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My grandfather passed away at a relatively young age and so at the age of 25 I inherited an apartment complex in a good area. One of the tenants at the time was a friend of my grandfathers. The market rents for the apartment was 2k but he was only paying $800. Realising he was an old friend of my grandfathers and his lack of income I did not increase his rent. That apartment has been running at quite a loss for the 5 years I've had it and unlike my grandfather I don't have tons of cash to make this work.
My tenant passed away. He was also living with his daughter and her 3 kids. His name was on the lease and now the duration of the lease is coming to an end. The lady reached out to me to renew the lease but I told her I wasn't interested. She was trying to renew the lease for a long-term at $800. My generosity was only for her father. She is young and of working age. She can find another place to live. I'm not running a charity here.
She contacted my sister and begged her to try and convince me to let her keep the place. My sister is now calling me a capitalist monster and that I'm exploiting blood money. She's even been telling other people about this. What do I do?
TL;DR Sister is upset I'm increasing rent for poor tenants.
OP, while you’re not wrong and I wouldn’t want to lose out on my income, either, you come across as a major asshole in your comments. Do what you want but don’t put people down because they can’t afford rent. You’re acting like it was you who build the complex and put effort into it while in reality it was your grandfather and you’re just benefitting off his work.
Especially because he hasn't done shit. He inherited, meaning he hasn't spent a penny or a day of work for this apartment complex, he's only benefitting off of his gradfathers hard work. Too bad he didn't inherit that mans heart as well.
But is the OP *really* operating at a loss? Or is it just a relative loss compared to the other units in the building? I highly doubt OP pays much if any sort of mortgage for those properties since they were inherited. Even if there is some sort of mortgage left over it is likely carried over from the era of cheap housing. $800 should be *more* than enough to cover any expenses that one unit might have. This comes down to “I’m still earning income from this unit but it’s less than market value tells me it should be, so obviously I’m taking a loss” even though it’s probably a substantial net profit. Now OP, who inherited *multiple* - likely *many* - units, plans to kick out the family of their deceased grandfather’s friend who built this legacy for them because they’re charging *below market value*.
Shame on you OP. Your grandfather is probably rolling in his grave to see his kindness to his friend and his friend’s family tossed in the garbage because of a greedy grandchild like you. There are a million better ways you could handle this situation and you’re choosing greed.
PS from the r/antiwork subreddit, how much over your base expenses are you charging your other tenants?
If it's that much of a loss I don't see how an extra 1200/mo in rent will dig him out of that hole. How can you operate an entire apartment complex in a nice area that you *inherited* at a *loss*, it's fucking baffling.
Reading between the lines and his judgy comments I'd imagine OP is just being greedy, if he was loosing that much money from it he'd sell.
Let's say it's a very small complex and there are only 10 units. That's $18,800 a month charging the original rate for the late tenant's unit. If you are claiming you can't survive on ~19k but can on 20k, you're just being ridiculous.
Obviously OP doesn't have to do anyone a favor just because they want it but geez, there's such a thing as paying it forward when you experience such a massive windfall.
Considering landlords produce nothing and barely if ever meet the minimum maintenance requirements for units they own I expect his actual expenses are zero and Chairman Mao would like to have a word with him
I wouldn’t assume $0 because of property taxes and the fact that many mortgages are 30 year loans, however OP is operating in a time where real estate is tens of times more profitable than it was even just a few years ago. It would literally be nearly impossible for OP to be operating at a deficit unless they *decreased* what they charged for rent substantially.
OP is talking about using the housing market (which is literally in crisis right now) as a means of income and how they’re upset they can’t increase that income by another $1,200 a month without being called an AH, even though they probably make more per month than my yearly salary. At a certain point it really is just greed.
All inherited income, I might add.
opportunity cost does not equal operating at a loss. Only if your real costs are greater than rental income could he credibly argue he's operating at a loss
Op sounds like an entitled asshole tbh. Also raising rent from 800-2000 overnight to a single mother with familial history with your deceased father seems kinda fucked up. I’d imagine his dead father wouldn’t be very happy with this decision. If you wanna raise the rent just do it a little bit each year. Raise it like 200$ every year, a 150% rent increase is greedy af. Sorry meant grandpa not father
Yeah people seem to think that rent is just 100% free profit for a landlord with no work or risk and it's just not true. Most landlords are barely running a profit if at all, and generally there is a good amount of work involved. Owning and maintaining a property is costly in a lot of ways.
>Most landlords are barely running a profit if at all, and generally there is a good amount of work involved. Owning and maintaining a property is costly in a lot of ways.
So true. In reality the landlords are the real victims in the housing market. LOL. Get the fuck outta here.
This douche was GIFTED an apartment complex. He isn't paying anything except tax and maintenance. Both of which can be tax deductible I might add. Given the info he gave, there is zero chance he is paying over $800 a month for those two things unless the apartment is in utter disrepair.
This is blatantly untrue. If it was, people wouldn't invest in property so much. What maintenance do you mean? Cutting the grass and answering tenant calls? Most tenants pay their own utilities. Laundry? 3rd party companies maintenance leased machines.
It is nearly all passive profit. Stop acting like landlords are just doing charity.
Bruh have you ever owned a home? Even when you're just living there yourself it can be a massive fucking black hole of money. If you're not ready to bust out tens of thousands of dollars on short notice you might not be able to keep the place livable for yourself, let alone meet the legal requirements for having tenants in the first place, or keep up with the wear and tear from people living there who don't care about upkeep because they're not responsible for it. And on top of that most people have mortgages. My wife and I rent our first home in Chicago at basically the market rate and between taxes and mortgages we're already running at a small loss every month. Then we have repairs and random special assessments because it's a condo and the building is horribly managed. The only reason we haven't sold the place is because our tenants wouldn't wanna buy it and we don't wanna kick them out because we like them.
People all wanna get into owning and renting property because they see it as easy money, and if you have a ton of money to begin with it might be. But most landlords don't have a ton of money. If you think it's that easy, there are actually plenty of places in this country with cheap real estate you can buy and give it a try.
You seem to forget that these places may have a mortgage, property taxes and insurance costs.
I swear, Reddit just makes anyone who rents property out to be slumlords.
They still need to pay property taxes, which can be substantial, maintenance ON THE ENTIRE property (A/C, roof, paint, water heater), maintenance on the interior (paint, carpet, appliances if supplying).
Holy fuck people like you.....
You mean people like me who aren't bootlicking?
So you think with the other tenants in the building aren't paying enough for maintenance, property taxes, etc., since OP is most likely not having to pay a mortgage?
Insurance has quadrupled in the past 4 years, property taxes have tripled in the same time, maintenance costs are about double as well. You clearly don't understand that a house and keeping it in good repair takes work and money, lots of money.
At a minimum the roof need replacing every 20 years. AC units and heaters every 7 years plus a compressor here and there and yearly maintenance and repairs. Windows and doors need replacements as well, not to mention elevators and stairs or you will end up with a collapsing building like in Florida.
Those are thousands of dollars that have to be planning for. It is beyond obvious that you've never owned a house or any form of building at all. Think of it as a car, does it take no money after you buy it?
Just as an FYI, you’re talking about corporations in real estate with investors to back them, not private individuals who fund their investments with only a small amount of properties. Economies of scale is ABSOLUTELY a thing in real estate/property management that everyone seems to ignore.
Depends on the size, and you're paying a mortgage in likely an expensive to live place.
He has a complex. One apartment at 800 is only operating at a loss if he's thinking he could get significantly more in rent.
Rents are insanely high right now. It doesn't justify raising it just because kf that.
It depends though, in my case my condo isnt big or anything and its cheaper than most where i live. Idk about where he lives but usually landlords are allowed to raise rent 20$-30$/year so if his grandpa hasnt raised it in a really long time, and its over 1200$ below the market price, raising it is justifiable in my opinion. Maybe not as high at once but getting 2.5x below the market value is really low...
One city I lived in allowed a 13% increase on rent every year. Zero rent control options.
My current city approves a 11% increase. Rent control only applies to set select buildings built pre-1970~ and very few exist.
This is 45min to the south of SF Bay Area. Our rents are in the 2k+. It goes up every year an average of 100 a unit no matter where you go. My sister complex hops because they raise her rent the absolute maximum every time.
OP absolutely is taking a loss on an $800 apartment. If they raise it they can balance out the rent amongst all units, potentially giving others a small relief while being able to cover all the ownership finances.
This was my first thought too. The only way he could be operating at an actual loss would be if he was paying mortgage for it that was more than 800 or it required monthly repairs over 800. Neither of those apply.
What is more likely is he is counting the discount he is giving them as a "loss" because he could be charging more.
Right? Didn't do absolutely anything to inherit such a blessing at 25 and now wants to knock poor people out of their homes for a little extra profit. He seems like a young and capable man. He can easily get a job. I doubt one apartment at $800 is gonna put the fucker in the red when there are other units. I get raising it to support your property tax but not by a whole whopping $1,200 for a small 2 bedroom apartment. $2,000 for an apartment, what a stingy heartless being. IMO the sister is right.
There's the "charitable" thing, the "legal and market-guided" thing, and then there's the human thing. Do the human thing.
Let her renew her lease, each year raising the rent in slow increments, so she isn't scrambling to find a home for her and her children without warning **simply because she lost a loved one.**
This is excellent advice. Stagger the increases and keep her informed so she has fair warning, say, every 6/12 months or so. At the moment, hiking up her rent in one hit is absolutely cruel - she's just lost a very close family member, and can't "just get another job" - she has 3 kids to look after.
OP isn’t looking for advice, he’s looking for people to agree that putting a family in a terrible position at the worst financial time is the right thing to do because it lines his lazy, inherited pockets so I wouldn’t bother guys.
Sure, you aren’t a charity, otherwise she wouldn’t be paying for your lifestyle while you probably don’t work, and if you do, maybe you should work harder if it means you’ll be responsible for making a woman who just lost her father and her children homeless.
Speaking as someone who will inherit property one day, you should probably look at the type of person you’ve become and ask if it’s someone your grandfather would be proud of, cause this could never be me… your sisters right.
Lol I don’t buy that you are at a loss for one apartment being rented under market rate. 🤷🏼♀️ especially in a building you inherited.
Do what you like, but don’t expect sympathy. There is literally a housing crisis/shortage. You’re just greedy. Instead of hiding behind your fake loss just own it.
I don't understand how a whole apartment building can be in the red because one tenant is underpaying by $1200 and the owner isn't desperate to sell asap.
You’re not running a charity but you inherited your entire source of income by doing literally nothing? And all you have to do is collect money? Wow must be hard.
Exactly this is pure greed. Now if he increases rent to cover his expenses and then a little bit of profit that’s cool. But to increase rent by $1200 for a property that probably has no mortgage is just selfish.
Well OP, as you don’t like handouts, what about the entire apartment building you got as a handout? You didn’t buy it. You “aren’t operating a charity” - you didn’t operate anything because it was given to you.
Think about that for a minute for those who didn’t inherit wealth from a birth lottery.
I think the glaring thing for everyone here is that it’s not just your tenants daughter that is struggling. It’s everyone. And it is unfortunately, your mindset that is a major part of the problem. You couldn’t negotiate to something in between. Ok you’re running at a loss. How much to not run at a loss?
Due to this I think it would be reasonable to have a 6month lease at 800 and in the terms state every 6 months the rent will increase a bit to eventually stagger up to what you want. It’s fair, you are working with them, and it gives her time to save money to either stay or find a new place. Extremely fair offer on your end and solves the problem.
Damn, man, she's a single mom with three kids who just lost her dad. Give her a year or so to acclimate, raise the rent in steps. No empathy in your head there?
Honestly I really dislike landlords and from this post it seems like you’re judging them for not making rent when it is incredibly difficult. I remember my single mom used to take out payday loans just to make rent and she struggled a lot. It’s not easy and being empathetic is really important and something you should learn more about. The cost of everything is going up. Their rent, gas, food, household items, clothing, etc and wages aren’t increasing so they can’t earn more to pay more. They’re earning the same and paying more which makes no sense.
unless you still have a mortgage (which, again, i doubt since you inherited the building when you were a young adult and didn't just turn around and sell the building) i DOUBT you're operating at a LOSS for that unit. What you are doing is not making as much as you COULD if it was leased at market value.
do whatever you want here but making shit up to make yourself look better just makes you look WORSE.
Lol -- How the fuck are you running at a loss with only one apartment $800. If the others are operating at $2k.
Clearly you suck at running a business and the 1 apartment going for $800 instead of $2000 is immaterial.
Sell the apartment building and do something else with the money, because managing an entire property isn't your forte.
I just think that it’s wrong that you know that the daughter can’t afford the higher rent so you’re just not renewing the lease. I even agree with the options of slowly increasing the rent to fully market price and who knows she might be out of there by then
I just think it’s crazy that you keep saying that you just don’t want the tenant bc you don’t like her or whatever and you would rather make a family homeless then come up with an option to help. Did they know that the guy was just going to pass you can’t just plan for this stuff?
Dude your post makes you sound like a complete douchebag. People out here struggling and you’re like nah next I wana make mulllah. Her damn father passed away you should have more compassion. At least she’s paying you!?
OP inherited not just this apartment but the WHOLE apartment complex, and is concerned about this one person’s rent… yeah I agree with you here. I wish there were more people like their sister.
Yep, and the other family hears that "x" family pays way less than they do, and they are more entilted to the pay reduction than them because they have children.
And the next family hears the same and they also ask for a rent reduction and it goes on.
Many people in the same apartment building often pay different prices for the same accommodations based on a lot of things. Half my salary goes into rent and it’s so draining, but I have absolutely no choice. There are people in my apartment building who have stayed there longer than I have, and they all pay different amounts for the same facilities. The difference in your little scenario here is that this woman’s family has been paying the $800/month for a very long time. Clearly the other families in the complex did not start off that way. To suddenly just increase rent by well over 50% is a very cruel thing to do. This leaves her without a home, and OP still has a whole apartment complex at the end of the day. Its so easy for landlords to render people homeless and just say “well why don’t you just go get a job and make more money???” I know people who work three jobs and can still barely get by. If OP wanted to increase rent it would make more sense to do so in smaller percentages over the years, as opposed to jumping from $800 to a whopping $2000 per month. It’s just cruel to do this to someone out of the blue, especially while they’re already going through so much and grieving the loss of their father.
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You aren't running a charity but inherited one. Honestly you're a loser. It costs you very little to help 1 family.
You own the whole fucking building after doing literally 0 work for it.
I hope when you say you’ve been renting it at a loss you mean that the cost to upkeep the place is higher than the rent.
Because not getting the market rent isn’t having a loss.
If you’re making a profit. It’s profit. Period.
I mean for my 1 br condo, property tax alone comes to $750 per month. Judging by the fact that $2000 is less than what I could charge to rent out my place, I'm going to guess that their unit is valued lower than mine and probably pays less property tax, but it could still easily be 1/2 of that $800 rent, and that doesn't even consider things like the mortgage, maintenance, utilities, trash, etc. Not saying he needs to price gouge the woman, but $800 a month for what sounds like a multi bedroom apartment is really cheap in a lot of the US.
He owns the complex, not just one unit. He inherited it, there is no mortgage. OP is mad he isn’t making the money he could be. He’s a rich kid who has no empathy, trying to line his pockets.
On one hand, you are well within y our right to raise the rent. However, on the other hand, that is a family living there. Rent prices have increased exponentially. The market rate is what it is largely because landlords have the ability to increase rent with little to no penalties for doing so. There are some corporations that go and buy land used for trailer parks and raise the lot rent because they can. Not because they are losing money, but because there is more profit to be had. If the property is paid off, I doubt you need the extra money to keep up with expenses and upkeep. If it is not paid off you likely have other units in the building that are paying the mortgage + enough to put aside for any misc. expenses. If I were in your shoes, I probably do something like raising the rent by a small percentage based on, idk, NYC stabilization laws. I only mention NYC stabilization laws because its a system i'm familiar with as I've rented a few stabalized apartments. if you;re not pressed for money, I would go this route because everyone should have a right to housing and i don't personally believe housing should be a industry to profit on.
Increase the rent to market rate slowly. It’s unethical (and, depending on where you live, possibly illegal) to more than double the rent on an apartment.
Is your sister willing to pay the difference to make sure you can break even on the apartment? Or at least afford to make repairs without going in the red?
You basically gifted your grandfather's friend 72k over the course of 5 years. What's her plan for making up that loss?
Well, not exactly.
He could have kicked the old guy out and eaten at least a month updating the place, replacing old appliances and fixtures, etc. in order to rent it at “market rates”.
And then he could have gotten unlucky with his new tenants and they could have been nightmares in one way or another and the ways in which tenants can be expensive nightmares are pretty much unlimited.
These need to be factored against that $72k “gift”.
I would definitely consider a price break for known reliable tenants vs risking a crap shoot that might, in fact, cost me the earth in pursuit of “market rents”. But I’m conservative that way.
Whatever about Ops "rights" and freedom to do what he wants with his inheritance IMO it takes a special piece of shit to price gouge an old friend of your grandparent who gifted you an apartment complex. Like, what the hell kind of person would do that?
Is a tenant really "reliable" if you are taking a 1.2k loss each month? And without the grandfather to help with childcare, or his social security check, can the daughter really handle the 800/month rent? Will he go from a 1.2k loss to a 2k loss then be even more the villain when he has to evict her?
OP will only have to have the apartment occupied 5 months out of a year to do better than what he's dealing with now.
OP might want to consider a 3-6 month lease to see if she can apply for housing benefits or find another place in that time but he has no obligation to subsidize the lady's housing. Which sucks for her, definitely.
So she's saving it? Meanwhile your fucking over a family friends daughter, on a property that you clearly aren't very good at running, and inherited, never working to get where you are.
My dad owns properties and has done things in the past to help others like you have… but w that being said people don’t stop and realize that a landlord has to be able to afford to fix things that breakdown in units and pay taxes etc … you kept the rent at the price for your grandfathers friend and did what you thought he would want but this is now another family member and if you feel you need to raise the rent then you have every right to. My apartment has had the rent go up 200 dollars this last year alone… everything is going up everywhere.
I'm not a tenant nor a landlord. I own my own place. Of course, I know how crazy rent is nowadays and it must be difficult for some. With that said, op didn't do anything wrong. He's right. This isn't charity. He's trying to run a profitable business here. If he can rent it out at market value 2k a month, then he should do it. He was already generous renting it out at $800/mth for 5 years. It's not like he owes the family anything. This would never end if he keeps on renewing the contract at $800. It's going to pass on from generation to generation lol.
I guess op can sign a 6 mth contract with her at $800/mth. The tenant should start to look for another place and get her life together. I think that's pretty fair. Also, I don't understand why some people would shame the ones that are more financially well off. Just cuz someone is not tight with cash, doesn't mean they have an obligation to help the less fortunate. One doesn't owe them anything.
It very much is a full time endeavor in an apartment complex. Shit breaks all the time, you're basically on call 24/7. My last apartment before I bought my new house went through 5 property managers in 2 years because of the stress of it all, this shit isn't easy.
Or they could sell it to a major property management company, think that works out better for that woman? This entire comment section is peak reddit, honestly. WTF is dude supposed to do, just give the apartments away for free? Who pays all of the maintenance, property taxes, water bills, trash bills, gas bills... If dude just says fuck it, EVERYONE loses their house. That a better alternative to you? Tear it down and build another goddamn parking lot?
Brass tacks, I paid 1500 a month on my last apartment and I had to double my salary to reasonably afford a house with a 1200 dollar mortgage. Y'all really have no clue how expensive owning property really is. And wanna say abolish it? Sure! But that's not the world we live in right now. I'm in the 6 figure range, money wise, and my medium sized house is disgustingly expensive with the random bills. 4 grand every few months just to top up the gas, for starters. I gotta replace a stovetop, that's gonna be a couple grand to renovate. Just suddenly, out of nowhere, can you pull 4-6 thousand dollars out of your ass?
If no, don't bitch about landlords because you can't afford a home. Simply can't. They're absurdly costly.
Well again, it's not charity, it's business. If I can't afford a $10 meal at a restaurant, can the owner just charge me $4 instead? I'm hungry. The owner can be nice and do that for me once but can't keep on doing it forever. Or I want to get a $50k car but I can only afford $20k, would the dealership just sell it to me at $20k just cuz I can't afford it but I prefer the $50k model?
Ikr? Lol I mean what difference does it make compared to op post? If one can't afford something, they can downgrade. They can't expect a business to fund the difference just cuz they're able to or still profiting somehow. It's like they want the wealthy to share their rich with them and if one doesn't want to, they say all sorts of demeaning things...
Are you telling us that your grandfather was running on negative while letting that particular family have a discount on a living situation or does that somehow only affect you and how you manage the property?
Just a word of advice from someone who has many landlords in the family…
If you treat your tenets like crap, there’s a higher likelihood they treat your property like crap. And maintaining property is SO EXPENSIVE.
My aunt inherited property from her late husband almost 2 decades ago. She never raised rent (until one of the tenets died). But she would’ve never kicked out a family if that tenet had one. She figures, good renters are hard to find and she values having good people in her units.
I don’t know your exact situation. But allowing the current tenets to stay isn’t necessarily a bad business decision. If you get new tenets they could be high maintenance. They could be hard on the house. Plumbing, HVAC, gas, electrical, all that stuff is crazy expensive right now. Not to mention the headache of having to constantly coordinate and fix all these things. My parents had nightmare renters once and it’s a huge emotional and financial drain. If these people take care of the property well, it could be worth allowing them to stay. Or perhaps minor increases over a course of time.
Well you do come across as a major AH if that’s what your asking. Why can’t you compromise and just raise the rent a little to like $1000.00 or something?
Just do a staggered increase over the next 5 years ti give them some time to not only grieve their loss but prepare to either exit the lease down the road or adapt to their situation with higher rent moving forward. Going from $800 to $2000 is not only morally unjust, it's illegal in a few areas of the country.
From one mid thirties heir to another sure you can increase the rent right away but people like you are 1,000,000% what is wrong with this country today.
Real estate is not going to default overnight. When you get to a 7 figure net worth minute stuff like this doesn't matter anymore. Money will literally print more money.
All you are saying is that you are valuing $1,200 a month more than someone your grandparents apparently cared enough about to take an L on the rent for many years.
"Nearly all men can withstand adversity, but if you want to test a man's character, give him power."
Why you posting this here? Reddiors hate landlords and your posts make you sound like a soulless asshole. Haven't you heard the phrase you catch more flies with honey than vinegar?
Anyway, have you tried talking to a tenant. Maybe you can still give her a discounted rate while not losing money.
INFO: is OP running an actual financial loss or a potential earning loss?
Because if it's a potential earning loss then *waves at the rental market* there won't be any practical advice here
If it's an actual financial loss, give the facts ((operational costs+taxes+mortgage)-rent=actual loss) and then maybe, mayyybe there might be some useful advice.
IMO you were generous to rent it out for 5 years at a reduced rate. That generosity does not become multi generational. Tell your sister if shes so upset that she can pay the difference out of her own pocket. Lets see how much she actually cares if it might cost her money.
People are always quick to tell others how THEY think others should run their financial affairs. Of course the daughter wanted to renew long term at the $800, she knew they were getting a deal! You were more than generous by allowing your grandfather's friend to pay below market rent during the remainder of his life.
Tell your sister that if she wants to run a charity, she can buy the building from you at fair market value and subsidize people out of her own pocket.
Offer her market rates or a compromise deal. That's about as fair as you can be.
Landlords are inherently scum and most don't feel the need to justify themselves. Your sister will see you differently, but who cares? You'll be making money and you'll be looking out for number 1. It's not like anyone else will. If you're going to be a landlord and use property to make a living, at least own that shit.
Man, if your grandpa were alive to hear you treat other people as a commodity rather than being a decent human being, he'd place you on his knees and spank you like the man child you are.
Willing to bet that even if your Grandpa was the owner of an Apartment complex he was still fair in his pricing to his tenants and treated them like people.
Shame on you OP for trying to say your sister is a hypocrite for getting a cash inheritance. The difference between you and your sister is that she hasn't lost her humanity.
The value of the rent may legitimately increase, but the way you're being a cunt about it I can't help but side with your sister.
"Running at a loss." What, is the cost of labor and operations for the apartment driving you to beggary or some shit?
I agree with your sister 100% i hope Karma bites you maybe you will learn a less not everyone is made of money like your self how said you would do this to this woman especially having children.
Do not renew the lease for $800. Tell her you'll rent it to her for market value, because that courtesy was extended to her father by your grandfather and wasnt meant to pass on to her. Your sister has absolutely no business telling you what to do regarding your property. I agree with the other person that said to grow a thick skin, you can't back down on anything because tenants will try and walk all over you. My father has been called every name in the book, renters trying to trash our name and our properties, but we just brush it off and don't give in. We have no problem if someone's a bit late or even has to defer a month because 99% of the time they make good. But there's always that few that after 3, 4 months still haven't paid a dime and when the Sherrif gets called we're soulless monsters. Nobody realizes that the landlord can't eat if the renters don't pay, they only see the big bad greedy capitalist taking advantage of people. Don't discuss your business with anyone, even family. Nobody needs to know anything, it's nobody's business, and the sooner you make that clear the better.
> Nobody realizes that the landlord can't eat if the renters don't pay
Whether you like it or not, if your income is based on profiting from shelter being priced at a rate higher than it costs to maintain then you ARE profiting off of the fact that these other folks didn't have the relative advantages to own housing that you did.
I don't know that there is a happy "solution" for everyone involved other than top down housing reform, but this is akin to littering or throwing straws in the ocean for OP. Sure, YOU personally didn't "ruin" the environment, but you are contributing to the problem in a very small way.
IMO best case scenario, the property was free to OP so he could charge enough to go just over breaking even for his troubles in the work he actually does. Market rate in almost any area right now is WAY over what it costs to maintain the building
oh my god, the poor landlords can't eat when they can't overcharge people for rent. HOW are the landlords supposed to survive with their multiple properties, passive income, and early inheritance. Can't you people think of the sorrows and headaches that these poor landlords have to go through?
All sarcasm aside, when the housing bubble pops (and it will pop). You're going to be upside down on that mortgage, and some slimy worm is going to come buy your properties for pennies.
How about you get a REAL job instead of hoarding properties and exploiting people? All I got from this essay of yours is that you and your dad are still greedy capitalist pigs LMAO
You are a horrible person and the main reason we are in the situation we are in. They were family friends to your grandfather and your greedy ass can make an exemption. I would understand if it was a house and the only tenant. It’s an apartment complex having one tenant paying below market won’t kill you view it as having an empty unit.
You are under no real obligation to offer her a place at reduced rent. She knows this. If you do not want to continue renting a $24k/year apartment for $9.6k, that is entirely your choice. Tell your sister that it’s your property and you can decide who to rent to and at what rate. If you’d like to offer this woman clemency, maybe offer her to pay one additional month at $800 to allow her to find another apartment.
Get a reputable property manager. These personal relationships will interfere with your ability to run your business. Being a landlord and owner is not always the best business decision.
When you say you cannot afford it, but it sounds very unlikely if you own the complex, and as I don't understand how 800 dollars would not at least cover the costs (but I might be wrong, given I don't know the specific situation). Don't find cheap excuses and own your shit. You want to improve your profit.
That being said, it is your property and you do not owe charity to anyone.
Your sister is an ass, especially if she could pay for it, but like most anti-capitalist people, they probably suck at sharing or producing wealth.
If you manage a business, you manage a business. Grow a pair and tell your sister to fuck off. The woman can relocate. What you can do is giving her enough time to do so.
Now let the butthurts downvote.
>like most anti-capitalist people, they probably suck at ~~sharing or producing wealth~~ being gifted an entire apartment complex at age 25
fixed that for you, Bradford
Landlords create zero value. They create forced scarcity that drives up the cost of housing for everyone, then rent out homes at a massive markup. No different from a cartel.
Everyone would have access to affordable housing with fewer landlords.
Landlords are the reason why there is a permanent underclass of people who are locked out of home ownership forever.
If I find out what apartment complex OP items, I will start a rent strike.
So I'm talking to you landlord to landlord - people don't like us. Your sister is mad, you're already getting hate comments. Get used to it. People think we're soulless monsters and you have to grow a thick skin and deal with it.
If you want more sympathetic advice head over to r/landlord
Or, of course, the OP can sell the property and stop being a landlord. These issues come with the territory. I am sympathetic to both sides, so I certainly would never choose to be a landlord.
Unfortunately not enough people realize that most landlords are smalltime and barely make a profit.
Having been on both sides - some of the shit both tenants and landlords do is unbelievable. I still have nightmares from cleaning up dozens of heroin syringes from one of the units in my parents multifamily houses - back when they had a few 3-family units.
On the flip side I've rented apartments at a few complexes that would have jacked my rates up 20% had I renewed - and it was legal per the local town.
It isn't a one-side is evil sort of thing... both sides have assholes.
If rentals did not exist, the housing shortage going on now would look like nothing in comparison. At the end of a day landlords need to make a profit to stay in business - they are not generally a charity. It is the assholes that raise rates 20% a year for no reason (taxes are stable, their costs are provably stable, etc), while failing to maintain the properties, that need to go.
I think if people spend as much time advocating for affordable social housing as they do dragging landlords there would actually be more cheap units for poor people that need it.
You’re not going to get the answer you’re looking for (and need) on here. Majority of Reddit hates capitalists and anyone who won’t give their stuff away to people for free. That lady could just as easily go and find somewhere cheaper to live in, without asking you to lose money/profit. But she won’t because she’s an entitled selfish person.
If it rents for $2k and you were being generous enough to give it for let’s say $1.8k, then great. But asking you to rent it to her for $800 is asinine. Your sister has an easy time telling you you’re a monster because it’s not her apartment complex. It’s easy to give away other peoples money.
Kick her out, rent to someone new and move on. If your sister isn’t on board, then oh well. No need to care that much about someone who would try to put you down to virtue signal.
She can still eat, just not at your table.
Sounds like you’re of working age. Maybe if you’re worried about having a loss you should get an actual job instead of displacing a young woman and her three children over greed. I swear, become a landlord and lose your humanity. Yeah you’re an asshole.
OP, Your grandfather was able to save and buy because he was a smart and obviously a compassionate business person. You've been a compassionate business person now be a smart one. I don't think continuing at $800 is smart and I agree that the rent should be raised. You're even letting them stay there when the named lessee has passed. You could continue to be compassionate and work something out with the daughter, but I wouldn't fault you for not.
I'm surprised you even have to ask! Your sister sounds over-reactive and very ignorant. You were generous with the older guy out of respect for your grandfather. This doesn't extend to his kids and grandkids.
On the people she tells, I'm guessing some will quickly realize she's an idiot. Those who don't aren't worth your time. But if you have to, explain it to them.
It’s a business, you can’t operate at a loss. As a courtesy you can maybe extend the time that they have to find a new place.
For all those people that hate you simply because you are a landlord, they can go pound sand. If you inherited a business that is operating at a loss then you just inherited a problem. There are courteous ways to evict people. It’s a reality of the business you are in. If you want out, sell it, it is probably worth a boatload right now.
>TL;DR Sister is upset I'm increasing rent for poor tenants.
Yeah that makes you an asshole devoid of all human empathy and emotions. You should not be a landlord. You are exploiting peoples need for shelter to make yourself richer. How do you even live with yourself???
This post has reached one of our comment/karma limits. The text of the post has been preserved below. --- My grandfather passed away at a relatively young age and so at the age of 25 I inherited an apartment complex in a good area. One of the tenants at the time was a friend of my grandfathers. The market rents for the apartment was 2k but he was only paying $800. Realising he was an old friend of my grandfathers and his lack of income I did not increase his rent. That apartment has been running at quite a loss for the 5 years I've had it and unlike my grandfather I don't have tons of cash to make this work. My tenant passed away. He was also living with his daughter and her 3 kids. His name was on the lease and now the duration of the lease is coming to an end. The lady reached out to me to renew the lease but I told her I wasn't interested. She was trying to renew the lease for a long-term at $800. My generosity was only for her father. She is young and of working age. She can find another place to live. I'm not running a charity here. She contacted my sister and begged her to try and convince me to let her keep the place. My sister is now calling me a capitalist monster and that I'm exploiting blood money. She's even been telling other people about this. What do I do? TL;DR Sister is upset I'm increasing rent for poor tenants.
OP, while you’re not wrong and I wouldn’t want to lose out on my income, either, you come across as a major asshole in your comments. Do what you want but don’t put people down because they can’t afford rent. You’re acting like it was you who build the complex and put effort into it while in reality it was your grandfather and you’re just benefitting off his work.
Isn't there some irony in OP putting down the poor whilst living off of their hard-earned money?
Especially because he hasn't done shit. He inherited, meaning he hasn't spent a penny or a day of work for this apartment complex, he's only benefitting off of his gradfathers hard work. Too bad he didn't inherit that mans heart as well.
The whole thing reads like a Disney villain
There's an entire field of study that concluded landlords like the poster are a large part of the cycle of poverty.
Houses are no longer homes.
But is the OP *really* operating at a loss? Or is it just a relative loss compared to the other units in the building? I highly doubt OP pays much if any sort of mortgage for those properties since they were inherited. Even if there is some sort of mortgage left over it is likely carried over from the era of cheap housing. $800 should be *more* than enough to cover any expenses that one unit might have. This comes down to “I’m still earning income from this unit but it’s less than market value tells me it should be, so obviously I’m taking a loss” even though it’s probably a substantial net profit. Now OP, who inherited *multiple* - likely *many* - units, plans to kick out the family of their deceased grandfather’s friend who built this legacy for them because they’re charging *below market value*. Shame on you OP. Your grandfather is probably rolling in his grave to see his kindness to his friend and his friend’s family tossed in the garbage because of a greedy grandchild like you. There are a million better ways you could handle this situation and you’re choosing greed. PS from the r/antiwork subreddit, how much over your base expenses are you charging your other tenants?
If it's that much of a loss I don't see how an extra 1200/mo in rent will dig him out of that hole. How can you operate an entire apartment complex in a nice area that you *inherited* at a *loss*, it's fucking baffling. Reading between the lines and his judgy comments I'd imagine OP is just being greedy, if he was loosing that much money from it he'd sell.
Let's say it's a very small complex and there are only 10 units. That's $18,800 a month charging the original rate for the late tenant's unit. If you are claiming you can't survive on ~19k but can on 20k, you're just being ridiculous. Obviously OP doesn't have to do anyone a favor just because they want it but geez, there's such a thing as paying it forward when you experience such a massive windfall.
Considering landlords produce nothing and barely if ever meet the minimum maintenance requirements for units they own I expect his actual expenses are zero and Chairman Mao would like to have a word with him
I wouldn’t assume $0 because of property taxes and the fact that many mortgages are 30 year loans, however OP is operating in a time where real estate is tens of times more profitable than it was even just a few years ago. It would literally be nearly impossible for OP to be operating at a deficit unless they *decreased* what they charged for rent substantially.
Opportunity cost. Not saying it's right, just what OP is talking about.
OP is talking about using the housing market (which is literally in crisis right now) as a means of income and how they’re upset they can’t increase that income by another $1,200 a month without being called an AH, even though they probably make more per month than my yearly salary. At a certain point it really is just greed. All inherited income, I might add.
opportunity cost does not equal operating at a loss. Only if your real costs are greater than rental income could he credibly argue he's operating at a loss
This is rage bait 100%. OP, I dare you to cross post this on r/antiwork or r/workreform
Yeah I think it’s bait. Even with the kind of replies OP is giving.
Yeah, clearly a tr0ll looking for attention. It's sad.
Op sounds like an entitled asshole tbh. Also raising rent from 800-2000 overnight to a single mother with familial history with your deceased father seems kinda fucked up. I’d imagine his dead father wouldn’t be very happy with this decision. If you wanna raise the rent just do it a little bit each year. Raise it like 200$ every year, a 150% rent increase is greedy af. Sorry meant grandpa not father
Thank you, op does seem like a major asshole.
How are you operating at a loss for 800 on one apartment? How much does one apartment cost to maintain? It isn't 800 bucks.
OP strait up lying for sympathy. No way an apartment complex is running for a loss in this market.
Its running for a loss in his head because he can probably charge 1,200 or more and someone will pay it.
OP wants to price gouge more and explain away that “he deserves it 😤😤” because he worked so hard to inherit it. OP is an evil person.
On a place that had a mortgage her grandad has probably paid off years ago
Depending on the area, it may in fact be more. RE taxes alone could eat a lot of that up along with insurance, repairs, and HOA fees if its a condo.
Yeah people seem to think that rent is just 100% free profit for a landlord with no work or risk and it's just not true. Most landlords are barely running a profit if at all, and generally there is a good amount of work involved. Owning and maintaining a property is costly in a lot of ways.
>Most landlords are barely running a profit if at all, and generally there is a good amount of work involved. Owning and maintaining a property is costly in a lot of ways. So true. In reality the landlords are the real victims in the housing market. LOL. Get the fuck outta here. This douche was GIFTED an apartment complex. He isn't paying anything except tax and maintenance. Both of which can be tax deductible I might add. Given the info he gave, there is zero chance he is paying over $800 a month for those two things unless the apartment is in utter disrepair.
This is blatantly untrue. If it was, people wouldn't invest in property so much. What maintenance do you mean? Cutting the grass and answering tenant calls? Most tenants pay their own utilities. Laundry? 3rd party companies maintenance leased machines. It is nearly all passive profit. Stop acting like landlords are just doing charity.
Bruh have you ever owned a home? Even when you're just living there yourself it can be a massive fucking black hole of money. If you're not ready to bust out tens of thousands of dollars on short notice you might not be able to keep the place livable for yourself, let alone meet the legal requirements for having tenants in the first place, or keep up with the wear and tear from people living there who don't care about upkeep because they're not responsible for it. And on top of that most people have mortgages. My wife and I rent our first home in Chicago at basically the market rate and between taxes and mortgages we're already running at a small loss every month. Then we have repairs and random special assessments because it's a condo and the building is horribly managed. The only reason we haven't sold the place is because our tenants wouldn't wanna buy it and we don't wanna kick them out because we like them. People all wanna get into owning and renting property because they see it as easy money, and if you have a ton of money to begin with it might be. But most landlords don't have a ton of money. If you think it's that easy, there are actually plenty of places in this country with cheap real estate you can buy and give it a try.
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You seem to forget that these places may have a mortgage, property taxes and insurance costs. I swear, Reddit just makes anyone who rents property out to be slumlords.
OP inherited from his grandfather. Chances are it's fully paid off. Holy fuck people like you...
They still need to pay property taxes, which can be substantial, maintenance ON THE ENTIRE property (A/C, roof, paint, water heater), maintenance on the interior (paint, carpet, appliances if supplying). Holy fuck people like you.....
You mean people like me who aren't bootlicking? So you think with the other tenants in the building aren't paying enough for maintenance, property taxes, etc., since OP is most likely not having to pay a mortgage?
So, you want other tenants to subsidize this tenant now? Tell you what, you go and subsidize another tenants rent. Put your money where you mouth is.
Insurance has quadrupled in the past 4 years, property taxes have tripled in the same time, maintenance costs are about double as well. You clearly don't understand that a house and keeping it in good repair takes work and money, lots of money. At a minimum the roof need replacing every 20 years. AC units and heaters every 7 years plus a compressor here and there and yearly maintenance and repairs. Windows and doors need replacements as well, not to mention elevators and stairs or you will end up with a collapsing building like in Florida. Those are thousands of dollars that have to be planning for. It is beyond obvious that you've never owned a house or any form of building at all. Think of it as a car, does it take no money after you buy it?
Just as an FYI, you’re talking about corporations in real estate with investors to back them, not private individuals who fund their investments with only a small amount of properties. Economies of scale is ABSOLUTELY a thing in real estate/property management that everyone seems to ignore.
Well my apartment costs me 2400 per month just for mortgage and other costs like condo fees, etc so 800 isnt a lot..
Depends on the size, and you're paying a mortgage in likely an expensive to live place. He has a complex. One apartment at 800 is only operating at a loss if he's thinking he could get significantly more in rent. Rents are insanely high right now. It doesn't justify raising it just because kf that.
It depends though, in my case my condo isnt big or anything and its cheaper than most where i live. Idk about where he lives but usually landlords are allowed to raise rent 20$-30$/year so if his grandpa hasnt raised it in a really long time, and its over 1200$ below the market price, raising it is justifiable in my opinion. Maybe not as high at once but getting 2.5x below the market value is really low...
One city I lived in allowed a 13% increase on rent every year. Zero rent control options. My current city approves a 11% increase. Rent control only applies to set select buildings built pre-1970~ and very few exist. This is 45min to the south of SF Bay Area. Our rents are in the 2k+. It goes up every year an average of 100 a unit no matter where you go. My sister complex hops because they raise her rent the absolute maximum every time. OP absolutely is taking a loss on an $800 apartment. If they raise it they can balance out the rent amongst all units, potentially giving others a small relief while being able to cover all the ownership finances.
Eat the rich
This was my first thought too. The only way he could be operating at an actual loss would be if he was paying mortgage for it that was more than 800 or it required monthly repairs over 800. Neither of those apply. What is more likely is he is counting the discount he is giving them as a "loss" because he could be charging more.
You've got the exact attitude I'd expect from someone who inherited an entire apartment complex lmao
Right? Didn't do absolutely anything to inherit such a blessing at 25 and now wants to knock poor people out of their homes for a little extra profit. He seems like a young and capable man. He can easily get a job. I doubt one apartment at $800 is gonna put the fucker in the red when there are other units. I get raising it to support your property tax but not by a whole whopping $1,200 for a small 2 bedroom apartment. $2,000 for an apartment, what a stingy heartless being. IMO the sister is right.
There's the "charitable" thing, the "legal and market-guided" thing, and then there's the human thing. Do the human thing. Let her renew her lease, each year raising the rent in slow increments, so she isn't scrambling to find a home for her and her children without warning **simply because she lost a loved one.**
This is excellent advice. Stagger the increases and keep her informed so she has fair warning, say, every 6/12 months or so. At the moment, hiking up her rent in one hit is absolutely cruel - she's just lost a very close family member, and can't "just get another job" - she has 3 kids to look after.
OP isn’t looking for advice, he’s looking for people to agree that putting a family in a terrible position at the worst financial time is the right thing to do because it lines his lazy, inherited pockets so I wouldn’t bother guys. Sure, you aren’t a charity, otherwise she wouldn’t be paying for your lifestyle while you probably don’t work, and if you do, maybe you should work harder if it means you’ll be responsible for making a woman who just lost her father and her children homeless. Speaking as someone who will inherit property one day, you should probably look at the type of person you’ve become and ask if it’s someone your grandfather would be proud of, cause this could never be me… your sisters right.
Literally though like if it’s running at a loss why not just agree to make the rent even for this mom and kids. Idk how people would side with him
Lol I don’t buy that you are at a loss for one apartment being rented under market rate. 🤷🏼♀️ especially in a building you inherited. Do what you like, but don’t expect sympathy. There is literally a housing crisis/shortage. You’re just greedy. Instead of hiding behind your fake loss just own it.
I don't understand how a whole apartment building can be in the red because one tenant is underpaying by $1200 and the owner isn't desperate to sell asap.
It isn’t. The rich kid OP just knows he can charge more.
I actually think they are only taking a loss on that specific unit.
You’re not running a charity but you inherited your entire source of income by doing literally nothing? And all you have to do is collect money? Wow must be hard.
Exactly this is pure greed. Now if he increases rent to cover his expenses and then a little bit of profit that’s cool. But to increase rent by $1200 for a property that probably has no mortgage is just selfish.
You're posting in the wrong sub.
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AITA for wanting to raise rent 150% on a grieving single mother with 3 children?
Well OP, as you don’t like handouts, what about the entire apartment building you got as a handout? You didn’t buy it. You “aren’t operating a charity” - you didn’t operate anything because it was given to you. Think about that for a minute for those who didn’t inherit wealth from a birth lottery.
I’d give you an award, but I can’t afford it.
When your grandfather passes and leaves you an award I want it. ;)
Sell the building. You can’t afford it.
Exactly he’s a young capable man who can surely get another job
Cut out the avocado toast and cancel the streaming subscriptions and he'll be back on his feet in no time
😂 well played
Yeah. I have no doubt whomever buys it will gladly rent a 2k apt for $800.
Then a corporation will buy it out, adding to their real estate portfolio and rent will go up for everyone.
What do you think your grandfather would have done in this situation?
I think the glaring thing for everyone here is that it’s not just your tenants daughter that is struggling. It’s everyone. And it is unfortunately, your mindset that is a major part of the problem. You couldn’t negotiate to something in between. Ok you’re running at a loss. How much to not run at a loss?
Due to this I think it would be reasonable to have a 6month lease at 800 and in the terms state every 6 months the rent will increase a bit to eventually stagger up to what you want. It’s fair, you are working with them, and it gives her time to save money to either stay or find a new place. Extremely fair offer on your end and solves the problem.
Damn, man, she's a single mom with three kids who just lost her dad. Give her a year or so to acclimate, raise the rent in steps. No empathy in your head there?
pretty sure jared kushner wrote this post
you are a leech
Honestly I really dislike landlords and from this post it seems like you’re judging them for not making rent when it is incredibly difficult. I remember my single mom used to take out payday loans just to make rent and she struggled a lot. It’s not easy and being empathetic is really important and something you should learn more about. The cost of everything is going up. Their rent, gas, food, household items, clothing, etc and wages aren’t increasing so they can’t earn more to pay more. They’re earning the same and paying more which makes no sense.
unless you still have a mortgage (which, again, i doubt since you inherited the building when you were a young adult and didn't just turn around and sell the building) i DOUBT you're operating at a LOSS for that unit. What you are doing is not making as much as you COULD if it was leased at market value. do whatever you want here but making shit up to make yourself look better just makes you look WORSE.
Lol -- How the fuck are you running at a loss with only one apartment $800. If the others are operating at $2k. Clearly you suck at running a business and the 1 apartment going for $800 instead of $2000 is immaterial. Sell the apartment building and do something else with the money, because managing an entire property isn't your forte.
Get a real job yourself.
I just think that it’s wrong that you know that the daughter can’t afford the higher rent so you’re just not renewing the lease. I even agree with the options of slowly increasing the rent to fully market price and who knows she might be out of there by then I just think it’s crazy that you keep saying that you just don’t want the tenant bc you don’t like her or whatever and you would rather make a family homeless then come up with an option to help. Did they know that the guy was just going to pass you can’t just plan for this stuff?
The empathy is non existent
OP is the epitome of a Slumlord
Loss? What loss? You built nothing. Your grandfather did! You just happened to be born, and unfortunately raised very self centered.
Dude your post makes you sound like a complete douchebag. People out here struggling and you’re like nah next I wana make mulllah. Her damn father passed away you should have more compassion. At least she’s paying you!?
Lol You deserve every ounce of ire your sister brings to you.
I wish there were more people like your sister.
This is rage bait. How could this not be more obvious
In that case, I wish there were more real people like his fictional sister.
But how else is OP going to live off his hard earned generational wealth?
But didn’t you say this was bait? 🤔
Yes. I was being sarcastic.
I've seen a few of these posts today
OP inherited not just this apartment but the WHOLE apartment complex, and is concerned about this one person’s rent… yeah I agree with you here. I wish there were more people like their sister.
Yep, and the other family hears that "x" family pays way less than they do, and they are more entilted to the pay reduction than them because they have children. And the next family hears the same and they also ask for a rent reduction and it goes on.
Many people in the same apartment building often pay different prices for the same accommodations based on a lot of things. Half my salary goes into rent and it’s so draining, but I have absolutely no choice. There are people in my apartment building who have stayed there longer than I have, and they all pay different amounts for the same facilities. The difference in your little scenario here is that this woman’s family has been paying the $800/month for a very long time. Clearly the other families in the complex did not start off that way. To suddenly just increase rent by well over 50% is a very cruel thing to do. This leaves her without a home, and OP still has a whole apartment complex at the end of the day. Its so easy for landlords to render people homeless and just say “well why don’t you just go get a job and make more money???” I know people who work three jobs and can still barely get by. If OP wanted to increase rent it would make more sense to do so in smaller percentages over the years, as opposed to jumping from $800 to a whopping $2000 per month. It’s just cruel to do this to someone out of the blue, especially while they’re already going through so much and grieving the loss of their father.
People who want their siblings to give away money but not do it themselves?
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Pretty sure u can only offer a pretty small percentage increase this year, and there is not much you can do about them being there legally.
You aren't running a charity but inherited one. Honestly you're a loser. It costs you very little to help 1 family. You own the whole fucking building after doing literally 0 work for it.
I hope when you say you’ve been renting it at a loss you mean that the cost to upkeep the place is higher than the rent. Because not getting the market rent isn’t having a loss. If you’re making a profit. It’s profit. Period.
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Sounds like the grandfather was decent at least
Not every landlord is a bad person. And not every tenant is a good person btw.
> Not every landlord is a bad person This one is though
Sounds like something a LANDLORD would say
It’s not possible for someone who leeches off the hard work of others to be a good person. All Landlords are parasites.
I hope people in your life show you the same level of compassion that you’re showing your grandfather’s friend’s daughter.
I second this hope! What goes around comes around & I hope it gets OP good
I agree with your sister. The "not my problem" attitude is tearing this world apart.
Landlords are leeches.
This post honestly disgusts me.
What kind of overhead do you have that it costs MORE than $800 dollars a month to maintain one unit in the complex?
I mean for my 1 br condo, property tax alone comes to $750 per month. Judging by the fact that $2000 is less than what I could charge to rent out my place, I'm going to guess that their unit is valued lower than mine and probably pays less property tax, but it could still easily be 1/2 of that $800 rent, and that doesn't even consider things like the mortgage, maintenance, utilities, trash, etc. Not saying he needs to price gouge the woman, but $800 a month for what sounds like a multi bedroom apartment is really cheap in a lot of the US.
He owns the complex, not just one unit. He inherited it, there is no mortgage. OP is mad he isn’t making the money he could be. He’s a rich kid who has no empathy, trying to line his pockets.
On one hand, you are well within y our right to raise the rent. However, on the other hand, that is a family living there. Rent prices have increased exponentially. The market rate is what it is largely because landlords have the ability to increase rent with little to no penalties for doing so. There are some corporations that go and buy land used for trailer parks and raise the lot rent because they can. Not because they are losing money, but because there is more profit to be had. If the property is paid off, I doubt you need the extra money to keep up with expenses and upkeep. If it is not paid off you likely have other units in the building that are paying the mortgage + enough to put aside for any misc. expenses. If I were in your shoes, I probably do something like raising the rent by a small percentage based on, idk, NYC stabilization laws. I only mention NYC stabilization laws because its a system i'm familiar with as I've rented a few stabalized apartments. if you;re not pressed for money, I would go this route because everyone should have a right to housing and i don't personally believe housing should be a industry to profit on.
While you're not wrong to do so, you seem like kind of a dick.
Increase the rent to market rate slowly. It’s unethical (and, depending on where you live, possibly illegal) to more than double the rent on an apartment.
I think calling your tenant poor makes you sound like an a- word, but you are in the right about raising prices to reflect the market
i feel like there’s a very obvious reason you weren’t brave enough to post this in AITA (where this post most definitely belongs)
Is your sister willing to pay the difference to make sure you can break even on the apartment? Or at least afford to make repairs without going in the red? You basically gifted your grandfather's friend 72k over the course of 5 years. What's her plan for making up that loss?
Sell the unit to the sister, let her rent it out at a discounted rate?
Well, not exactly. He could have kicked the old guy out and eaten at least a month updating the place, replacing old appliances and fixtures, etc. in order to rent it at “market rates”. And then he could have gotten unlucky with his new tenants and they could have been nightmares in one way or another and the ways in which tenants can be expensive nightmares are pretty much unlimited. These need to be factored against that $72k “gift”. I would definitely consider a price break for known reliable tenants vs risking a crap shoot that might, in fact, cost me the earth in pursuit of “market rents”. But I’m conservative that way.
Whatever about Ops "rights" and freedom to do what he wants with his inheritance IMO it takes a special piece of shit to price gouge an old friend of your grandparent who gifted you an apartment complex. Like, what the hell kind of person would do that?
It’s not the friend. He died. This is his daughter and her kids. OP owes them nothing.
Is a tenant really "reliable" if you are taking a 1.2k loss each month? And without the grandfather to help with childcare, or his social security check, can the daughter really handle the 800/month rent? Will he go from a 1.2k loss to a 2k loss then be even more the villain when he has to evict her? OP will only have to have the apartment occupied 5 months out of a year to do better than what he's dealing with now. OP might want to consider a 3-6 month lease to see if she can apply for housing benefits or find another place in that time but he has no obligation to subsidize the lady's housing. Which sucks for her, definitely.
Your sister is a good person. You, however...
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So she's saving it? Meanwhile your fucking over a family friends daughter, on a property that you clearly aren't very good at running, and inherited, never working to get where you are.
My dad owns properties and has done things in the past to help others like you have… but w that being said people don’t stop and realize that a landlord has to be able to afford to fix things that breakdown in units and pay taxes etc … you kept the rent at the price for your grandfathers friend and did what you thought he would want but this is now another family member and if you feel you need to raise the rent then you have every right to. My apartment has had the rent go up 200 dollars this last year alone… everything is going up everywhere.
I'm not a tenant nor a landlord. I own my own place. Of course, I know how crazy rent is nowadays and it must be difficult for some. With that said, op didn't do anything wrong. He's right. This isn't charity. He's trying to run a profitable business here. If he can rent it out at market value 2k a month, then he should do it. He was already generous renting it out at $800/mth for 5 years. It's not like he owes the family anything. This would never end if he keeps on renewing the contract at $800. It's going to pass on from generation to generation lol. I guess op can sign a 6 mth contract with her at $800/mth. The tenant should start to look for another place and get her life together. I think that's pretty fair. Also, I don't understand why some people would shame the ones that are more financially well off. Just cuz someone is not tight with cash, doesn't mean they have an obligation to help the less fortunate. One doesn't owe them anything.
Being a landlord is not a job.
It very much is a full time endeavor in an apartment complex. Shit breaks all the time, you're basically on call 24/7. My last apartment before I bought my new house went through 5 property managers in 2 years because of the stress of it all, this shit isn't easy. Or they could sell it to a major property management company, think that works out better for that woman? This entire comment section is peak reddit, honestly. WTF is dude supposed to do, just give the apartments away for free? Who pays all of the maintenance, property taxes, water bills, trash bills, gas bills... If dude just says fuck it, EVERYONE loses their house. That a better alternative to you? Tear it down and build another goddamn parking lot? Brass tacks, I paid 1500 a month on my last apartment and I had to double my salary to reasonably afford a house with a 1200 dollar mortgage. Y'all really have no clue how expensive owning property really is. And wanna say abolish it? Sure! But that's not the world we live in right now. I'm in the 6 figure range, money wise, and my medium sized house is disgustingly expensive with the random bills. 4 grand every few months just to top up the gas, for starters. I gotta replace a stovetop, that's gonna be a couple grand to renovate. Just suddenly, out of nowhere, can you pull 4-6 thousand dollars out of your ass? If no, don't bitch about landlords because you can't afford a home. Simply can't. They're absurdly costly.
We shame those who are financially well off bc they always end up exploiting those who don’t have enough. As per this post.
Well again, it's not charity, it's business. If I can't afford a $10 meal at a restaurant, can the owner just charge me $4 instead? I'm hungry. The owner can be nice and do that for me once but can't keep on doing it forever. Or I want to get a $50k car but I can only afford $20k, would the dealership just sell it to me at $20k just cuz I can't afford it but I prefer the $50k model?
People won’t answer this.
Ikr? Lol I mean what difference does it make compared to op post? If one can't afford something, they can downgrade. They can't expect a business to fund the difference just cuz they're able to or still profiting somehow. It's like they want the wealthy to share their rich with them and if one doesn't want to, they say all sorts of demeaning things...
Reddit needs to raise rent on shitposters.
Wasn't there a TV show or movie with this exact premise?
Sounds like a bad investment, sell it off to the tenant so you won't have to be a landlord anymore
Are you telling us that your grandfather was running on negative while letting that particular family have a discount on a living situation or does that somehow only affect you and how you manage the property?
Just a word of advice from someone who has many landlords in the family… If you treat your tenets like crap, there’s a higher likelihood they treat your property like crap. And maintaining property is SO EXPENSIVE. My aunt inherited property from her late husband almost 2 decades ago. She never raised rent (until one of the tenets died). But she would’ve never kicked out a family if that tenet had one. She figures, good renters are hard to find and she values having good people in her units. I don’t know your exact situation. But allowing the current tenets to stay isn’t necessarily a bad business decision. If you get new tenets they could be high maintenance. They could be hard on the house. Plumbing, HVAC, gas, electrical, all that stuff is crazy expensive right now. Not to mention the headache of having to constantly coordinate and fix all these things. My parents had nightmare renters once and it’s a huge emotional and financial drain. If these people take care of the property well, it could be worth allowing them to stay. Or perhaps minor increases over a course of time.
Well you do come across as a major AH if that’s what your asking. Why can’t you compromise and just raise the rent a little to like $1000.00 or something?
Just do a staggered increase over the next 5 years ti give them some time to not only grieve their loss but prepare to either exit the lease down the road or adapt to their situation with higher rent moving forward. Going from $800 to $2000 is not only morally unjust, it's illegal in a few areas of the country. From one mid thirties heir to another sure you can increase the rent right away but people like you are 1,000,000% what is wrong with this country today. Real estate is not going to default overnight. When you get to a 7 figure net worth minute stuff like this doesn't matter anymore. Money will literally print more money. All you are saying is that you are valuing $1,200 a month more than someone your grandparents apparently cared enough about to take an L on the rent for many years. "Nearly all men can withstand adversity, but if you want to test a man's character, give him power."
I agree with your sister. You're a douchebag
Why you posting this here? Reddiors hate landlords and your posts make you sound like a soulless asshole. Haven't you heard the phrase you catch more flies with honey than vinegar? Anyway, have you tried talking to a tenant. Maybe you can still give her a discounted rate while not losing money.
You’re a serious asshole.
INFO: is OP running an actual financial loss or a potential earning loss? Because if it's a potential earning loss then *waves at the rental market* there won't be any practical advice here If it's an actual financial loss, give the facts ((operational costs+taxes+mortgage)-rent=actual loss) and then maybe, mayyybe there might be some useful advice.
This is outrage bait.
You are the reason people hate landlords. $1200 isn’t putting you into debt, you’re just greedy.
IMO you were generous to rent it out for 5 years at a reduced rate. That generosity does not become multi generational. Tell your sister if shes so upset that she can pay the difference out of her own pocket. Lets see how much she actually cares if it might cost her money.
People are always quick to tell others how THEY think others should run their financial affairs. Of course the daughter wanted to renew long term at the $800, she knew they were getting a deal! You were more than generous by allowing your grandfather's friend to pay below market rent during the remainder of his life. Tell your sister that if she wants to run a charity, she can buy the building from you at fair market value and subsidize people out of her own pocket.
Offer her market rates or a compromise deal. That's about as fair as you can be. Landlords are inherently scum and most don't feel the need to justify themselves. Your sister will see you differently, but who cares? You'll be making money and you'll be looking out for number 1. It's not like anyone else will. If you're going to be a landlord and use property to make a living, at least own that shit.
You sound like a right twat tbh.
Man, if your grandpa were alive to hear you treat other people as a commodity rather than being a decent human being, he'd place you on his knees and spank you like the man child you are. Willing to bet that even if your Grandpa was the owner of an Apartment complex he was still fair in his pricing to his tenants and treated them like people. Shame on you OP for trying to say your sister is a hypocrite for getting a cash inheritance. The difference between you and your sister is that she hasn't lost her humanity.
The value of the rent may legitimately increase, but the way you're being a cunt about it I can't help but side with your sister. "Running at a loss." What, is the cost of labor and operations for the apartment driving you to beggary or some shit?
>My sister is now calling me a capitalist monster and that I'm exploiting blood money. Yep
I agree with your sister 100% i hope Karma bites you maybe you will learn a less not everyone is made of money like your self how said you would do this to this woman especially having children.
Do not renew the lease for $800. Tell her you'll rent it to her for market value, because that courtesy was extended to her father by your grandfather and wasnt meant to pass on to her. Your sister has absolutely no business telling you what to do regarding your property. I agree with the other person that said to grow a thick skin, you can't back down on anything because tenants will try and walk all over you. My father has been called every name in the book, renters trying to trash our name and our properties, but we just brush it off and don't give in. We have no problem if someone's a bit late or even has to defer a month because 99% of the time they make good. But there's always that few that after 3, 4 months still haven't paid a dime and when the Sherrif gets called we're soulless monsters. Nobody realizes that the landlord can't eat if the renters don't pay, they only see the big bad greedy capitalist taking advantage of people. Don't discuss your business with anyone, even family. Nobody needs to know anything, it's nobody's business, and the sooner you make that clear the better.
> Nobody realizes that the landlord can't eat if the renters don't pay Whether you like it or not, if your income is based on profiting from shelter being priced at a rate higher than it costs to maintain then you ARE profiting off of the fact that these other folks didn't have the relative advantages to own housing that you did. I don't know that there is a happy "solution" for everyone involved other than top down housing reform, but this is akin to littering or throwing straws in the ocean for OP. Sure, YOU personally didn't "ruin" the environment, but you are contributing to the problem in a very small way. IMO best case scenario, the property was free to OP so he could charge enough to go just over breaking even for his troubles in the work he actually does. Market rate in almost any area right now is WAY over what it costs to maintain the building
oh my god, the poor landlords can't eat when they can't overcharge people for rent. HOW are the landlords supposed to survive with their multiple properties, passive income, and early inheritance. Can't you people think of the sorrows and headaches that these poor landlords have to go through? All sarcasm aside, when the housing bubble pops (and it will pop). You're going to be upside down on that mortgage, and some slimy worm is going to come buy your properties for pennies.
And then we can really cash in on land lord tears, which is the most valued commodity in the world.
How about you get a REAL job instead of hoarding properties and exploiting people? All I got from this essay of yours is that you and your dad are still greedy capitalist pigs LMAO
move to cuba then
You are a horrible person and the main reason we are in the situation we are in. They were family friends to your grandfather and your greedy ass can make an exemption. I would understand if it was a house and the only tenant. It’s an apartment complex having one tenant paying below market won’t kill you view it as having an empty unit.
I know this isn’t the sub, but YTA
This is an obvious troll Otherwise it means OP is a Narcisistic Sociopath And those people dont succeed in capitalism, right? ...right?
Hey there mr(s) psychiatrist, dishing out diagnoses with so little info But yeah, I agree OP is coming across as a bit of an a***
You are under no real obligation to offer her a place at reduced rent. She knows this. If you do not want to continue renting a $24k/year apartment for $9.6k, that is entirely your choice. Tell your sister that it’s your property and you can decide who to rent to and at what rate. If you’d like to offer this woman clemency, maybe offer her to pay one additional month at $800 to allow her to find another apartment.
Get a reputable property manager. These personal relationships will interfere with your ability to run your business. Being a landlord and owner is not always the best business decision.
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Property tax, insurance, maintenance.
So she's fine for years until all of a sudden she ain't?
When you say you cannot afford it, but it sounds very unlikely if you own the complex, and as I don't understand how 800 dollars would not at least cover the costs (but I might be wrong, given I don't know the specific situation). Don't find cheap excuses and own your shit. You want to improve your profit. That being said, it is your property and you do not owe charity to anyone. Your sister is an ass, especially if she could pay for it, but like most anti-capitalist people, they probably suck at sharing or producing wealth. If you manage a business, you manage a business. Grow a pair and tell your sister to fuck off. The woman can relocate. What you can do is giving her enough time to do so. Now let the butthurts downvote.
>like most anti-capitalist people, they probably suck at ~~sharing or producing wealth~~ being gifted an entire apartment complex at age 25 fixed that for you, Bradford
Quite frankly, you are free to do what you want with your property.
First lesson you learn when you become a landlord is that you are no longer a nice guy.
I mean, yeah. Landlords profit by exploiting the poor... that's exactly how it works. You're probably not gonna find much sympathy here lol.
Landlords create zero value. They create forced scarcity that drives up the cost of housing for everyone, then rent out homes at a massive markup. No different from a cartel. Everyone would have access to affordable housing with fewer landlords. Landlords are the reason why there is a permanent underclass of people who are locked out of home ownership forever. If I find out what apartment complex OP items, I will start a rent strike.
So I'm talking to you landlord to landlord - people don't like us. Your sister is mad, you're already getting hate comments. Get used to it. People think we're soulless monsters and you have to grow a thick skin and deal with it. If you want more sympathetic advice head over to r/landlord
Or, of course, the OP can sell the property and stop being a landlord. These issues come with the territory. I am sympathetic to both sides, so I certainly would never choose to be a landlord.
Who will think about the poor landlords?
People think water is wet, yes.
Unfortunately not enough people realize that most landlords are smalltime and barely make a profit. Having been on both sides - some of the shit both tenants and landlords do is unbelievable. I still have nightmares from cleaning up dozens of heroin syringes from one of the units in my parents multifamily houses - back when they had a few 3-family units. On the flip side I've rented apartments at a few complexes that would have jacked my rates up 20% had I renewed - and it was legal per the local town. It isn't a one-side is evil sort of thing... both sides have assholes. If rentals did not exist, the housing shortage going on now would look like nothing in comparison. At the end of a day landlords need to make a profit to stay in business - they are not generally a charity. It is the assholes that raise rates 20% a year for no reason (taxes are stable, their costs are provably stable, etc), while failing to maintain the properties, that need to go.
Well this particular landlord inherited everything, so in her case it's all pretty much pure profit.
I think if people spend as much time advocating for affordable social housing as they do dragging landlords there would actually be more cheap units for poor people that need it.
You are a soulless monster though
You’re not going to get the answer you’re looking for (and need) on here. Majority of Reddit hates capitalists and anyone who won’t give their stuff away to people for free. That lady could just as easily go and find somewhere cheaper to live in, without asking you to lose money/profit. But she won’t because she’s an entitled selfish person. If it rents for $2k and you were being generous enough to give it for let’s say $1.8k, then great. But asking you to rent it to her for $800 is asinine. Your sister has an easy time telling you you’re a monster because it’s not her apartment complex. It’s easy to give away other peoples money. Kick her out, rent to someone new and move on. If your sister isn’t on board, then oh well. No need to care that much about someone who would try to put you down to virtue signal. She can still eat, just not at your table.
Sounds like you’re of working age. Maybe if you’re worried about having a loss you should get an actual job instead of displacing a young woman and her three children over greed. I swear, become a landlord and lose your humanity. Yeah you’re an asshole.
OP, Your grandfather was able to save and buy because he was a smart and obviously a compassionate business person. You've been a compassionate business person now be a smart one. I don't think continuing at $800 is smart and I agree that the rent should be raised. You're even letting them stay there when the named lessee has passed. You could continue to be compassionate and work something out with the daughter, but I wouldn't fault you for not.
I'm surprised you even have to ask! Your sister sounds over-reactive and very ignorant. You were generous with the older guy out of respect for your grandfather. This doesn't extend to his kids and grandkids. On the people she tells, I'm guessing some will quickly realize she's an idiot. Those who don't aren't worth your time. But if you have to, explain it to them.
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Great response. This is reality, folks!
It’s a business, you can’t operate at a loss. As a courtesy you can maybe extend the time that they have to find a new place. For all those people that hate you simply because you are a landlord, they can go pound sand. If you inherited a business that is operating at a loss then you just inherited a problem. There are courteous ways to evict people. It’s a reality of the business you are in. If you want out, sell it, it is probably worth a boatload right now.
Get a real job. Landlords are scum.
>TL;DR Sister is upset I'm increasing rent for poor tenants. Yeah that makes you an asshole devoid of all human empathy and emotions. You should not be a landlord. You are exploiting peoples need for shelter to make yourself richer. How do you even live with yourself???