Are you facing a major rent increase? Many renters around the nation are seeing rental rates increase, often faster than their salaries. From the red-hot markets across Florida and other major cities to rentals in more rural areas, prices are increasing at rates that aren’t expected to slow down any time soon. Learn more about the current state of rent and how you can respond when your landlord tries to increase your rent.
Expect More Rent Increases in 2022-2023
According to the Realtor.com Rental Report, the average rent as of April 2022 is $1,827 per month. For new renters, however, the rate is likely to be even higher. Rent prices increased 16.7% between April 2021 and April 2022 across the nation. And that's the average - some cities, notably those in the Sun Belt region, have seen rent increase by 30% or more in a single year!
Unfortunately, rent hikes aren't projected to stop any time soon. Economists from Realtor.com predict an average rent increase of 7.1% in the next 12 months, so you can expect even higher prices moving into 2023.
Cities Where Rent Has Increased the Most
Real estate in major cities is typically more expensive than in smaller cities or rural areas. So it only makes sense that places like New York City, San Francisco, and Boston still have the highest rent in the country. Over the past few years, however, there has been a significant increase in rental prices across the U.S. in cities big and small.
According to a study by Insurify, of the top 20 cities with the greatest rise in rents, only one - Miami - is also on the list of cities with the most expensive rent.
Here's a look at the metro areas that experienced the biggest increases in rent between 2021 and 2022:
- Naples-Marco Island, FL: 51.6%
- North Port-Sarasota-Bradenton, FL: 46.5%
- Port St. Lucie, FL: 40.4%
- Cape Coral-Fort Myers, FL: 38.6%
- Tampa-St. Petersburg-Clearwater, FL: 30.7%
- Miami-Fort Lauderdale-Pompano Beach, FL: 30.6%
- Lakeland-Winter Haven, FL: 30.2%
- Crestview-Fort Walton Beach-Destin, FL: 29.3%
- Orlando-Kissimmee-Sanford, FL: 28.3%
- Waco, TX: 27.8%
If you live in one of these cities, or are planning a move, you’ll need to be creative to find affordable housing. Review the causes of these and other rent increases and what you can do about them.
Why is Rent Going Up?
Real estate prices have increased around the nation for a number of reasons. More expensive properties mean a larger investment for landlords and higher costs for your lease. A few of the most significant reasons why prices are increasing are a shortage of houses, changes in the work environment, and relocations due to the COVID-19 pandemic.
Shortage of Houses
People aren’t building houses like they used to. Not only are building materials increasing in price, but there is a shortage of construction labor, according to Freddie Mac. Entry-level home construction, in particular, has decreased significantly since the 1970s.
Because there aren’t many single-family homes at entry-level prices and sizes, there is an increased demand for rental units and an increase in real estate costs for landlords.
Work-From-Home and Nationwide Relocations
Since the start of the COVID-19 pandemic, a large number of Americans have started working from home. Approximately 26% of the workforce continue to work from home, whether by choice or as required by their employer. Because of this, many residents of large cities are choosing to move to areas with better weather, more affordable cost of living, and lower taxes.
Another driving factor is the popularity of relocation incentives offered by cities and states all over the country. These programs are designed to attract talented professionals, especially those who work from home, by paying them to move.
Florida and other areas, like Austin, Texas and Portland, Oregon, are seeing huge increases in demand for rental units. People relocating from major cities are also bringing along their salaries, which are typically higher than those in less populated areas. An increase in demand typically means an increase in price, which makes it difficult for local renters to compete. This can lead to gentrification in lower-income areas as landlords seek to attract higher-paying renters.
How to Respond to a Rent Increase
If you’re a renter and are concerned about the future of your rent or are struggling to find an affordable rental, you’re not alone. Don’t let high rent prices stop you from finding a safe and comfortable home. Find out what you can do when your landlord raises your rent, from negotiating your lease to moving across the country in search of a better housing situation.
1. Prepare for an Increase
As a renter, you should prepare for a more expensive lease in the future. If you’re living in a rent-stabilized or rent-controlled apartment, then there are restrictions on what your landlord can do and how much they can increase your rent. Unfortunately, for typical rental situations, your landlord can usually raise the rate as much as they see fit.
Thankfully, you typically have some time before you have to worry about an increase in rent. Landlords can’t increase rates in the middle of a signed contract, so you can continue to pay your monthly rate until the end of your lease. Landlords in most states have to give you a notice 30 days or more before you’re required to pay an increased rate.
2. Talk to Your Landlord
It never hurts to communicate with your landlord. Some apartment complexes are run by large leasing companies that are unlikely to take the time to negotiate, but an individual landlord might. Try to schedule a meeting with your landlord to talk about any potential increase in rates. Mention the benefits of keeping an existing tenant and how you’re an excellent example of a good tenant.
If you aren’t able to negotiate, then it may be time to look for a new apartment. Your landlord is one of the people to notify before you move, so review the list and prepare to pack up your belongings.
3. Discuss Longer Lease Options
A longer lease term gives your landlord peace of mind knowing you’re going to stay for more than 12 months. Retaining the same renters means less work cleaning a rental, reviewing new tenants, and signing new leases. A commitment of 18 months or two years also helps you lock in a rate for a longer period of time.
4. Ask About Prepaying Your Rent
Another negotiation strategy to avoid high rent prices is to ask your landlord about prepaying your rent. As long as you’re financially able to do so, try offering two or three months as a prepayment. This helps your landlord feel confident about upcoming payments. Since almost 20% of renters are behind on their payments, you can set yourself apart by being ahead of the game.
5. Research Your Rental Options
Your landlord is facing rising real estate expenses and other issues as well, so there may not be anything you can do to avoid an increase in rent. If the increase is more than you can afford, then it may be time to look for a new rental unit. Whether you’re planning on moving into a condo, a townhouse, or a basic apartment, it’s important to research your options carefully. If you have the ability to move, consider the five most affordable cities for rent, according to Earnest, as of 2021:
- Lincoln, Nebraska
- Kansas City, Missouri
- Glendale, Arizona
- Memphis, Tennessee
- Toledo, Ohio
You can also check out other neighborhoods in your area to find a new rental that’s more affordable but still in a safe location. Consider your commute distance and look for a rental that’s a similar distance to your workplace.
6. Avoid Paying for Unused Amenities
As you search for an affordable apartment, keep in mind that amenities can add up. A pool, gym, or personal parking space may be great benefits, but they can also increase your monthly rent. Avoid high rent rates for amenities you aren’t likely to use.
7. Look for a Roommate
If you’re moving on your own or have a spare bedroom, consider looking for a roommate. Multiple renters can split the costs to find an affordable place to stay. Carefully vet your roommate and look for someone you can trust to make timely payments.
Explore Moving Options With MovingLabor.com
Don’t let high rent keep you down. Find out how MovingLabor.com can help you move to an affordable apartment. Whether you’re moving across the nation or across town, see how it works today.