How We Gonna Pay This Year's Rent? - a $250 a month increase!
I knew it was coming. But I didn't know how fast or how hard.
My rent increase letter arrived in my mailbox today. In its perfect off-white envelope adorned with the elegant and harmless-looking apartment complex logo, the contents inside were more like an offer of a boxing match where the mailer was allowed to bring guns and a knife. I would, of course, have to fight bare handed.
When I moved into my quaint Silicon Valley studio apartment two years ago, it cost me $905 a month, utilities included.
Last year, when they bumped the rent up to $1050 a month (still, with utilities included) I was tempted to leave. But around here, I had few options anywhere near as nice. I wanted to live alone - that's part of the problem. Still, other options for studio apartments that are cheaper than $1050 are, maybe, $900, and look more like a closet than an apartment.
Today's letter, I knew, held the answer to my question - will I have to move out this year or can I stay for one more year? The answer... I'm moving out.
The utilities are no longer "included" although they're offering $50 a month extra for them to be "included." That brings the total rent up to $1300 a month to get what I'm getting now for $1050. A $250 increase? Are they out of their minds???
No, they're just raking in the dough while plenty of people are losing their homes and the rental market is getting increasingly more squeezed. When my rent was $905 another company owned the apartment complex, in fact, I think it was family owned, so the rents were always reasonable. Then this big shot property management company came in, decreased the quality of life around here, and upped the rents. Gotta love capitalism and free markets, eh??
So... now I have to figure out what to do. To complicate matters, I'm leaving town for about a month at the end of May into June, which leaves me with about a week when I get back to find a new place.
The good news is that my friend has offered to let me stay with her while I look. So it sounds like I'll be storing my stuff in storage for the summer, living with my friend, and trying to find a decent rental in this painful renters market. I'm almost tempted to look into buying. It seems like a really good time to buy. I'm not sure I'm in the right part of my life right now to buy property, but gosh, if I'm going to really be spending that much of my income on housing, I might as well be putting it into something I'll own in the long run.
So right now I have about $25k for a down payment if I cash out my Roth IRA and all of my savings accounts. Of course that would leave me with no emergency fund - probably not the best idea. Perhaps I could convince my parents to give me a loan for a more enticing down payment, but I'm not sure they even have the money. Well, my dad will have the money in a couple of years when he can access his 401k, but he retired early and the money is apparently somewhat tight right now.
Do any of you think I should look into purchasing property? I'd probably want to buy a 1br condo - it seems to be in poor judgement to buy a studio (as I doubt it's easy to resell a studio.)
There's a lot I have to think about. I didn't expect such a huge rent increase. I thought maybe they'd bring it up to $1200 and I was going to deal with that. But $1300 a month? For a studio? For a fucking studio?
Seriously.
16 comments:
I am just waiting to see what my rent increase is going to be at the end of the summer. I'm expecting about a $200 increase, if not more. It's something I should be planning for.
That's C.R.A.Z.Y. ... for a studio! We pay less than that for a large two bedroom in the middle of San Diego.. Never again will I complain about the San Diego cost of living!
Good luck to you! .. If your going to buy my understanding is this is the time to do it... but I'm certainly no expert...
Enjoying your blog.. glad I found it.. :)
I can understand. I'm in London and my VERY SMALL 1 bed (couldn't find a studio aparently they are like gold!) is $1900 US a month, yes a month, NO bills included. As I had to start my new job I had no choice but to take it, but I plan to start looking in 3 months (it's a 6 months lease!) for a studio and hopefully I can get it down about £200 = $400 a month, but even that will be hard!!
Is $25k enough for a down payment in Silicon Valley? If you have $25k, you should only be buying 5 times that value, $125,000. That won't buy you a condo there, right? I only ask because DH lived there for about 6 years before we got married and said you couldn't touch anything for under $300k.
My rent was $1650 and they wanted $1800 to renew my lease, so I moved. Its terrible!
brooke - you can't buy anything in the Bay Area for $125. In fact, the bottom of the market is pretty near $350, for a tiny condo.
Yea - $25k is not enough for a down payment around here, as I understand it. That's why I think if I was to even consider buying I'd have to convince my parents to give me a loan - if they have the money - and I'd really promise to pay them back over time. I might be able to convince my dad to let me borrow some money, but I don't know if it would be anywhere near the amount I'd need for a down payment. Also, I'm just not sure I'm going to stay in this area for long - my boyfriend is considering grad school in NY for fall 2009 (yes, I'd be moving to the one place that's MORE expensive than silicon valley).
I just feel like now IS the time to buy... if possible. Rents are going up like crazy and home costs are coming down. The other option really is getting a roommate but... UGH... I don't want to get a roommate. :)
You're right, the resale value of studios aren't very good-- but the resale value of one bedrooms isn't that great, either. Just a thought...
That's ridiculous.. for a studio.
Sometimes landlords just squeeze and squeeze until they lose everyone/people start defaulting on rent before they learn their lesson
PS. Linking this in my next round of link love
A friend of mine threatened to move out when her rent increase was insane. The management company, wanting to avoid finding a new tenant who would actually pay rent on time, bartered with her. The increase ended up being far less than they originally proposed...
It's worth a shot.
Wow $250 a month is expensive and ridiculous given the way housing is at the moment.
Have you looked into buying foreclosures or auctions? It's very complicated and requires a lot of paperwork but there are bargains to be had.
The market's undergoing some turbulent times. Prices are going to come down because there's not a lot of demand and supply just keeps increasing if people continue to default.
Renting is getting more and more expensive, and for those of us with credit that's been trashed for whatever reason, buying is simply not an option. Unfortunately, these big-wig corporate management companies know this, and squeeze every dime that they're able to out of a person, which, of course, does a catch 22 - can't save, paying rent. Have to pay rent or no home to live in. The rent's too high, want to buy, but can't because there's no savings.
Ugh. Good luck with your troubles - I found you because apparently (gasp!) you link to me. So I'll add you into my reads and keep up!
Ugh. That sucks. I'm not sure where you live/work exactly, but I found Redwood City to be cost effective (though less charming than other areas) and I pay less than $1300 for a large 1 bedroom.
I was pissed when my apartment increased by $100/month...$250 is out of control!
Yikes.
For the record, I pay $1425/mo (no utilities) for a 500 sq ft "Jr one bedroom" (aka, glorified studio). But a $250 increase? That is a 23% increase!
Given that you may move out of the region some time soon, I'd look at negotiating the rent first. The thing about New York City is that there are expensive areas (Manhattan) and much cheaper areas if you are willing to commute. Average house prices are lower in metropolitan NY than in Silicon Valley. We pay $US1800 for a two bed room apartment (second bedroom is very small) here in Canberra, Australia... I moved here from upstate NY where I paid $600 for a 2 bedroom :)
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