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HMW #158: Thank Your Landlord for Raising Your Rent

alan corey house hack how to start new investor real estate 101 wait to buy? Jun 20, 2024

Read Time: 5.5 minutes

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If you are a renter and your landlord raises your rent, your first reaction might be anger and name calling. But what if the landlord was actually making you happier by raising your rent?

That's right, you might want to rethink those double birds flown at your landlord or property manager as we are going to cover three ways that raising your rent will make you say "thank you" to those property owners.



Possibly, but I'm a glass half full type of guy and you will be too by the end of this blog.


Reason 1: You live in reality paying market rent


Nobody wins living in a bubble. If you are severely under market rent long enough you will find yourself in a golden cage situation. This is where you have built a life in a neighborhood you can no longer afford and moving would require uprooting your life and skipping town.

So instead, you suck it up in a house that doesn't quite work for you. You struggle to connect with the newer neighbors settling in from a different income bracket. Your neighborhood is changing but you aren't. And to preserve your golden cage status, you start holding back on quality of life requests to the property manager in order to keep flying under the radar.

You are trapped in your successful low-rent housing situation but start wondering if it's worth it to save a few bucks. The answer will always be yes as makes sense financially. But your happiness suffers with this choice as well.



Oh it's Logan Roy, the beacon of happiness we all should strive to emulate!


Reason 2: No explosive exit when reality punches you in the face


Let's say you have the coolest (or most likely checked-out) landlord in the world and she doesn't raise rent for 5 years. You gloat to your friends that you are still paying $2,000 a month when everyone else is paying $3,000 a month for the same unit in your building.

Guess what, that landlord will eventually send you a sticker-shock inducing rental increase when one of the following happens:

  • The building is no longer profitable after taxes and insurance cost skyrocket
  • She hires a property manager incentivized to make the building as profitable as possible
  • She must improve or modernize the property to attract new tenants or keep existing ones
  • She prepares to sell the property and needs it at market rents in order to get top dollar

Of course you don't realize why any of these is necessary. Instead your cool landlord becomes enemy number one because she finally sends a $1000 a month rental increase and you tweet out "MY GREEDY ASSHOLE LANDLORD IS THE WORST!"

You now have to move to a new part of town because you have been living an fictional lifestyle with your temporary low-rent situation and you will be sour for years to come having been thrown into a new way of living. All your positive memories wiped away when you reality finally punches you in the face.



I know I haven't won you over yet, but there is one more real reason to thank your landlord for raising your rent.


Reason 3: You become motivated to buy


You know your rent will always go up.  Each year you say, "I'm going to save and buy my own place next year." You have this self pep-talk enough times you finally act on it. And when you do, you'll say, "Thank you Landlord, this is the push I needed!"

You are now ready to start your journey of home ownership, maybe in a small multi-family househack! What follows is catching the resl estate bug when you see your net worth and cash flow increasing each year. Now you tweet out "I SHOULD HAVE STARTED BUYING REAL ESTATE SOONER!"

We all go through this cycle and it takes all those faux-greedy landlords out there to make you drink the kool aid too. Not only do your finances improve, but so does your happiness.  And then what do you have to say to your old landlord when this happens?



That'll work. Welcome to the first step of the property ladder, you're going to love it!


In other words:

  • You don't control your monthly payments renting
  • Raising rents does not necessarily mean your landlord is profiting more
  • Waiting to buy is a lesson we all learn the hard way

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