What is an appropriate rent increase for Seattle apartments (Cap. Hill)?

April 15, 2016 2:27 PM

What is an appropriate rent increase (by dollars or %s) for Cap. Hill/Seattle at the moment? I haven't rented in years.

I rent out my condo in a very, very desirable part of Cap. Hill - short walk to Elysian, Top Pot, Pike/Pine, just off Union at 15th. Rents in this 'hood are crazy right now, but I am losing money on my rental.

What is an appropriate rent increase (by dollars or %s) for Cap Hill/Seattle at the moment? I haven't rented in years.

It's a 1 bedroom condo with off street parking and a back patio, I'm currently charging $1600 but Zillow says that's low. I just need to break even.

My tenants are good, they've been there for a year and want to stay.

Thanks, peeps!

posted by tristeza to Work & Money (14 answers total)

What would the dollar/percentage increase be if you raised rent enough to break even? Work backwards from there.
posted by serelliya at 2:30 PM on April 15, 2016

Response by poster: Thanks serelliya - I should maybe rephrase that: to actually break even I'd need to increase it more than I think my tenants will bear, so I'm trying to see if there's like a standard rate or something that will help me find a middle ground w/o screwing them or me. Does that make sense?
posted by tristeza at 2:53 PM on April 15, 2016

In Seattle you need to give a certain number of days notice if you're raising it more than 10%, so it seems like 10% would be the high end of the standard rate.
posted by Jairus at 2:55 PM on April 15, 2016

Please indicate how much you need per month to break even.

I'm assuming you are not prevented from raising the rent via any stabilization laws or anything - right? In general, it's easier to help you parse this if we know how much you need to make.
posted by jbenben at 2:55 PM on April 15, 2016

When we lived in Berkeley (ah, it was lovely being a renter in Berkeley), I believe the annual increase allowed was something like 2%, so ~$30 in your case. Now we live in a different city (Boston area) without rent control and pay around what you charge in rent, and our increases have typically been around $20-$30 each year (to the monthly rent, so $20x12 spread over the whole year). So, two places with pretty hot housing markets, one rent controlled one not, but a similar level of rent increase. I think you'd be perfectly good with an increase in this range.

That said, if you're renting far below market rent AND not breaking even, I don't think it's completely unreasonable to raise things more than that (depending on what the local laws of your area say).
posted by rainbowbrite at 2:58 PM on April 15, 2016

Google says:

"The average monthly rent for all unit types on Capitol Hill — $1,395, according to an industry-analysis firm, Apartment Insights — buys about 500 square feet in some buildings."

That's from an article published in 2013 in The Seattle Times.
posted by xyzzy at 3:01 PM on April 15, 2016

An article from 2013 is unlikely to be very useful - rents in Seattle are not stable year to year. I think what you are seeing on Zillow is probably the most accurate you can get -- but, what the "market rate" is does not tell you what these particular tenants can pay, as it sounds like you know. :)
posted by rainbowbrite at 3:03 PM on April 15, 2016 [7 favorites]

Doing some back of the napkin math, 9.5% increase is $152 more per month. If you need more than $1750 per month in rent, you might need to calculate how much you are paying per year to keep owning this property. Then make some decisions.

You sound super nice. This is business. You shouldn't provide subsidized housing for folks if you can't afford to be so extremely overly generous. I agree though that nice tenants are worth shouldering a little extra effort, but you need to be reasonable and thoughtful of your own short and long term financial wellbeing.
posted by jbenben at 3:03 PM on April 15, 2016 [2 favorites]

Here's a unit just a block or so away going for $1650/mo w/ utilities without a patio or parking. It also seems like a fairly small unit. I'd value a patio at $50/month (some might value it up to $100/mo) and parking at $200/mo (some might value up to $300/mo).

Here's your competition - 2 bd/900 sqft at $1845/mo w/ utilities, without a patio, but with parking.

I suggest you could rent somewhere between $1700-$1800/mo without much effort. Setting your rent at $1750/mo is just under the 10% increase that requires 90 days notice, which seems like the right choice.
posted by saeculorum at 3:19 PM on April 15, 2016 [3 favorites]

I have lived in this neighborhood. I lived in a large studio/loft right by Analog Coffee from 2012 to 2015 and saw a 100$ increase in rent each year. It was 1600 including trash and water, not including electric or parking (another 100), when I left. I imagine with the light rail opening up the rent increases are a little more this year. I would have killed a man for a patio.

Now I live in Boston where the $50 increase on my 2BR seems downright generous.
posted by fbo at 4:06 PM on April 15, 2016

Yeah, we left our ratty, 2br/1ba at Bellevue and Pine about a year ago. It was a "garden level" place (so sort of subterranean) that hadn't had significant updates in at least a couple of decades. There was no eating area, the kitchen was cramped and inadequately ventilated, and the carpet was like something out of The Dark Backward-- but it was had exposed brick and it was dog friendly.

By the time we left, our rent was $1600.00, including water, but without access to any sort of outdoor space. There was no parking, so we paid a nearby merchant $100.00 for a space in their lot. We got hit with serial rent increases during our last few years, (some of which were meant to encourage us to sign a lease instead of staying month-to-month) so we felt like we were overpaying-- but that price, apparently, looked pretty good to folks. Tons and tons or people fell all over each other to apply to rent it at the same rate when we left, despite its many, many flaws. (The landlord apparently chose not to replace The Carpet of Foetid Terror. It most likely festers there still.)

Your place has one less bedroom, but it sounds like a far, far nicer place-- and as you've noted, rents on Capitol Hill are climbing like crazy. IMO, $1750.00 would not be out of line for what you're describing.

A lot depends on the square footage and fit-and-finish, though: How big is it? Does it have nice flooring? How old are the bathroom fittings and kitchen appliances? What do the counters and cabinets look like? How's the light? Anything interesting about the architecture and design?
posted by palmcorder_yajna at 4:49 PM on April 15, 2016 [2 favorites]

You're framing this as "what's an acceptable % increase" but I think you really need to ask "what's the market rate for this condo".

Head over to craigslist and look at every single 1BR listing within walking distance of yours. Try to objectively compare them with yours and get a sense of a range where you think yours would fall.

Also consider whether you could turn it around in 0 months if your current tenants leave. It's always frustrating to watch the lose/lose scenario where I see an apartment listed at the top of the market rate, sitting vacant for 1+ months. Leaving it vacant for just a single month is an 8% discount on an annual basis.
posted by reeddavid at 10:51 PM on April 15, 2016

My buildings got sold summer before last and the 600 sq. ft. one bedrooms that were going $975--$1025 are around $1600--$1700 nowadays. What old timers in the neighb' call Amazombie rents.
posted by y2karl at 7:31 AM on April 16, 2016

I'm in Ballard, but I'd argue rents are even more crazy here than in Capitol Hill. My landlord increased my rent by 2% after a year. This is on the low end, most people I know here are paying 5% more year after year. The rental market here is batshit, I don't think your tenants are likely to be surprised with any increase.

While I don't think being off 15th necessarily is the most desirable part of the hill (I've lived all over the hill and was looking at that exact area last year and it generally is a bit cheaper that far east, despite all the good stuff up there), you are totally undervaluing off street parking and the patio. That's solid gold!

Other things that would make your place more desirable: Washer/dryer in unit? Dishwasher? Pet friendly? Pet friendly places are usually about $100-200 more even with size restrictions and you can charge pet rent—doesn't sound like it applies to your current tenants, but keep it in mind for the future.

Also, Zillow's rent estimates suck. They generally are low by like $200-300. They estimate my rent to be $300 cheaper and I've looked at approximately 3000 rentals on Zillow and they're always lower than reality. So if Zillow is telling you that you're on the low end, don't be afraid to go above it. Check out Craigslist for a better idea of what similar places are going for rather than using Zillow/Trulia.
posted by the thorn bushes have roses at 10:51 PM on April 16, 2016 [1 favorite]