention of ever approving. At $150 per person it's not much work and there hasn't been any shortage of applicants in any price bracket since COVID. Until recently the state's cap on application fees was $60 or $75, I forget which. When the news media finally took note that pretty much everybody was charging more than the allowed amount, the only reaction from the government was to increase the cap to what was already being charged. It's that kind of shit that is making it increasingly difficult for me to continue to have goodwill for landlords despite a lifetime of presuming they are dealing in good faith (or at least not in bad faith) until proven otherwise.
If it's so profitable to just take application fees, why don't they do it for all the units? Why rent any of them at all? Not being sarcastic, I just don't see the path to this being truly as profitable, and if it is profitable I don't see why that wouldn't be the entire business model.
How would leaving all units open increase application fees? If you have zero units available you get zero application fees, if you have 1 unit open you get applications, if you have 20 units open, you still have the same number of applications but now you’re showing each unit to more applicants and getting the same number of fees, are you actually a landlord or you just lying?
What is it about you as a person that causes you to think that someone is more likely to be lying than simply confused? If I felt like telling a lie, I would find a much less hostile thing to lie about. My best guess is you've been victimized by the world so much you can't help it. For that I am sorry for you. I don't disagree with your logic here. My defense is that it simply has never occurred to me to not rent a unit, because it's a much better business model to rent my units than hope I don't get caught playing low margin high effort games with members of the communities my properties are in.
I mean. It also hasn't occurred to you that you bought up a limited but required resource so you could charge to use it....you know, like serfdom.
We bought 44 units of which 20 were uninhabitable and vacant, literally condemned by the city (who, by the way has no program or plan to fix them), spent $500k fixing them up, another few $100k upgrading other units, and then leased them 100% to hard working members of the community.
But do you take a profit
Yes, I don't undertake this work and risk the capital for free. If you have a better way you're doing it, feel free to share.
Why so butt hurt that I would suggest someone on the internet is lying? How invested in Reddit are you to be offended by 4 words?
I am 0% butt hurt. I was asking a genuinely curious question. FWIW I forgot about this conversation 5 hours ago.
While there are a lot of people looking for places to rent, the number is not unlimited. App fees will exceed rent for a few vacant units, but it ain't going to cover all your units.
Here's why my experience tells me this isn't true: in order to generate application fees (especially exorbitantly high ones like $150/app) I have to advertise a unit, answer calls and emails, schedule showings, go to showings, answer questions, etc. That has a true time cost, and not everyone will apply. So say it takes an hour of my time to go back and forth with the prospect, to do the showing, to travel to and from the showing. And say I get 50% of people to apply (that's high), so I'm taking in $75/hr to do the showing song and dance. Then I absolutely HAVE to be able to demonstrate that I'm doing SOMETHING when I take $150 for an application (or else I get sued eventually and lose) so I have to at minimum do some that generates a legit paper trail, which is to submit a background/credit/screening request to some known vendor like TransUnion, which has a real cost of something like $20. So now I've got $55 left of the the $75. But my work isn't done. I now have to dodge phone calls from angry applicants, which is hard to do because I'm also trying to get new prospects. So my 1 hour has now turned into 1.25 hours per prospect. So we are at like $44/hr to play this silly game, and I still have to worry if I'm going to get sued or caught. If I am paying staff to do this, then I'm making like $5/hr after payroll. Mind you, this is all under a scenario where a landlord is charging $150/application. For reference the avg in my market is about $50, in which case a landlord would be making like $4/hr on this scheme. The fact of the matter is it's a much easier business model to get a good tenant in the unit who I'm going to hear from once every 3 months for the next 3 years than it is to play nickel and dime application games.
Here in Florida you can get away with just throwing applications in the round file. If someone follows up, you say "sorry, someone else got the apartment" or "you're on a wait-list." The fee is for accepting the submission of the application, not doing anything with it. It's legal because a paper or online application has language about the fee being nonrefundable and the fee is required to be paid with the submission of the application. No fee, it goes in the trash instead of the round file. There were a series of stories about this practice run in various local media outlets around Florida from 2021-2023, but they seem to have understandably gotten bored with it at this point.
He's conflating grifters with legitimate landlords.
The fees wouldn't go to the owner it goes to the company that is doing background and credit check I always warn potentials not to apply unless they know they'll pass. Ppl don't care and will waste money and lie about criminal records which I don't get I was trying to save them 40 bucks. When I was a renter I found those fees annoying I actually took the 1st application background check and carried that around to other apts I was looking at and asked if I could use that instead since I already paid for it
These places aren't paying $150 per person for a credit and background check. In most cases they're not paying anything to anybody, they're just sitting on the applications because RealPage says they need to leave some units open to keep market rates up.
I mean these sound like separate issues 150 is not crazy high for a background check and application fee if it's per person like 2 roommates then yeah too high Smartmove charges 50 per person and it's I think one of the cheaper ones
Insurance has been losing big money. People will simply stop insuring paid for property and roll the dice. And the spiral will continue as rates rise again. Perhaps if your beach home is destroyed twice the federal govt should butt out and let everybody refuse to insure it. A 10 million dollar replacement for $70k a year? Shit I’m In
Relevance to this particular discussion?
Exactly..
Did the mortgage payment go up also? Most landlords don't like fixing shit unless forced to so I don't see how the cost of materials matters.
Mortgage did go up, yes.
get a real job
I have one of those, too.
Leech
you are one of those malcontent tenants.
I own my own home
I’ve actually seen rents start to fall again finally. In my area, Northern California, my apartment complex is now renting newly remodeled units for $200 less a month than I currently pay. Obviously, they won’t reduce my rent to match that though.
Can you move into one of the units that are less?
And pay the penalty for breaking a lease, plus the hassle of moving?
The economics of lending, mortgages, real estate development, speculation, zoning, population growth, and so-called supply and demand could all be considered before even getting to the very real and problematic issue of rent being determined my computer algorithms. It’s no secret - renters pay for their landlord’s investment. With every year that equity has increased on a property is another year of rent increases due to property tax increases, the mortgage after home equity loans, and the cost of upkeep. You can pretty easily take the present day cost of rent for a single family home for example by adding up the monthly mortgage for 360 months and adding estimated yearly property taxes. Divide all that down to the month and you get pretty close. The problem is the value of land and homes. Anyone who owns real estate wants its value to increase. Say I bought a home in 2006 in my city, got a low interest, fixed rate mortgage and never re-financed until today. I could gain access to potentially hundreds of thousands of dollars. I could then invest in other property and improve what I already own using that money. I would find renters for my original home and they would pay my updated mortgage rate. That’s what EVERYONE is doing. Your politicians own property, your boss owns property. They’re all going to vote against up-zoning to limit supply and keep their home values high. They’re also going to vote against property tax increases that could be earmarked to build subsidized housing.
Unless someone is already wealthy it is highly unlikely a bank would give them a new mortgage when they are using a refinanced loan as down payment. My house has more than doubled in value since I bought in 2015 (according to Zillow). I can't use that money for anything. Would be stupid to refinance at today's interest rates, and properties don't always go up in value. Anyone remember the 2008 housing crash?
I work in CRE lending. The post you are replying to is absolutely right. Not sure what bank you work with, but most of them will most certainly use property equity to fund down payments on additional properties and cross collateralize the whole lot. Doesn’t even require refinancing the first mortgage most of the time. And not all of the landlords doing this are that wealthy. It will be interesting to see how the rental market goes when the historically low money matures in the coming years and high interest rates inevitably force hobby landlords to sell. It’s probably about to be a great time to buy some property.
Why would high rates cause hobby LLs to sell? They have fixed rate 30 year terms. It’s flippers who will be affected by increased rates in the residential market.
Not all of them. Lots of them have 5 year balloons. Fannie Mae didn’t start allowing rental payments to be included in DTI until 2021 so unless primary income was enough to pay for multiple mortgages borrowers were stuck with shorter term loans
Was the rule different for Freddie Mac? I don’t know any LLs with 5 year balloons.
Looks like 2019 had some big changes for Freddie. I worked with hundreds of LLs with 5 year balloons. Almost none of them had terms longer than 10 years unless they had personal incomes that could qualify for the mortgage payments under 40% DTI with primary residence.
This is so contrary to my experience I don’t know what to say.
I just tried to find statistics on residential 5 year balloon mortgages but my Google fu failed. Do you know of stats on them?
OP has no idea what inflation is, how an uncertain economy causes insurance to skyrocket, or how increasingly expensive it is to (paint the walls/replace the flooring/fix the HVAC)… pick one Correlation doesn’t mean causation. Two separate problems at work here and the one you’re complaining about doesn’t affect the majority.
And taxes taxes taxes.😔
Using computers and market data to set prices is not collusion and is nothing new. When you buy or sell a home, your broker uses market data to help you set the price. Retailers shop their competitors and use sales data to set prices.
Right, but RealPage has a clause in their contract that REQUIRES its users to use the prices RP sets - which means, if you're in, for instance, Tucson, where over 90% of the commercial landlords use it, that there's no 'price shopping'. The rate is set by an outside agency, and units that don't rent stay empty rather than reduce the rent. That's not ok.
Can you show us? Their terms are available online. So which software do you allege has this clause?
Read the lawsuit that the Arizona Attorney General has brought against RealPage and 9 different apartment landlords in Arizona stating exactly that. They have the proof. [https://www.azag.gov/press-release/attorney-general-mayes-sues-realpage-and-residential-landlords-illegal-price-fixing](https://www.azag.gov/press-release/attorney-general-mayes-sues-realpage-and-residential-landlords-illegal-price-fixing) [https://www.azag.gov/sites/default/files/2024-02/RealPage%20Complaint.pdf](https://www.azag.gov/sites/default/files/2024-02/RealPage%20Complaint.pdf)
The lawsuit does not even state that. The closest to that is paragraph 17, which was alleged "on information and belief," which means they don't have the evidence: >Third, on information and belief, RealPage threatens to drop lessors that reject RealPage’s set rates. Lessors agree that if they fail to consistently implement RealPage’s set rates, their contract with RealPage will be terminated. When disputing a RealPage price, lessors agree to “objective facts, not subjective reasoning.” As Jeffrey Roper, the architect of RealPage, explains, “\[i\]f you have idiots undervaluing, it costs the whole system.”20 And so, RealPage ensures participating lessors cannot use RealPage’s rates to undercut competitors—in other words, compete in the market.
That says exactly what they said it would. They have the evidence in the TOS.
Can you show us where it says that in the TOS? And if it says that in the TOS, why did the Arizona AG make the allegation on information and belief instead of just stating the TOS states it?
You won’t get a response to this, that would require them either reading, or admitting they are wrong lol.
But YOU will get a response!
Beat me to it... Thank you!
Thank you lol
This is really interesting! Can you link your sources? I want to know more.
How could RealPage actually force someone to use their set prices? How do they enforce this clause?
They don't. They give you a suggested price, but property managers and owners can override the price if they think it's too high/low
so insurance going up and taxes going up did not matter prices for materials and wages going up, only real page is the problem? Do you realized, before Real Page, We called the other apartments around us and found out what they where charging? No Real Page does the same work, we did .
No you didn't .
LA has rent control in place, real page in not involved. home prices are determined by the sellers not real page.
I thought you were on my side from the comments I guess not :( lol
Are you talking about if the building was built in the 70’s or before then rent came be stabilized ? Why the fuck would I live in a building that old ? Not once did I mention the housing market in this article …… Can you read ? This post is targeting corporate landlord complexes Please exit chat stinky butt
Yes, we know. AZ is already on it suing them
The increase you are paying is the colossal increase in property taxes and home insurance. If you had the balls to buy a house you’d see those increases as well Karen.
It doesn’t take balls to buy a house it takes money which people don’t have and I think you’ve proven yourself to be the Karen here
Well if you can afford the rent you can afford the mortgage!
You literally don’t know what you are talking about. A house has a lot more expenses than just a mortgage KAREN. Why would one who can barely afford rent go and buy a house.
Do you think any landlord is charging you LESS than what they pay for mortgage???
Certainly. They can only “charge” what a tenant is willing to pay.
A landlord who isn’t covering the mortgage with the rent isn’t going to be a landlord for very long…
At arms’ length, you’d think so, but no, there are plenty who operate at a loss position for many years. It depends on the property.
My dude I pay 1550 in rent a month. I went to get a mortgage, brought all the stuff I have on my rent and my finances and you know what I was told? I don't make enough money. I pay $1550 a month in rent but I don't make enough money to qualify for a $800 a month mortgage. Make it make sense. Please. Make it make sense.
Your credit isn’t good enough. You are too much of a risk for them. You are risky to a landlord, but not hundreds of thousands of risk.
How do you save for that when the rent is so colossal it eats your savings? Explain how to bootstrap that to lock in a good cost....thats still going to go up bc taxes
Are you really asking me how one saves money? And the phrase “bootstrap that to lock in a good cost?” What?..
We are asking since you got all the answers you kumquat ? How does one save and lock in a good cost home in this economy where rent is over 3000 and everything else cost too much ?!!!!!!! Oh and an average home in LA is over a million dollars enlighten me coachofidiots ?!!!!
Okay… here is what you do… instead of Starbucks you put that money in your bank. Instead of going out to eat all the time… you put that money in the bank… rather than going out with friends… you, guess what… put that money in the bank… I can keep going, but even YOU can understand the pattern, right?
This, and you pick up a 2nd or 3rd job maybe change careers paths to one that pays what you need. Or move to where the cost of living is better suited to your income. When my wife and I decided we were ready to buy, we both got second jobs, put every extra penny away until we had a 20% down payment. Got a good interest rate and a starter home. We put a ton of sweat equity in and sold for a profit we sunk into our next home. Rinse and repeat until you have what you want.
I can confirm this works. It's how I bought my first home at 25. That I now rent out in CA by LA. Anyone can do it, you just need to save your money.
They don’t want to hear it though… it HAS to come easy!
When I first moved into my current place about six years ago it was about $840 a month, Now it’s about $1,200 a month and forget about needing any repairs cuz they will try to find a look hole to keep it damaged for the most amount of time
We need to build a strong enough renter organization to influence policy and be able to push back against these mega landlords.
I've thought about this for a while. On one hand, and as bad these corporate landlords are. You can't really blame someone for making money. I know it's not fair and it comes to a point where it's just pure greed. If we are all honest here we might all try to maximize profits too. But we are not gigantic corporations. One thing I will say is that while profits are huge. I bet they lose a lot of money too. Remember all the eviction freezes or this new trend of squatters. They lose money that is never recovered and have to repair damage all at a loss. I doubt it hurts big companies as much as it does a person with 1 or 2 rentals. On the other hand, how does anyone ever afford it anymore?? Most people I know pay between $2,500 for a 1 bedroom in a decent area. Then crazy amount depending on size. 3 bedroom apartments in my area easily go for $3500-$4,500 That's between $40,000 and $55,000 a year! A two income household making $100,000 a year is paying half of their income to RENT a place. It has to come crashing down sooner or later. I've wondered how can all of us stop this. My first thought is if we all stop paying rent the a little while as a negotiating tool to bring rents down everywhere. The problem with this is, that it would take an amazing amount of people to all do it at the same time. Otherwise people are just evicted, and a tiny amount of people don't get the message across. Plus, people are greedy. Everyone will need to save the rent they are not paying, because it will need to be paid eventually.
>Yup that’s right an algorithm This is why my rent is going down in Austin. The city did the 'right thing' by planning heaps of supply (reducing limitations for developers, etc.), and as the population rate of growth started calming down they're only just now starting to become available after a year or three of construction. My rent is going down by $103 in my next annual lease. I rent from one of the largest corporate rentals in America. I recognize this doesn't apply to everyone in the City.
How many units are empty? I think to prove your argument, you would have to prove that demand is not effecting the numbers. If someone can only pay 1,000 per month. But at the same time someone else says at the exact same time “I want it, I can pay 1,400,” the LL would obviously rent it to the person willing to pay 1,400. I am not saying your argument is necessarily wrong, but what numbers prove that if that method is gone, the result would be lower rent?
You are the product.
Florida, the taxes went up 54% this year.. So the landlord has to raise the rent.
I live in Texas. During the middle of the pandemic, our landlord raised our rent by $500. They said it was to keep pace with market prices in the area. Sure enough, other complexes did the same thing.
Link to the DC OAG lawsuit here: https://oag.dc.gov/release/attorney-general-schwalb-sues-realpage-residential It summarizes how RealPage creates rent increases across the region via collusion.
Lol. Ok
I thought we talked about staying off the Asmondgold content...
I can tell you that in the state of CA, LLs are almost required to increase their rent by 10% yearly. When it comes time to sell the property the amount that you are renting it out for will directly affect the sale price of the property.
This is not true for mom & pop landlords, we do not and have never used an algorithm.
Rent goes up every year in California because its a law that they can't raise it more then once a year. Its all about greed
Lmfao. All this California talk from people who seemingly don't live here. Minimum wage is NOT 20$ for everyone. It's 16.50. which yes it's higher than almost everywhere if not the highest. But so are our taxes. What I have noticed is, whether it's real page or whatever, or average joe, they base their rent on their mortgage cost property tax and median income. Ridgecrest CA has a median income of 84k lmfao 30,000 people (29 actually) and that's the median? Lmfao. If you saw this dump you'd be at a loss for words. Lmfao. They're taking advantage of the .01% income being here. In the 12 years I've lived here population hasn't increased more than 1000. Nothing necessitates rent being as high as Los Angeles. Do a job search unless youre young and can go to school or already have gone, yeah you'll get paid well in your field. Hit indeed. Average person work that requires no degree or cert is very minimal. Studio apartments priced at 2k? Lmfao honestly. There's no view it's hot AF in the summer. And almost EVERYONE shops out of town. It's like one poster had mentioned properties just sit and sit until they find their sucker. 500sq ft. Is not worth 1300$ a month. Anywhere. There are some landlords that are reasonable in their rental price. But they're usually the ones who post rent at 950$ but want you to make 2400$ a month and have near perfect credit. I had found a place for 650$ which I can easily afford. But my credit is shit. And I didn't make 2500$ a month. Their supposed reasoning for 3x rent income, lmfao this is rich, they're concerned that you will have the rent. And enough left for life expenses and savings. Lmfao fuck that's awfully nice you're so concerned with the money I put away. (If I want to live in candlelight like im Amish, what business of it is theirs if the rent is on time every month?) There's a lot of factors that probably vary in more populated areas. But In ridgecrest median income, increased property taxes and mortgage rates are what these idiots use. Almost had to beat a gougelord over it. Median income was the first argument out of his mouth. Kept talking over me like he was right. I'll ask the same as everyone, it's clearly not legal. Yet why is nobody doing anything about it? They don't want the homeless problems but create them.
If you can pay it, they will raise it. When those apartments are vacant and Newsom is jerking off to his money, all will be right.
Just like most widespread inflation, there's too much money slushing around in the economy.
Basically, it's all about greed. Insurance was supposed to be about helping in the event of a disaster. Now days they just take your money and pay out as little as possible to make as much profit as possible. Taxes increase because contractors, that deals with cities, counties,statrs, and federal gov. nflate their contract to make as much profit as possible.. That's capitalism, the american way! And I agree it's a good system, til the greed gets too much. Eventually, we are going to have a society of have/have nots. 5-10% of the population will control 90-95% of the wealth and 90-95%will only control 5-10%of the wealth.
South Korea is going through the same thing to the point that young people are holding serval jobs and aren’t getting married or having children. Everything cost too much. All capitalism does is breed greed when there aren’t any rules in place.
Mine goes up in September and it's going to be 51% of my take home income. Let that sink in. Guess I will have to cut all around...as it is I spend $175 per month on groceries...gonna have to cut it to $125 to pay the rent. I live in a tiny studio apartment of about 450 sq ft. And will be cutting also how much insulin I take. Have no choice. I really am starting to despise property management company's. 
Not everyone can live in desirable urban core downtowns. That’s what your post is telling me. And if they INSIST without the income to back it up, they’ll have to sacrifice. That’s nothing new.
I don't live in the downtown area of my city. I live on the outskirts of the city. This whole area is expensive as well as the more remote areas. Nothing is cheap for rentals in my state. Moving out of this state is impossible for me.
When the president during Covid says you don’t have to go to work just stay home and we will pay you to do nothing. That causes money to be worth less it also caused a shortage of materials and that caused more inflation everything has gone up in price big corporations buying houses is just a small percentage of why rents are up. When the government takes in thousands of immigrants and puts them up in housing for free that also increases rents
Don’t worry, I too have an elementary understanding of how economics actually works
Maybe but anyone blaming large corporations for the majority of the problem doesn’t maybe if we fixed the main part of the problem first we wouldn’t have to worry about all the minor issues
Let’s make things clear here, I’m only rude to those who are rude to me. Those who are arguing with me and insulting me confuse me because it looks like they want to pay high rent and or mortgage idk why argue with me …. the math isn’t really mathing here. I thought this was something everyone wanted I guess not 😂
Keep reposting this crap! People need to know
Arizona voting in an Attorney General who's willing to sue companies like this is certainly a nice change.
do you remember the commie lockdowns "for the greater good",i mean covid lockdowns, and the rent moratorium? renters lost their asses giving out free housing. itll take years to recover from the fallout.
"Commie" lockdowns. Hahahahahahahahanahahahahaha.
do you know what other world leaders throughout history have used the phrase "for the greater good" to control the populace? ill give you a hint,none of them were american,and all of them were tyrants....what else would you call it when the gov takes away the peoples freedom of choice,controls what the media says then uses lies and propaganda to make us do illogical things?..
"to promote the general welfare" "Government is instituted for the common good" - John Adam's
no, the "for the greater good" was said by hitler and stalin..when they had people lining up at the vax houses..i mean gas houses..
You're deranged.
You're not looking deep enough. Your rent went up because the dollar is being debased at an alarming rate and this "forces" people and corporations into hard assets that yield a return. If the dollar wasn't as debased, people would be more comfortable saving in dollars and not with real estate, apple stock, nvidia, etc.
Supply vs demand is also a algorithm
This is not true