Should I stay or should I go now?
April 26, 2016 11:03 AM   Subscribe

My landlord is raising the rent above market. Not so much above market that it's an obvious win to move, but enough that we're talking real money. What should I do?

Our landlord is raising our rent on our one bedroom apartment by 8.5%. This rent increase comes with a month-to-month lease and a provision that the rent will not be raised again for another two years. The landlord has included detailed figures showing that he isn't making a cash profit on the rental and that this is about the amount he needs to break even on the mortgage and HOA fees.

Which is fine, except that units in our building that have identical or almost identical floorplans are renting for less. Based on this, I believe that raising our rent to market rates would mean a 2-2.5% increase, not an 8.5% one. There are two units in the building that are currently for rent and have almost exactly the same floor plan as our unit. They are, respectively, going for $200/month and $250/month less than our would-be new rent. And one of those two units has been on the market for a month and hasn't rented yet, which, if you know the San Francisco rental scene, you know is basically unheard-of.

We've shown this information to our landlord and he's come down a little bit on the price from his original increase, but not much, and doesn't really seem to believe our comparables -- for example, he said that one didn't allow pets (we have a cat) when the listing didn't say whether it allowed pets or not (I asked the landlord; it does allow pets). He's also provided his own comparables and data to support his position, but it's all based on estimates from Zillow that are, in my opinion, not very accurate. Also, to forestall any questions, no, we don't have rent control.

I can afford to pay the $2,000-$3,000/year that represents the difference between our new rent and market rent, but it really bothers me. I feel frustrated by the fact that it's expensive and inconvenient to move and that our landlord is able to use this fact to command above-market rents. Also, rents in this city are insane enough already and paying an above-market rent feels especially insane.

What do you think I ought to do, Mefites? Can anyone who's been in this position provide advice?
posted by anonymous to Home & Garden (33 answers total) 1 user marked this as a favorite
 
This is the hassle of being a renter. You pushed back at your landlord and got the small concession, but it sounds like that's all he's willing to go for. Only you can decide what it's worth to you to not have to move.
posted by BlahLaLa at 11:09 AM on April 26, 2016 [10 favorites]


I'd check out the other apartments in your building and if it suits, I might move.

I feel you on this. Our rents raise about $100 a year, which is about an 8% increase as well. They're also tearing out our pool, gym and club house so that the front of the complex can be built up with high priced townhomes. So no amenities. Even so, we looked at other places we might like to rent and found them to be more expensive, and a much shittier commute. So although it's galling, I'm staying put.

As you so rightly observe, moving costs something. In our neck of the woods, it's $1000 for movers, establishing utilities, dealing with whatever internet/phone/tv provider is going to piss me off with shitty service....plus the upheaval of it all.

I get that you feel like the Landlord is getting one over on you, but when you do the math, I think you'll find that it really is better to stay put.

The other thing is that month to month, with no increase for two years is pretty golden.

But I might think twice about in intra-building move. I wouldn't need movers for all but the heaviest stuff and there would be a minimum of packing.

So view the other units, and decide from there.
posted by Ruthless Bunny at 11:10 AM on April 26, 2016 [7 favorites]


We are going through something similar right now. Our lease is up in July, and the appt. complex plans to basically demolish and build new units where we are now so we have to be out at the end of July. There are open units in our complex that are pretty much the same as where we are now but have been "refurbished" so updated floors, kitchen, hardware, ect and the rent will be more than we are paying now.

Our debate was are we better off staying with a know quantity (ie. the complex where we are know where we are happy with the area/maintenance/management ) or find some place slightly cheaper but have to pay to apply, various deposits, and more money to move cross town then across a parking lot.

For what its worth we opted to stay where we are for now since some quick calculations pretty much showed it would likely end up a wash money wise.
posted by Captain_Science at 11:12 AM on April 26, 2016 [1 favorite]


I would move, you are on a month to month lease with a provision to not increase the rent for two years? The lease is a binding contract that ends each month, so that provision isn't worth the paper it's printed on. Your landlord can jack the price up every month and you would have no way to fight it.
posted by lpcxa0 at 11:22 AM on April 26, 2016 [1 favorite]


If it is moving within the building or complex, I would move. I would use the savings to pay for the move. Ultimately his justification means nothing other than it tells you what type of landlord he is. He can ask whatever he wants for whatever reason. It sounds as if he is trying to take advantage of the fact that moving is a hassle. Moving within a building is not near as much hassle.
posted by AugustWest at 11:27 AM on April 26, 2016 [1 favorite]


I would move, you are on a month to month lease with a provision to not increase the rent for two years? The lease is a binding contract that ends each month, so that provision isn't worth the paper it's printed on.

Not necessarily, the lease could provide that if it's renewed, it must be renewed at the same rent through [x date]. However, as on any month-to-month, the landlord could decide to kick the person out on a month's notice if he found a tenant he liked better.
posted by praemunire at 11:29 AM on April 26, 2016


I add that I would negotiate a lease with new apartment owner first, then give current landlord a chance (24 hours) to meet your initial suggestion of $100 a month increase. If he is losing money either he has a high priced or large mortgage or he overpaid for it in the first place, but that is his issue not yours. He should sell if he is continuously losing money.
posted by AugustWest at 11:30 AM on April 26, 2016 [3 favorites]


@ 250 a month difference you can probably pay to have someone pack you, move you, and unpack you and still end up slightly ahead in the game.

So move.

Its not your fault he can't make the math work.
posted by JPD at 11:40 AM on April 26, 2016 [5 favorites]


I see where you're coming from, but no amount of debating over and data about "market rates" is likely to have any effect - either the guy's actually losing money, for real watching cash drain from his bank account, in which case he's probably panicking; or he's convinced himself that SF is such a tight housing market that he's foolishly leaving money on the table by not charging every single possible penny. Either way, it's not really a "rational" decision, despite his charts and graphs and Zillow data. It's an emotional one, he's either scared or greedy. Heck, maybe both.

So he won't be swayed by rational "market rate" arguments against it. Probably the only thing that would convince him otherwise would be for you to leave and have the place sit empty for months. IOW, this is the price he wants, either you pay it or don't, but don't waste more time and energy trying to figure out a way to make him act rationally.

And I'll second lpcxa0 that there's something off about offering a "month-to-month" AND a "price stability" clause.

I do like the idea of just moving to another place in the same condo complex, which would get you all the benefits of the area you live in without the price tag.
posted by soundguy99 at 11:43 AM on April 26, 2016 [8 favorites]


We had a similar negotiation recently. Near-identical units in our building were sitting vacant even at rent ~300/month below market, and yet our landlord wanted to raise our rent by rather more than market. (I mean, obviously, they wanted to do this to recoup what they were losing on the empty units, but that's not our problem.)

You've already presented comparables, he's come down somewhat--the only thing you can do now is ask to move into one of the other units in the building at the lower rate.

This is what we eventually did as well; in exchange, our landlord opted to renew our lease with no increase. Sounds like yours may prefer to move you to a different unit in order to upcharge your current one, but either way you'd get a better deal out of it.
posted by We put our faith in Blast Hardcheese at 11:46 AM on April 26, 2016 [3 favorites]


If the other units in your building are really renting for that much less, I think it definitely makes sense to move to one of them! You won't need to do a super great packing job and should be able to do it without movers (or maybe hire some college kids for a couple of hours for the really heavy stuff). It's a pain, but for multiple thousands of dollars it seems worth it. You might even be able to negotiate the owners of the other units down if it really has been sitting empty for a while.

Plus, you get to screw over this guy because for sure the unit is now going to sit empty for quite some time until he brings the price down...
posted by rainbowbrite at 11:53 AM on April 26, 2016 [2 favorites]


Sorry, I wanted to be anonymous, but it's worth it to me to clarify one thing -- the month-to-month lease with no-rent-increase-for-two-years thing is legit. That's been how our lease has worked for the past four years and I have no reason to think our current landlord plans to try to raise the rent out of schedule. Also, to clarify, the landlord doesn't own the whole building, just our current unit.
posted by phoenixy at 11:54 AM on April 26, 2016


I'd move to one of the other units. Even if your landlord does come down a bit, you already know that he's not covering his costs, so there will be pressure on him to raise the rent. Maybe not in the next few months, but the pressure remains.
posted by quince at 11:57 AM on April 26, 2016 [2 favorites]


Month-to-month tenancy and no-rent-increase-for-two-years in the same sentence does not compute.

If the agreement is month-to-month, it can be terminated by your landlord with 30 days notice. In other words, he simply has to say, "I won't increase your rent, but the deal ends on 1 June 2016. After that, you can sign a new agreement with increased rent" and be completely compliant with the agreement.

If the agreement is for two years, then it is a lease, not a month-to-month tenancy.

For your actual question, you are the market. You get to decide if the rent is appropriate or not. You are the only person that gets to make this choice. It doesn't matter what other people pay. You get to determine if you are willing to pay what the landlord is asking. Your choice is to pay it, or leave.
posted by saeculorum at 12:00 PM on April 26, 2016 [3 favorites]


It should be none of your concern about his breaking even. He's either stupid or trying to put one over on you. He builds equity over time. You gain nothing over time.

You should move if you can.
posted by supercres at 12:11 PM on April 26, 2016 [3 favorites]


Even if your landlord does come down a bit, you already know that he's not covering his costs, so there will be pressure on him to raise the rent.

And pressure to not do a stellar job of maintenance and repairs. I'd move.
posted by vignettist at 12:17 PM on April 26, 2016


Month-to-month tenancy and no-rent-increase-for-two-years in the same sentence does not compute.

If the agreement is month-to-month, it can be terminated by your landlord with 30 days notice. In other words, he simply has to say, "I won't increase your rent, but the deal ends on 1 June 2016. After that, you can sign a new agreement with increased rent" and be completely compliant with the agreement.


It's called survival. You can specify that a term in a contract will outlast its termination.

I still think any month-to-month lacks the security to be worth such an increase, though.
posted by praemunire at 12:29 PM on April 26, 2016 [2 favorites]


I love the "theory" of how negotiation works, but I hate it in practice because it's always so hard to come with with a true BATNA, so I'm a little giddy about how cut and dried your situation is.

Your BATNA is the price/hassle of the move, combined with the lower rate that you could be paying for the same floor plan in the same building. You may not actually know what his BATNA is, but right now he's playing a game of hardball that he kind of deserves to lose. Maybe he's hoping he can rent it to new people for even more than he's asking you for? Either way, he seems to think that it's worth the risk of losing good tenants

So you should move, because, you did your negotiation and your BATNA seems like a pretty good deal. You have nothing to lose but a few days worth of time moving (you won't even need a truck).

I feel frustrated by the fact that it's expensive and inconvenient to move and that our landlord is able to use this fact to command above-market rents. Also, rents in this city are insane enough already and paying an above-market rent feels especially insane.

This is the trade-off for the privilege of renting. You get more flexibility than if you were tied to a mortgage, but you end up with the risk of having your rent hiked. If this frustrates you, you need to buy a home. Not that homeownership doesn't have it's own huge pile of costs (not the least of which being needing to move to a whole different area/maybe change jobs or careers), but you need to decide whether those costs are worth it to have the control that you want over your living situation.
posted by sparklemotion at 12:41 PM on April 26, 2016 [4 favorites]


San Francisco? What are the chances you can find a more reasonable rent for two years and a scrupulous landlord.

If you can have two years of stable rent in the bay area, then I'd probably stay put. I've moved within the building, and it's not a great situation. (Moving utilities, internet, paying deposits, recouping the damage deposit, first and last months rent on the new place. Cash outflows don't always time well with the return of deposits - it's non-trivial.)
posted by 26.2 at 12:48 PM on April 26, 2016 [1 favorite]


There are two units in the building that are currently for rent and have almost exactly the same floor plan as our unit. They are, respectively, going for $200/month and $250/month less than our would-be new rent.

Why don't you try saying that you would be happy to transfer to one of those apartments at the advertised rent rates and he can try his luck at renting your current unit at his preferred rate?
posted by slkinsey at 1:54 PM on April 26, 2016


The landlord has included detailed figures showing that he isn't making a cash profit on the rental and that this is about the amount he needs to break even on the mortgage and HOA fees.

He's got to pay his bills. If he needs to raise the rent to cover his mortgage and HOA fees, he has to. He shouldn't have to subsidize you living there. He's obviously got a higher mortgage than the other people who are renting in the building and can't afford to rent at a lower price. He came down a little and that's all you should expect really. If this is a problem for you, you should probably move.
posted by NoraCharles at 2:04 PM on April 26, 2016 [3 favorites]


Tenants shouldn't have to subsidize the landlord's investment by paying above market rent. If his goal was to break even, he miscalculated. That doesn't make his apartment worth more.
posted by Melsky at 2:44 PM on April 26, 2016 [11 favorites]


I think you should actively pursue the apartment in your building that's already been on the market for a couple of months, ask that owner if s/he's flexible on price, and then tell your landlord you will be moving out unless he can match that price.

He's got to pay his bills, but *you* don't have to pay his bills. If that's a problem for him, he should sell the condo.
posted by mskyle at 2:44 PM on April 26, 2016 [4 favorites]


soundguy99 is 100% right here. Either move within the building or suck up the increase, but don't waste your time or energy on figuring out what he "should" be charging you. From his point of view, he should charge you $1 less than whatever price it would take to make you move. It sounds like the math is going to be close as far as cost of moving vs cost of staying (unless you can move yourselves within the building and don't need a truck/movers/boxes etc.) so just go with whichever option is more emotionally satisfying to you and don't look back.
posted by Rock Steady at 2:50 PM on April 26, 2016 [3 favorites]


Yeah you should move. Ask the other two landlords to come down 100 dollars per month since the other units have been sitting vacant. Even if you pay 1000 dollars to move and spend a weekend doing it, you'll save $6,000 dollars in the next two years. And then take a nice vacation, pay down debt, eat our every Saturday night at the super nice place. That is A LOT of free money to you.
posted by Kalmya at 2:52 PM on April 26, 2016 [4 favorites]


You should first shop around a little and see if there's anything else out there that looks more attractive to you. Because that would be the real deciding factor.
posted by ovvl at 4:27 PM on April 26, 2016


Def try to get the other apartment in your building. You'll have the one off hassle of moving but the savings are worth it. Your landlord on the other hand will have an empty apartment, have to pay to advertise it, and then there's every chance he won't get near what he wants anyway so it's potentially an all round loss for him. This may be enough for him to bite the bullet and let you stay. The fact that your rent isn't enough to cover his expenses is not your problem.
posted by Jubey at 4:59 PM on April 26, 2016 [1 favorite]


If he needs to raise the rent to cover his mortgage and HOA fees, he has to. He shouldn't have to subsidize you living there.

Conversely, the OP shouldn't have to subsidise the landlord's mortgage and HOA fees. All of that is independent of the property's rental value and what the OP (as the 'market' here) considers reasonable. This is why the OP should try to move to another unit in the same building.
posted by holgate at 5:10 PM on April 26, 2016 [3 favorites]


I'd movev only if the other apartment will give you a two year guarantee on that lower rate.
posted by salvia at 5:28 PM on April 26, 2016 [1 favorite]


Just came in here to echo some of the other comments. Some amateur landlords make this mistake often. Any costs of mortgage or cost of providing housing is irrelevant to what rent you should be paying. Rents are determined by the market, not by what the landlord needs to pay on his maintenence fees. The market determines the prices, not the landlords' needs. If he can't cover his costs, with current market rent, tough. That's the risk one takes as a landowner.

Always remember that you are paying a lot of money for a service. It's well within your rights to demand a good service for the price you are paying. If you are not getting that service, move! We are renters too and have moved every two years. A little stressful but we keep our possessions minimal.
posted by moiraine at 11:07 PM on April 26, 2016 [2 favorites]


Is your landlord keeping up with repairs, etc? In a similar situation, my landlords were in over their heads with a bad mortgage, tried to tread water for a year and they were AWFUL. Just awful about being asked to make repairs. They decided to let a nearly missing window to the outside (on ground level) go unfixed from November to the spring. We moved immediately, but they gave us the same reason for a rent increase when we were already paying above market. There are many reasons not to rent from people who don't understand what they're getting into when renting out their place - you are not an ATM. You are somebody they are providing with a service. When you go shopping at a store do they give you presentations on why they need to charge about MSRP? Exactly.

If you like the condo complex, totally stay. moiraine has it dialed in.
posted by sweltering at 3:35 AM on April 27, 2016


You should definitely move, regardless of what he sets the rent at. You do not want to be renting from an insolvent landlord.

If the LTV on his mortgage is so high that he can only cover the mortgage by raising your rent to $250pcm above market rate, he is not setting money aside for repairs (should be 10% of the rent, in most cases). If your boiler breaks in autumn, or you find damp under a window, he is not going to have any money to fix it.
posted by tinkletown at 4:43 AM on April 27, 2016 [2 favorites]


I have a somewhat similar situation going on and I'm downsizing to a cheaper apartment. In life, my salary probably isn't going to go up from this point and my rent is only going to get worse every year. With all my heart and soul I don't want to be doing this, but I can no longer argue with how high the rent is going up to the point where it's unreasonable. You gotta move.
posted by jenfullmoon at 7:03 AM on April 27, 2016


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