Grow Property Management owner Joe White answers the question on how much should a property owner landlord increase the rents because of inflation.
Read full transcript here:
0:00 this question is from Terry Terry asked 0:03how much are you racing your rent
0:05because of inflation
0:07um
0:08that’s not really the way it works so we
0:10charge as property management company in
0:13a pretty efficient property management
0:14company uh we charge what the market
0:17well there so the we charge as much rent
0:20as a tenant is going to pay within a
0:24reasonable amount of time vacancy gets
0:26extremely expensive so we don’t want the
0:27property sitting vacant because it’s
0:28costing the property owners a fortune
0:31and thousands of dollars a month in rent
0:33but we basically
0:36put the property on on within asking
0:38price and we very religiously uh check
0:43the metrics on it so we want to see what
0:44kind of traffic we’re getting we need to
0:46get X number of inquiries a day uh and X
0:49number of those inquiries uh that folks
0:52who actually asked to see the property
0:54and at that point we know the property
0:55is likely Priced Right and
0:58will rent within a reasonable amount of
1:00time so what we’re not basing it on
1:02would be things such as inflation or our
1:05expenses and it’s kind of a common
1:07question owners will ask us well tell us
1:10what their mortgage payment is and
1:11that’s just not something that comes
1:13into the equation so your expenses as a
1:17property owner
1:18or not something that actually uh
1:21really matters uh relative to what a
1:24tennis is going to play for your
1:26property whether they’re going to pay
1:27more or less so if you have a very
1:29expensive air conditioning repair that
1:30costs you seven thousand dollars if your
1:32mortgage payment somehow went up uh
1:35whatever it would be your expenses do
1:37not matter to a tenant that’s looking
1:39for a place to live so we charge the
1:42absolute most money that we can get from
1:44a tenant and that is uh not relating to
1:47any outside factors
1:49um now I mean as far as inflation goes I
1:51mean
1:52rents do tend to go up and and up Market
1:55when the real estate is doing well and
1:58unfortunately for tenants rents tend to
1:59go up in a down Market as well so 10
2:02rents generally speaking rarely ever go
2:05down now as far as inflation affecting
2:08you the landlord the property owner and
2:10things are getting more expensive for
2:11you and thus they should be getting more
2:13expensive at the tenant well if you have
2:14any debt on the property you actually
2:16are kind of hitting the jackpot so uh
2:18inflation is an Investor’s best friend
2:21so yes when I go and get gas yes when I
2:24go and buy things uh that help me have a
2:27rental property much more expensive but
2:30all the debt that I have on the property
2:32is actually getting devalued so you are
2:34getting that benefit so even if you’re
2:36getting a hit with inflation and things
2:38are more expensive at owning a rental
2:40property you can take comfort in the
2:43fact that you’re actually just making a
2:44huge huge killing just with any debt
2:47that you know I have so every dollar you
2:49owe this time next year because of
2:51inflation is devaluating so you’re
2:52actually getting a massive return right
2:54now I mean if inflation is going to hit
2:55around eight percent you’re giving it
2:57eight percent additional return on your
2:59on your money so uh so yeah we can’t
3:02really so what you should be sure right
3:04on is how much you rent you can get uh
3:07you know from a tenant and that’s how
3:09much you should rent your your rent time
3:11all right good luck
