Interesting question. I’ll give you my perspective as a landlord who raised the rent about 10% in March of 2005.
I raised it because the rent wasn’t enough to cover my costs. I was about 300/month short and expected rents to increase and cover me after 2 years. I just assumed a 10% increase each year. This happened about the same time I stumbled upon Piggington. Interesting thing is, the renters complained about it, which surprised me. I put two and two together (OK, Rich put 2 and 2 together for me) and sold. The house closed in August.
If your landlord has owned the property for years and years and years and they haven’t raised the rent in a couple of years, chances are it is fairly justifiable and they are just being dilligent to ensure they get the most out of their property.
If they are new owners, however, they may be raising the rent based on what they need to make to cover their mortgage, without knowing their rental market.
Important for you to know. Knowledge is power in this case. I would suggest spending a day shopping for a new rental, even if you don’t plan on moving, to get an idea of the market. If you are getting a fair deal, just pay the man. If not, show them some comparible places and suggest they are a little off base, but don’t be surprised if they decide to sell once you do.
Seems like there was an article posted long ago on how rents can increase as a housing bubble deflates. This makes sense to me as more and more landlords NEED to charge a little more rent to help cover those ARMs.
If you have to move, look for a landlord who has owned a place for many years. Their payments and property tax will be lower and they won’t be forced to raise rents in the future. They may also value stable renters rather than those paying a premium price.
