I swear this system feels so rigged. You’re telling me if I want to live on my own in these apartments ranging $2000-$3000 I need to be making $6000-$9000 just to qualify? No wonder people still live with their parents even after 30+…
I swear this system feels so rigged. You’re telling me if I want to live on my own in these apartments ranging $2000-$3000 I need to be making $6000-$9000 just to qualify? No wonder people still live with their parents even after 30+…
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I guess if they aren’t able to find people to fill the apartments, they may need to drop that requirement. But many areas have a housing shortage, so they are able to find people
Wages are not stagnant, especially lower quintile wages have skyrocketed over the last 4 years.
Nominal wages
https://fred.stlouisfed.org/series/CES0500000003
Inflation adjusted
https://fred.stlouisfed.org/series/LES1252881600Q
Empathy isn’t part of a landlord’s job description. They don’t care about you. If you can’t pay, someone else will.
Many areas have an affordable housing shortage anyways, so if they don’t get it from one tenant, they’ll get it from another. What’s not affordable to one tenant is perfectly affordable to another
Exactly and only getting worse! Seems to be what the government wants. Own nothing so they can control everything and everyone
https://youtu.be/QarEi3YyQWs?si=pN5mCYEolOxfh669
“The faucets are dripping, the landlord’s content.
With every new tenant he raises the rent,
The buildings can crumble, the tenants can cry,
There’s a shortage of housing, you’ll live there or die.”
Supply and demand
When you see ads for the first month free, or they remove the requirement for the first, last and security deposit to just the security deposit, then you know a downturn is coming,
People who used to buy family/starter homes now rent. They would rather rent to a family with two earners and two kids than a collection of roommates.
I have gotten a pay raise every year since 2019. Not really seeing any stagnation in my chosen field of employment. I am an international freight forwarder and Customs broker for trade fairs and conventions and more. I also moonlight as a professional ukulele musician in Las Vegas and I am a Qigong coach too.
I’ve found my friends that rent have to constantly move to smaller homes, homes further out that are in cheaper areas, then eventually to homes in more and more crime ridden areas and many out of state to a cheaper city to live in. It’s been this way for the 30 years I’ve been paying attention to it. This isn’t really a new problem, this is the ongoing problem with renting. It’s the rent trap and cities have tried to place rent controls in areas to prevent it, only leading to the area going to crap from lack of landlord interest and investments.
3X rent income is a safe figure for actually receiving rent. Someone only making that is likely 1-3 missed paychecks away from missing their rent payment (generally speaking).
I’ve watched rents increase 5X on my street over 20 years whilst I’m 10 years away from paying off the fixed cost mortgage completely.
How do they expect to get that much? Not many places in the nation have much for rental vacancies. They are getting it for the most part.
Wages aren’t stagnant.
The roof over your head is probably the last thing you’re going to carve out of the budget, so there’s very little reason for rents to stay stable as other costs increase.
Housing is one of those things that everyone needs, and it has no seasons or anything, so land lords have complete control over it. You can move, but many can’t afford to move, or they would just be trading one shitty land lord for another, so many people have no recourse.
You as a single person may find it hard to meet those income requirements, but a couple with dual incomes (or a pair of friends) will easily be able to qualify for that apartment. So get started on finding a friend or a romantic partner, or a great-paying job.
Because most tenants easily cover 3x or 4x their rent payment.
Agreed but I think some places are changing that qualifier. Not sure though
Well, instead of living at home, so many have to live with roommates which is a different way of still having to live with other people instead of on your own.
Property owners really don’t care, as long as they get their money on the 1st.
Like anything else, it’s pretty simple supply and demand. We’ve had a shortage of available housing for about 20 years, especially in the bigger cities. Until the legal environment changes, permitting gets easier, and NIMBYs are declawed, it’ll remain that way.
FWIW this is happening across the English speaking world. I’m not sure about other countries, but in the US it’s largely due to abuse of regulatory changes put in 50 years ago to protect against reckless development. And it’s not just housing. We’re struggling to build transit and infrastructure as well, because the same entrenched interests abuse the laws.
Rent levels are not influenced directly by income levels. They’re influenced by supply and demand. Landlords charge the highest that someone is willing to pay, and if there is relatively high competition for a given housing unit they will charge as high as they think the highest “bidder” will pay for it.
Engage with your local and state level politicians and tell them to reduce barriers to housing construction. The only way out of the cost of living crisis is to build more housing.
Rent always goes in one direction – up.
Landlords may offer discounts, free months, perks, etc. but the rent always goes up. The only reason they don’t is when the economy collapses and buildings fall into foreclosure.
I think your phrase “if I want to live on my own” is more telling than the landlord’s stance. For decades people’s first apartments and rentals always had roommates. It allowed them to save a lot of money, and have a nicer place. I have noticed that a lot more people want to live by themselves, but bitch that it is too expense.
Source – I am a multiple property landlord.
Cynical many times renter and few times landlord here:
“Requirements” allow landlords to say no to everyone and make exceptions for whom they “like”.
This is very reminiscent of the paradox of the tariff plan.
This issue is the reason why my mom lives with me. She is on a fixed income, and as rent prices increased, it priced her out of qualifying for any apartment without a cosigner. The game is absolutely rigged.
Landlords should have the highest expectations possible when trying to run out their units. Any landlord is going to want a tenant who pays as much money as possible while causing the fewest problems possible. They’re able to do this because there Aren’t Enough options in housing to force them to lower standards or lower rent.
It shouldn’t be the case that government regulations make it more expensive to build housing low income Americans can afford rather than housing built to serve people with more money. No developer wants to build for people on a tight budget because it’s just as expensive for them to do that as building units they can sell to somebody with much more money to spend. If that were the only problem, we would see lots of middle class units being produced and they would move out of their current units which would then sell for less money. It wouldn’t be ideal because it’s like lower income Americans getting hands me down space, but it would still be better than our current system where we don’t make enough homes in general so even the homes people are moving out of for upgrades don’t have enough competition to force the existing home to lower prices.
Things like rent controls Can help in the short term Comma but their detrimental in the long term And simply not a solution Four lack of housing Supply In the places where people want or need to live
I imagine lots of people use their parents information to rent/buy like some people near me recently. Thought an old retired couple was moving in, because that’s who came thru with the realtor etc,but it’s their child that lives there.
Actually a lot of property owners have a lot of empty apartments and would actually need to lower the rent for it to be profitable, but they cant.
Rent for new tenants affects property value estimations.
Property value estimations affect loan conditions for banks.
This means if you only have one tenant paying 9k a month the bank often values the whole property as if every apartment in there was worth that much and assumes its securty for any mortage is high. The second average rent halves, property value halves and the bank notices its suddenly worth less than the loan taken out for it was. Then it will raise interest accordingly. Property owners know this and rather keep appartments empty than raising their interest.
This is a huge bubble and the second it pops, banks are going to default.
They don’t give a shit.
Welcome to income inequality. *Someone* can afford that.
Landlords are expecting that you make three times rent in income because they know that it’s a lot harder for the tenant to afford to pay rent if their rent is more than a third of their income. They want to avoid having tenants stop paying rent.
A lot of people either have partners or live in some form of sharehouse situation where they can pool multiple incomes together which can help make housing more “affordable”.
Landlords may also keep the property vacant rather than rent it out in some situations.
I have been telling my kids to live with us as long as they can stand to. I will charge them a fair rent that gets put away into a HYSA or CD until they are ready to buy a house. If necessary, I’ll buy them a house with cash and have them pay me back. The world has gone nuts with rent and landlords.
They are raising the bar for the quality of tenant. High earners = good tenants.
yall better start working 3x as much, 120hr work weeks incoming!
Before anything and i mean ANYTHING else be approachable. I couldnt tell you the number of times people asked me for help or threw projects/certs my way simply because they could talk to me.
The prices and risk management are there to incentivize people to build more housing. If you could build a building with new housing units, you’d make a killing AND everyone would benefit from more housing.
The problem is that local gov’ts make the process so ridiculously expensive that even with sky high prices there is no increase in supply.
Depending on where you live, you might compete with short term renting like airbnb. Also it’s simple supply and demand.
It’s basic supply and demand, enough people are making that income for landlords be satisfied.
Time to move to the Philippines and live our best lives.
Part of this is because many tenants do not pay or leave damages behind to the point where their property is a loss. A bad tenant costs more money than waiting longer to find a tenant who’s likely to pay on time and maybe take care of the place better
I feel you man, in Canada It feels super rigged. The whole landlord vs renter thing has to come to an end and the markets to be fixed. People should have a place to call home. I myself have been kicked out of my hometown because I can’t afford to live there. I pay 1600 a month for a studio and they’re increasing my rent by another $40 this year which is another $500 annually that I have to find. Owners and landlords are stripping renters of all they have.
Landlords would rather bleed money than rent lower. If they lower for one they have to do it for all. They rather die (I’ve seen it)
People get co-signers all the time.
In my experience, in both apartments I’ve lived in with my roommate (owned by corporate management companies), the application states that 3x rent is required. We applied anyway knowing our combined income did not equal 3x the rent, it was more like 2x. First apartment asked for a cosigner but no other problems. Second apartment, the one we live in now, didn’t ask for a cosigner or anything.
So I’m guessing it’s not a hard rule but they might ask you for a cosigner or something else to ensure you will pay the rent.
Landlords, being part of the parasite class, are detached from the reality of real people.
You can fit 3x the tenants to meet the demand!
Seriously though, we’re returning to the gilded age where tenement housing with multiple families per unit was the norm.
Cause they’re evil immoral people what do you expect
It is supply and demand. They are expecting someone to come in and pay that amount. If they have enough other apartments rented they can just keep the price high until someone comes along and pays it. In the case where there are plenty of vacant apartments, there could be manipulation of prices. At a certain point manipulation of prices fail and you will see a large drop in price. Vacancy rates in New York City are 5% which is way up from 2023 of 1.5%. I would not expect to see price stability until it reaches 7%.
Bro did u hear about them rent tarrifs 🙂
Like 8 years ago when I was renting a house, after the year lease was coming to a close they told me how much the rent would go up. I asked why it was going up. They gave excuses. I asked if I was a new renter, would this new price be what I get, or would I get what we started with. Their response, they can’t answer that question. I said, no thank you, I will find different living accommodations. Saw the neighbor like 2 years later. They told me the place was still empty. We liked the house well enough to stay longer, but the owner didn’t want to make money I guess. Just raise rates because many just accept it
Supply and demand.
In my city rent for a 1 bed apartment averages over 2500 if not more. Not many people that earn under 6 figures can live alone
It doesn’t change the need to ensure their tenants can reasonably pay the rent (and withstand economic issues like what you’re referring to).
If the requirement hurts their financials they’ll change them. Just like 10x rent isn’t the current threshold, it’s about finding an equlibrium.
It seems that you are competing with people with more income for housing. This is an indicator that the area in which you are living does not have enough housing supply. Vote for politicians that make it easier to build.
Because the algorithm told them so.
Not a joke.
RealPage dynamically prices those apartments based on flawed expansion only economic data, pushed into a pricing algorithm.
It has not taken into account political fluctuations, law changes, job loss, or even its own existence in the market, as a factor. So…line go up. Price gets higher. Every 8 months. Without question.
Even while thousands of apartment complexes sit half empty, the algorithm assures them that this is the best financial move.
We live in the dumbest of timelines.
They want to make sure people can make rent, and less than 1/3 of pre-tax income is in line with recommendations by budgeting experts or requirements to get a mortgage. The real problem is the actual rent is so high, not the 3x requirement. Unfortunately, that’s going to follow classic supply and demand: if there isn’t enough housing, and someone else can pay the rent with 3x the base income requirement, then they get the apartment, and you are S.O.L. As long as the apartments are filled, the renter has no motivation for lowering prices.
I ask myself this all the time. I have some long term tenants at a below market rent and all my friends are telling me how much more I can rent my houses for, and im sitting here wondering how the heck can people afford to pay $2000 or more on rent with their 40-60k/year jobs
Vast majority of economic answers are results of supply and demand matching, or not. In terms of apartments in cities in USA, landlords have all the power so they can put extra requirements, knowing they still get matches. The worst that can happen from their pov, is to get unreliable tenant.
There’s imbalance in nobody looking out for those who need place to live. Ofc naturally there’s only one fix for the situation: build more housing. Fuck the small minority that is loudly against it. Insane how they hold so much power.
I’m a landlord and I don’t set the rent price, the market does. When I look at buying a rental property I have an excel sheet and I put in the numbers and if it works, it works, and if it doesn’t, it doesn’t. Basically I get the rental comps in the area (this gives me a general idea of what it will rent for) and then I calculate how much I will spend on the mortgage, taxes, insurance, and maintenance (rehab costs can also be considered but I usually invest in houses that don’t need rehab). If I can rent it for more than those expenses then I will buy the property(depending on the price of the house is how much it needs to cashflow. No one is going to risk spending a million dollars on a rental property for a $5 return).
I can tell you right now that finding a house in my state that can cashflow is almost impossible. In RE investing there is a rule of thumb called the 1% rule. So in general if you want a good single family home rental property that has a strong cashflow you need to be able to rent it for 1% of the price of the home. So if you buy a $100,000 house you should be able to rent it for $1000/month and that will allow you to cover the mortgage, taxes, insurance, and maintenance. I haven’t seen a house for sale that meets the 1% rule since 2018. So I haven’t bought a new rental property since then. I’m 41yo so I bought all my investment properties between 2010 and 2017. I locked in 3-4% mortgages on all of them so I have a good competitive advantage. I can lower my rents lower than most so I can get higher quality renters.
Interest rates are higher than they used to be (still historically really low) so mortgage payments are a lot higher. Inflation also means maintenance is a lot higher. I replaced a roof on one of my properties for $7,000 in 2015, that same replacement would cost at least $12,000 today. These increasing costs are passed onto the renter just like tariffs are passed onto the consumer. I would literally never raise my rents if property taxes and inflation didn’t exist. If we actually had stable prices I could dial in the rent better which would be lower because rent also has to cover the uncertainty/risk caused by the govt constantly changing property taxes and printing money.
What people don’t realize is rents are a function of home prices. Just like dividends are a function of share prices. This is how all investments work. You invest X and you expect a return of Y. If the price for a share of coca cola goes up, you, as an investor, expect to get a higher dividend for that price. That’s basically your return on investment. Same with real estate. If ROI on one type of investment is higher more investment money will flow to that investment and less to the lower ROI investments.
I can’t as a landlord just arbitrarily raise rents because I am competing with other landlords for quality renters. Quality renters will move if the rents don’t match the comps. The market determines the rent. The biggest expense for a landlord is vacancy. If I miss one rent check because a tenant moved out, I just lost 1/12th of my yearly revenue for that property. So I want people to be long term renters in my properties. I have to keep my rents in line with the market or renters move out. It’s that simple.
Wages are not keeping up with house prices/rents so at some point landlords aren’t going to be able to find renters who can cover the costs of mortgage, taxes, insurance, and maintenance and then those investments are going to fail and those landlords are going to lose their investments. These things take time to play out but that’s what I see happening. I think we are going to see another 2008 style housing crash. It will probably be a lot worse than 08 because the size of the problem is a lot worse. The actual debt is higher.
Debt. The debt industry has sort of help establish that everything can and should be on a “recurring revenue” model – meaning we all pay for whatever it is, every month, forever.
This is the subscription model you’re seeing in some cases like even owning a car.
Better than you buying and owning anything, with no strings attached, you pay (supposedly less, which is the sell), every month. Yay!
This is what justified property taxes. This is why you subscribe to music and video streaming services (consider, what if you don’t watch anything on Disney+ for a month or two, which happens to me. Why am I still paying for it??)
So landlords, realizing this, rationalized than you have to pay for somewhere to live, so why not just keep pushing people to pay more – people must.
It’s not tied at all to income or inflation, and in a sense, it’s not even free market capitalism, because the cost of a home, plus insurance, plus taxes, is also going higher, as Cities (zoning laws, etc.) all support and enable home ownership to result in the same — more and more recurring revenue, to the City, to insurance company, to mortgage bank, forever.
Meaning what? How can I say it isn’t free market capitalism?
What’s our alternative? We don’t have a choice.
No choice = not a free market.
Yes, it is driven by greed but the real cause is that lawmakers are enabling that we don’t have alternatives to anything but pay every month. And that enables everyone to creep those rates up, until we break.
You can literally look at streaming media as the same situation. Netflix, once, was affordable and sufficient. No ads, no insane cable-TV-like rates. But then license owners realized they were missing out… They pulled out of Netflix to launch their own apps/channels. All still affordable, technically. But then they creep rates up… They add back advertising, which you can get removed, just “pay more.”
And we don’t have a choice, we don’t have an alternative… Torrenting is illegal. We don’t have a choice.
Incongruent comparison, you’re looking at macro data and expecting landlords who only care about micro data to base their decisions on it
A landlord doesn’t care if his rental units are unaffordable for the average/median person in the US, he only cares if his rental units are affordable for enough people in his local market that he can rent them all out. If he’s in a town with 100 people of which 20 are financially sound and 80 are struggling and those 20 are all competing for only 18 top-of-market housing units that he owns, the rent price is going to go up until less than 18/20 are willing to pay what he’s charging. He doesn’t care about the other 80 people in the town, they’re not his customers
They expect you to eat less, at stop paying for Netflix
It’s actually better to keep the property empty than to run the risk of renting to someone who can’t pay. For example, it’s almost impossible to evict someone in LA city or county unless they are behind. If the property is rent controlled, then nobody will leave willingly. Even if they don’t pay, you will looses at least 6 months of rent due to legal costs and time it takes to evict someone. I have heard someone who looses a year worth of rent to evict tenants. The more difficult they make it to evict someone, the higher the requirement would be.
Owner has to pay property tax and insurance let alone mortgage.
It is rigged
Many folks do not realize, but there is a literal system that calculates rent capabilities. From there, others may attempt to mimic it. The system will calculate what the landlord can charge and what rates are correlated with high recuperation costs.
Basically, the lower the rent cost, the higher the chance the landlord will get stuck with heavy repairs.
Fill it with 20 Indian men that work at Tim Hortons. Problem solved.
It’s to ensure that they have tenets who will consistently pay their rent. Rent is considered “affordable” when it’s around 1/3 of your income, which is obviously going to be vastly different numbers depending on your income; someone will be able to afford that $3K/mo one-bedroom apartment, but they’d have to earn $108K a year to qualify ($3k/mo -> $9K/mo income * 12 = $108K/yr).
Granted in that example there probably aren’t a lot of single people with $100K+ annual incomes, but for a couple willing to share a bedroom that’s far more doable. Or siblings, or just roommates if times get desperate enough. They don’t want people who make $4K/mo in a $3K/mo apartment because literally anything happening at all will cause late rents and potential evictions, and the entire point of being a landlord is easy money with minimal work.
This is the closest I’ll get to landlord apologia though. They’re still mostly lazy assholes taking money for basically nothing in return aside from “I hold this magic piece of paper that says you have to give me whatever money I ask for or you can go be homeless”
I am begging y’all to join tenants unions!!!! Few other causes unite as many people across political spectrums, income levels, professions, gender/sexual orientations, age, etc towards real class consciousness.
You may have many differences with your neighbors, you may even hate them, but if you live in an apartment the one thing you do have in common is you all have to pay rent, and knowing landlords that rent is not cheap. Knowing landlords, it gets raised every year, you get charged for bullshit amenities that nobody asked for while maintenance requests go ignored, and by the time you are actually priced completely out of your unit, they give you the run around about returning your security deposit. With a tenants union you can organize to get better living conditions for yourselves, faster maintenance responses, even LOWER rent!
I promise your annoying old MAGA neighbor will be much less annoying when he doesn’t have to worry about how he’s going to afford a 100% rent increase while living on a fixed income. Through organizing together around your common concerns, he will be exposed to new ways of thinking and deconstruct biased views that he’d never bothered to challenge before because he had never actually interacted with people of color or gay people or trans people or leftists before and just believed what he heard in his echo chamber.
Landlords are a parasitic class. Already they are foaming at the mouth to raise rents, even as our economy is in a tailspin. By every indication we are heading towards a recession, maybe even a depression, and the working class, as always, will get fucked first and fucked hardest.
And why wouldn’t they raise the rent? Why wouldn’t they demand 3 or 4 times the income, or $150 monthly parking fees, or $50 monthly pet fees, or trash fees, or anything else they could possibly think of to extract more and more money from you? They’re absolutely right, where else are you going to go? It’s either you pay the rent or you’re homeless at a time when being homeless has been criminalized in many places and the government is hell-bent on slashing as much social spending as they can.
Landlords do not care about this reality. They welcome it with open arms because they know that this recession is going to make them millionaires. Landlords have no empathy for you and would see you and your grandma and your babies on the STREET before they’d ever entertain a loss of profit.
But there are more of US than there are of them. The only way we are going to get through this crisis and come out the other side intact is by standing together in solidarity with our communities against these unethical practices. We can either sit here in take it or we can fight back.
Wages aren’t stagnant, they’re increasing at a higher rate than inflation https://fred.stlouisfed.org/series/LES1252881600Q
Rent/housing is included in this calculation
Taxes are crazy high suddenly. My taxes went up 70% but my salary is the same, so unfortunately my re terms share sone of that cost. It’s the only way I can make it work without losing money
They can write off the loss. Also, they’re for the most part, greedy pieces of shit that use algorithms to fix rental rates.
They rent the same shitty house to a richer person who can barely afford it instead of some place good.
Greed
It’s insane in Cali too, 3x rental income, background check and credit check, application fee of $30-60, applications are only good for 30 days, then need to reapply with another application fee.
Did that for four months and gave up and stayed in my shit apartment.
Easy- simple greed. Rent never seems to actually reflect value or need, it’s whatever fills enough units to make their paycheck hit big.
I’ve even read they keep a few units empty on purpose, to constantly check how much people are willing to spend.
They also all collude, so getting a decent pride is harder than it would be. They organize to charge more. Especially through Zillow and all those sites.
Food or rent? Decisions, decisions. People can always buy ramen noodles in bulk I guess.
> No wonder people still live with their parents even after 30+…
Or they have roommates. You’re stuck on expecting to live on your own. That’s not realistic for everyone.
I’m so happy my apartment only went up $20 in rent 😭
Cause they’re fucking delusional
It will go down.
We are still seeing just how hard you can be squeezed before you burst.
There will be a limit because you can’t spend money you literally don’t have but they will probably find a way around that.
That’s why credit exists after all.
rent in my city is actively dropping, and they’ve lowered the income requirement. They also stopped requiring up front security deposits – the offer a “jetty program” where you pay monthly, like $7, you just don’t get that money back when you move out. The city is hurting really on filling apartments and rentals. My rent dropped $150/month at my renewal earlier this year
They’ll let it sit. reading r/landlords is like “fuck everybody who has a credit score under 650 and doesn’t make $60000 a month, we don’t want those POOR CRIMINALS in our shit”
Landlords are evil.
There’s enough people who make the income that LL can do what they want. The harsh reality is, they don’t care if you specifically can afford it, they only care that someone out there can.
The more dense the population in the city, the more demand that drives up the price.
High demand for housing is a factor. Also people have to live somewhere. Some folks make decent money and aren’t ready to buy or don’t want for various reasons.
It’s because the ownership class isnt smart, they’re greedy. And they vote for people that are like them. Stupid and greedy.