Raising the Rent

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Submitted by treehugger on December 27, 2016 - 12:01pm

Finally going to raise the rent on our Oceanside Condo. Same tenants for past 7 years and we have never raised rent. Going to raise it $150....they pay late nearly every month with the $100 penalty, so I decided if they just manage to pay on time this is really only a $50 increase.

I still think we are under market value, have always been happy with current tenants and just didn't want to be bothered with dealing with them, current rent covers costs, but now water and HOA fees going up.

How do I figure out what the average rent is for a certain area? This is a nice area of Oceanside near the 78 and Rancho del Oro.

Submitted by Coronita on December 27, 2016 - 12:37pm.

I look at craigslist to see the comparables near my units and what they renting for.

I figure when I do raise rent prices, the tenant will first look at craigslist to see if there are places nearby that are as good or better, for a better price.

I make sure they won't find anything better at a better price :)

Submitted by gzz on December 28, 2016 - 2:26pm.

The typical CL listing is a little overpriced. The listings priced at or below market are usually gone in a couple days, the overpriced ones just sit there.

Zillow rent estimate is another source to consider.

Submitted by MistaVista on December 30, 2016 - 1:02pm.

I work for a RE software company and can pull various reports that a top tiered PM company utilizes. Based on our data the average rent is about $2.07 per square foot in a 3 mile radius around college blvd and the 78.

Keep in mind this is an average across about 45 MF properties, from varying asset classes.

Submitted by spdrun on December 30, 2016 - 1:07pm.

That seems low -- means a 500-ish SF 1 bedroom would only get a grand a month?

How does it differ between unit types -- are rents per SF on 1 bedrooms higher than larger units?

Submitted by MistaVista on December 30, 2016 - 1:42pm.

Spd, pulled out the low end stuff to avoid seeing any sec.8,42. Only asset classes a-c in the average price per square foot now. the averages are below:

1bd avg $/sq ft. = $2.15
2/1= $1.65

Submitted by treehugger on January 3, 2017 - 2:44pm.

at $2.07/sq ft my 1300 sq ft condo should rent for $2691....if a 2/1=$1.65 what does a 3/2 condo=?

We had friends renting around the corner at the new Tuscan Villa style condos and they were paying $2700 for what I think was ~2100 sq ft and that place is ridiculously overpriced.

We are charging $1650 for a 3/2, 1300 sq ft, with single car garage condo, in a nice complex with a pool.

Realistically I think $1850-2000 is the target rental range.

Submitted by gzz on January 3, 2017 - 3:42pm.

You really cannot do a single rental price per square foot for rentals. 500sf 1 bedrooms will not be as low as 1000 very often, but most 1400sf will be lower than 2800.

A 2/2 will also rent for more than a 2/1 of the same size, and the gap gets larger comparing a 3/1 house with a 3/2 of the same size.

A private garage does not go into square footage but of course is a big advantage.

A lot of the official rent statistics come from large complexes that charge high rents to people with bad or no credit that small landlords usually avoid. They are different markets. They also do gimmicks like first month free or half off.

When I was in the rental market I was amazed how bad the values were in large apartment complexes.

Submitted by MistaVista on January 4, 2017 - 8:41am.

Keep in mind this is an average...the smaller the property the higher the price per sq. ft., as you get larger the price per sq. ft. goes down, all your really doing is pointing out the outliers of an "average". The reality is however the market price is what some one is willing to pay. I can tell you first hand I rented for a short term (6 months, so it was at a premium) in summer of 2015 in the same area (off college and Frazee) and I was paying $2300/mo. for a 2/1, 1000sq ft. with a single car garage and parking spot. The one caveat is that Oceanside is very spotty, if you go north of O.blvd on college there are great schools and it is a really nice area, while south of O. blvd tends to be worse schools and a lot cheaper.

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