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Increasing rental rates becoming normal again

System - Friday, January 30, 2015

Over the last eight years, one of the last things Las Vegas property management companies were telling our residents was  “Your renting is increasing by X%”. Many of our clients found it upsetting to see rental rates stay flat or declining up to 20% here in the Las Vegas Valley. But that time has come to an end in many markets across the country.

With Las Vegas home prices increasing over 30% in the last 18 months, and double-digit numbers across the country. The great recession has come to an end in many cities, which has enabled property managers’ landlords, and investors to begin raising rents.  While this is a positive movement for Las Vegas property managers, our residents have not been so receptive to the rent increases.  At Robinson Realty and Management, we strive to communicate these rental increases in a positive way. Backing up our rental increases with recent rental rate data in the various neighborhoods is just one of the verifications we provide to our residents. Prior to the great recession, getting a 2 to 3% annual rate increase was standard. This covered the property tax and other various expenses that landlords are responsible for paying. This is not a penalty of any sort, simply an increase to offset inflation.

The best way they resident can minimize these increases is to show their property management company or landlord the value they provide. The most important is timely rent payments! When they resident has a sketchy payment history, this costs the property management company and owners additional money in chasing down the rents. The second biggest evaluation point that property management companies look at is maintenance costs. If we find that the resident has a repair request every month, this adds to the bottom line cost for the owner. With severe cases, many landlords will not renew the lease and simply look for a new resident. At the end of the day, rental properties are a solid investment. And there are many ways to analyze this investment, and increasing the rent a few percent annually is the number one way to offset inflation and continue to bolster your investment returns.