House Rental Question (1 Viewer)

[Cjw_55106]

We are looking to rent and found a decent house. I think its overpriced for the neighborhood, but thats my only complaint. I asked the guy about lowering the price for a 24 month lease. I've never rented before, but from best I can tell, the longer the lease, the better price you get. Is that not the case? He actually wants to raise the price for the second year, which threw me off as I already thought it was on the high side.

The long and short of it is, he changed the prices, but ultimately, we pay the same over the two years (less to start, but goes up every six months). Basically what I asked for comes out to be a 6% drop in the advertised price.

So, my two questions:

Am I wrong in expecting a better rate for 24 months than a 12 month lease?

If you are the owner, is a 6% drop worth not having to go through more showings and possibly a house sitting empty?

Side note: If the house was empty for two months in the next 24, he already lost the financial break I was asking for.

 

[Bucky86]

If he doesn't need the money, then its not in his best interest to lock in a cheaper rate for 2 years. It can also be helpful for you to have a fixed increase as opposed to waiting to see what the market is in two years. What if rents increase 30%?

 

[Cjw_55106]

Thanks for the reply Bucky. The house has been empty since at least November, which means he's lost the difference between the cheaper rate and what he's asking already. Not sure what you are getting at with that. Whether he "needs" the money or not, he's losing out each month it doesnt have a renter.

And yes, I will have a fixed rate whether its a fixed increase or the same rate throughout.

 

[fatguyinalittlecoat]

We have negotiated our rent down by agreeing to a longer lease. Your instinct is a good one, but maybe this owner felt confident he could get the rent he wanted.

 

[Bucky86]

Thanks for the reply Bucky. The house has been empty since at least November, which means he's lost the difference between the cheaper rate and what he's asking already. Not sure what you are getting at with that. Whether he "needs" the money or not, he's losing out each month it doesnt have a renter.

And yes, I will have a fixed rate whether its a fixed increase or the same rate throughout.

Is the house paid off? Then he doesn't NEED to rent it out immediately. He can afford to wait for a renter to pay his asking price.

I get that he's "losing" money, but if the rent he is asking for is $1,000 and you offer $800 thats a loss of $200/month x 12= $2400.

So, if it sits empty for 2 months thats $1,600 you wouldn't have paid him, but let's say he gets his $1,000/month 2 months later, thats $12,000/year minus his 2 month loss which gets him $10,400 as opposed to your $9600 for 12 months.

I think my math is correct? let me know if I'm wrong, but thats my assumption

 

[comfortably numb]

Thanks for the reply Bucky. The house has been empty since at least November, which means he's lost the difference between the cheaper rate and what he's asking already. Not sure what you are getting at with that. Whether he "needs" the money or not, he's losing out each month it doesnt have a renter.

And yes, I will have a fixed rate whether its a fixed increase or the same rate throughout.

Is the house paid off? Then he doesn't NEED to rent it out immediately. He can afford to wait for a renter to pay his asking price.I get that he's "losing" money, but if the rent he is asking for is $1,000 and you offer $800 thats a loss of $200/month x 12= $2400.

So, if it sits empty for 2 months thats $1,600 you wouldn't have paid him, but let's say he gets his $1,000/month 2 months later, thats $12,000/year minus his 2 month loss which gets him $10,400 as opposed to your $9600 for 12 months.

I think my math is correct? let me know if I'm wrong, but thats my assumption

Yes...but more than that.He has taxes, utilities and insurance he is paying when the house is vacant.

He may just want what he wants.

Once the deal is set, legally he is only allowed to increase the rent each year by a certain %.

Maybe he doesn't like something about OP that is making him stick to his guns?

Marginal credit

Pets

Lots of kids

He was wearing crocs

 

[jon_mx]

If he doesn't need the money, then its not in his best interest to lock in a cheaper rate for 2 years. It can also be helpful for you to have a fixed increase as opposed to waiting to see what the market is in two years. What if rents increase 30%?

30% increase? That is crazy.

 

[sbonomo]

I never sign a multiple year lease with my renters because I want to reevaluate the rental market every year. Honestly rental rates have been increasing every year. I would never be locked into a multiple year lease.

 

[Cjw_55106]

Thanks for the reply Bucky. The house has been empty since at least November, which means he's lost the difference between the cheaper rate and what he's asking already. Not sure what you are getting at with that. Whether he "needs" the money or not, he's losing out each month it doesnt have a renter.

And yes, I will have a fixed rate whether its a fixed increase or the same rate throughout.

Is the house paid off? Then he doesn't NEED to rent it out immediately. He can afford to wait for a renter to pay his asking price.I get that he's "losing" money, but if the rent he is asking for is $1,000 and you offer $800 thats a loss of $200/month x 12= $2400.

So, if it sits empty for 2 months thats $1,600 you wouldn't have paid him, but let's say he gets his $1,000/month 2 months later, thats $12,000/year minus his 2 month loss which gets him $10,400 as opposed to your $9600 for 12 months.

I think my math is correct? let me know if I'm wrong, but thats my assumption

Yes...but more than that.He has taxes, utilities and insurance he is paying when the house is vacant.

He may just want what he wants.

Once the deal is set, legally he is only allowed to increase the rent each year by a certain %.

Maybe he doesn't like something about OP that is making him stick to his guns?

Marginal credit

Pets

Lots of kids

He was wearing crocs

Once a deal is in place, rent can be raised? I had no idea.

 

[comfortably numb]

Thanks for the reply Bucky. The house has been empty since at least November, which means he's lost the difference between the cheaper rate and what he's asking already. Not sure what you are getting at with that. Whether he "needs" the money or not, he's losing out each month it doesnt have a renter.

And yes, I will have a fixed rate whether its a fixed increase or the same rate throughout.

Is the house paid off? Then he doesn't NEED to rent it out immediately. He can afford to wait for a renter to pay his asking price.I get that he's "losing" money, but if the rent he is asking for is $1,000 and you offer $800 thats a loss of $200/month x 12= $2400.

So, if it sits empty for 2 months thats $1,600 you wouldn't have paid him, but let's say he gets his $1,000/month 2 months later, thats $12,000/year minus his 2 month loss which gets him $10,400 as opposed to your $9600 for 12 months.

I think my math is correct? let me know if I'm wrong, but thats my assumption

Yes...but more than that.He has taxes, utilities and insurance he is paying when the house is vacant.

He may just want what he wants.

Once the deal is set, legally he is only allowed to increase the rent each year by a certain %.

Maybe he doesn't like something about OP that is making him stick to his guns?

Marginal credit

Pets

Lots of kids

He was wearing crocs

Once a deal is in place, rent can be raised? I had no idea.

Once your lease expires it can be.He may want to be a higher rate now instead of working his way up to what he initially wanted 2 years ago.

 

[avoiding injuries]

Speaking as a landlord, I would do the 6% decrease for a 24 month lease, assuming one month vacant after 12 to re-rent. How is your credit?