The Lowdown on Rent Going Up
December 16, 2014
This month’s blog is written by our owner, John McKenzie.
As owners and managers of apartments we are frequently asked, “Why do rents go up when our lease is renewed”? Interestingly people rarely ask other businesses why their prices go up. Maybe it is because rents are frozen for the term of your lease so it has been a year since the last adjustment. Restaurants, grocery stores, gas stations, and entertainment facilities may adjust up and down daily or weekly so it is less noticeable. Maybe it is because housing is a big percentage of your cost of living so it is a big concern. For whatever reason, this is the case. We want you to know we are sensitive to your concerns and want you to understand that we do not raise rents to be unfair and without a lot of reason and thought.
I think it would be a surprise to most residents how much of their rental dollar goes into operating the property and how small a part of the overall revenue is profit. Each year our costs go up and unless we recover enough to of that in increased revenue, the property will deteriorate. We have made a commitment to our residents to keep up a standard of quality in our properties that will make them proud of where they live and satisfied that they are well taken care of. That means substantial costs for general repairs, adequate and responsive maintenance staff, snow plowing, landscape and gardening, property management, water and sewer, common area gas and electric, asphalt and concrete repairs, upgrades to fitness facilities, painting, cleaning, contract services and so on. Other major costs include insurance, property taxes, and debt service.
Yes this is a business with an objective to make a profit, like any other. I won’t pretend that we do this for free, but I hope you understand that it, too, is a competitive situation. You have in your favor many apartment properties competing for you. We all want you, so you do have control. If any one of us gets out of line and charges too much, or does not deserve the rent they charge by failing their duty to fix up the property and respond to your needs, then you will move on.
I hope you feel confident in the choice that you have made to live in a McKenzie Apartment Company property. I want you to know I respect and value your trust in us. We will not be the cheapest option, but I am confident that if you research the market you will determine that we are a good value. You will see that we maintain the property and and place high value in our management so that we can earn your respect.