Are homeowners rejoicing?

[scaredyclassic]

May I rejoice at what appears to have been a good year?

[Jazzman]

[quote=joec] the OP should chime in and let us know how it went…
[/quote]
Agreed.

[kev374]

ok, here are the specifics… the area is Costa Mesa on 19th st. but in the rougher area near the DMV, it is sort of a Mexican hood but a bit better than Santa Ana, the city together with investors have been trying like crazy to pursue gentrification due to it’s proximity to Newport beach but as it stands it’s still a somewhat rougher area compared to South Orange County.

when I moved in Sep ’11 rent was below market for the area at $1025/mo. The complex is rather old and dilapidated but I was ok with it due to the cheap rent. The unit is tiny as well, 520 sqft and has only a carport but it is gated which is a plus.

The place was owned by a private person and she mentioned that she was keeping rents quite a bit below market since she didn’t want turnover and had much higher criteria for tenant quality (credit, income stability etc.). Then she sold the place to another investor 4 months after I moved in, I was on a 6 month lease but after that expired the rent jumped to $1045/mo., then $1085/mo. in 2 more months. Fair enough I still paid without complaints as it was a good deal.

This investors sold again to someone else now and fast forward to today the rent is now $1145 which is reasonable for the size of the unit and the area. The new notice increases this to $1270/mo. I also have 2 motorcycles and pay $150/mo. for a 10×10 storage unit to store them about a half mile away. So my total outflows with this increase would be $1270+150 = $1420 which is ridiculous for the area and the fact that I have no garage.

A friend of mine has just rented a 2 bd, 1100 sqft w/2 car garage just a few blocks away for $1500 and in that same complex was a 850 sqft 1bd with 2 car garage (a bit unusual for a 1bd) for $1290 so the new increase is a very bad deal for me.

I had a talk with the mgr and showed actual listings in the area of places with garages for under $1300/mo. She argues that new tenants are paying $1400 base rent YIKES!! and her offer of $1270/mo to me represents a “discount”. I told her how can it be a discount when I am showing her actual listings on craigslist of LARGER places in a somewhat better area WITH a garage onsite for LESS.

It’s not like I am pulling facts out of my behind, I have no problems paying what the market bears but my research shows that there are other much more competitively priced units. But they are refusing to budge on the new rent.

It seems to me that there are two distinct markets, some complexes where landlords have acquired properties a long time ago for a lot less can keep rents lower to hang on to good tenants, but the more recent investors need to jack up the rents in order to get return on their inflated investments. As a renter I could care less about an investor’s situation of trying to recoup their investment, I care only about the bottom line and who is offering me the best deal.

They did give me a 60 day notice since by law they have to for anything over a 10% increase, so I will be moving, it’s a pain but I can do better and it’s much more convenient for me to have a garage onsite.

But I am in AWE of people paying $1400/mo for a tiny, crappy apt in a halfway crappy area! LOL! But if the landlord can find such suckers more power to them.

Sorry for such a long winded reply but now you have a much better view of my situation 🙂

[spdrun]

Do any local laws govern rent raises in addition to CA law?

If you find a unit nearby for a better price, then by all means move. You probably don’t want to be renting from slightly-sleazy dirtbags anyway.

And lastly, just because the manager says it’s true, doesn’t mean it is.

[Coronita]

[quote=kev374]ok, here are the specifics… the area is Costa Mesa on 19th st. but in the rougher area near the DMV, it is sort of a Mexican hood but a bit better than Santa Ana, the city together with investors have been trying like crazy to pursue gentrification due to it’s proximity to Newport beach but as it stands it’s still a somewhat rougher area compared to South Orange County.

when I moved in Sep ’11 rent was below market for the area at $1025/mo. The complex is rather old and dilapidated but I was ok with it due to the cheap rent. The unit is tiny as well, 520 sqft and has only a carport but it is gated which is a plus.

The place was owned by a private person and she mentioned that she was keeping rents quite a bit below market since she didn’t want turnover and had much higher criteria for tenant quality (credit, income stability etc.). Then she sold the place to another investor 4 months after I moved in, I was on a 6 month lease but after that expired the rent jumped to $1045/mo., then $1085/mo. in 2 more months. Fair enough I still paid without complaints as it was a good deal.

This investors sold again to someone else now and fast forward to today the rent is now $1145 which is reasonable for the size of the unit and the area. The new notice increases this to $1270/mo. I also have 2 motorcycles and pay $150/mo. for a 10×10 storage unit to store them about a half mile away. So my total outflows with this increase would be $1270+150 = $1420 which is ridiculous for the area and the fact that I have no garage.

A friend of mine has just rented a 2 bd, 1100 sqft w/2 car garage just a few blocks away for $1500 and in that same complex was a 850 sqft 1bd with 2 car garage (a bit unusual for a 1bd) for $1290 so the new increase is a very bad deal for me.

I had a talk with the mgr and showed actual listings in the area of places with garages for under $1300/mo. She argues that new tenants are paying $1400 base rent YIKES!! and her offer of $1270/mo to me represents a “discount”. I told her how can it be a discount when I am showing her actual listings on craigslist of LARGER places in a somewhat better area WITH a garage onsite for LESS.

It’s not like I am pulling facts out of my behind, I have no problems paying what the market bears but my research shows that there are other much more competitively priced units. But they are refusing to budge on the new rent.

It seems to me that there are two distinct markets, some complexes where landlords have acquired properties a long time ago for a lot less can keep rents lower to hang on to good tenants, but the more recent investors need to jack up the rents in order to get return on their inflated investments. As a renter I could care less about an investor’s situation of trying to recoup their investment, I care only about the bottom line and who is offering me the best deal.

They did give me a 60 day notice since by law they have to for anything over a 10% increase, so I will be moving, it’s a pain but I can do better and it’s much more convenient for me to have a garage onsite.

But I am in AWE of people paying $1400/mo for a tiny, crappy apt in a halfway crappy area! LOL! But if the landlord can find such suckers more power to them.

Sorry for such a long winded reply but now you have a much better view of my situation :)[/quote]

Ok, so IF what the landlord says is true (current market price is $1400/month), and you’re rent is $1270/month.. well then, you are getting a discount since it is below market. I would double check to see if the landlord being truthful. Worst comes to worst, you find a nicer place at the same price (though I tend to believe your landlord that current rent is $1400/month for a 1/1)

You might not like the fact that your rent is $225/month more from the first rent you had back in 2011… But if the market really does support $1400/month for a 1-1, then the burden is on you to find another place that is cheaper than $1270/month.
Since it’s only a 1/1, it’s *not* that much of an effort to move if you are able to find something better or cheaper.

If a landlord really is trying to charge above market prices, well it should be pretty easy to find another place, and pay maybe like $30 for a uhaul rental on 1/2 day’s worth of moving out of a 1/1….

Your landlord isn’t going to do anything until you tell them you are moving out, and then if it comes to that, you better make good on your words.

[FlyerInHi]

[quote=JohnAlt91941]Anyone rejoicing over a paper profit is a dope.[/quote]

Good cash flow is something to rejoice over.

[joec]

Yeah, agree with flu here. If you’re only in a 1/1, it can’t be that hard to move. It IS a pain, but this is sorta where longer leases sorta helps the renter as well to keep rents from going up. I’d believe the landlord is probably correct on the rate other people are paying.

Unlike most of the renters, landlords, especially financial ones like this just look at the numbers and charge what works and what they can get away with. It’s not really that emotional for them, especially the corporate types IMO. I could be way off, but it doesn’t do them any good since the manager probably just “works” there.

If it’s a large complex and all the new people are paying 1400/month, maybe some other quality is forcing people to rent at your place like pets allowed, etc…

That said, I’ve just move. Also, another thing to consider is maybe the “nicer” place you’re seeing is from small time renters underpricing it to find the ultimate best tenant. Maybe out of 200 applicants, only 1 gets picked so hardly anyone really gets that price.

So glad we bought back in 09. Just saw one of those realtor flyers showing sold homes for near 150k from what we paid! Crazy.

[Coronita]

I’d be careful about the craiglist lowpriced advertised rentals…

More than often, they are either

1. Trying to capture as much interest as possible so the landlord can pick and choose tenants that inevitably ends up paying much higher

or

2. Trial posts by future landlords to test just how much demand there is at a given price point.. (Hence you’ll never hear back from them if you send them an email)

[Reality]

[quote=FlyerInHi][quote=JohnAlt91941]Anyone rejoicing over a paper profit is a dope.[/quote]

Good cash flow is something to rejoice over.[/quote]

Agree. Cash is king.

[CA renter]

Sounds like they are giving you a good reason to move into one of those apartments with a garage. They are hoping you won’t do it because it’s inconvenient, but with a 1 bedroom apt, moving is a whole lot easier than it would be if you were in a SFH with a family.

Please let us know how it goes. Best of luck!

[Author]

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