Have you ever wondered how rental rates are determined, or what an amenity is? Then you're in the right place. Here is a compilation of frequently asked questions and basic information in regards to apartment rentals, straight from someone who works daily in the apartment industry.
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How are
rental rates determined?
Obviously rental rates vary greatly for many reasons, such
as number and type of amenities, and the size and condition
of unit. Rental Rates are also determined much the same way
as any other price for a product or service. The most common
determination for rental rates is based on the current
market conditions. Just like everything else, as demand goes
up, so do prices. For instance, if a landlord is able to
fill most or all of the vacancies in a reasonable amount of
time, rental rates are going to be higher than when the
landlord has one, two, or more vacant units. Larger
management companies are often going to be higher than
smaller companies or private landlords. The main reason for
this is because the larger management companies charge a
management fee to the property owners (often around 6%).
Management companies usually can also afford to offer more
services, such as longer office hours and 24x7 emergency
maintenance.
Why do
prices sometimes vary for similar apartment units within the
same building?
Landlords may assign different price points for units within
the building, even if they are basically the ‘same’ unit as
others within the building. One major reason for the
difference is the unit’s location. For instance, a unit next
to a major amenity, such as a laundry room or swimming pool,
may have a higher rental rate than one on the opposite end
of the building. Often times rental rates will also vary
depending on the floor. Top floor units are usually more
desired, especially if the building has an elevator, and
therefore may be priced higher. If the building does not
have an elevator, however, the lowest level could be in
higher demand. A higher priced unit may also have had more
recent improvements, such as newer carpeting or appliances.
Landlords also will often offer lower rental rates in period
of low demand to fill the vacancies.
Why
does my rent increase each time I renew my lease?
This is one of the most common questions asked by tenants.
Just like everything else, rental rates are bound to
increase. Just like a home owner, rental properties face
annual increases for things like property taxes, insurance,
and utility bills, and to maintain the same profit margin,
the communities must increase rental rates to cover the
increased costs. Also keep in mind that the rental rates are
often reduced below market to attract prospective renters,
hoping that the resident won’t want to move again when their
lease is up, despite an increase in rent. Rental rates
always reflect current market conditions at time (see “How
Are Prices Determined?”). The typical yearly increase for an
apartment is around $25, however can be even twice as much.
If you plan to stay in your apartment for a long period, it
is recommended that you lease the unit for the maximum time
allowed per company guidelines. This will not only lock you
into your rental rate for a longer time, but most landlords
offer lower rates for a longer lease period. All in all,
however, expect rental rates to continue to climb, along
with everything else.
Can a landlord raise my rent?
A landlord cannot alter a tenant's
rental rate, either by raising or lowering, provided the
tenant is on a current signed lease. Once the lease expires,
however, the rental rate can be changed. If the tenant is
not currently on a lease, or on a month-to-month lease,
local laws often state a specified time frame for which a
landlord must give warning prior to raising a tenant's rent,
which is usually 30 days.
What are standard lease
terms?
Lease terms are the obligations
and regulations that are agreed upon between the tenant and
landlord. They can range greatly between landlords, provided
they follow local and national laws. Amongst other things,
the lease states the current rental rate, and a time period
for which the tenant will be responsible for the unit. The
lease is a signed legal contract between the tenant and
landlord, and can lead to legal action if either party
violates the terms set forward within.
What happens if I
break my lease/move out early?
Most landlords require current
tenants to be on a current, signed lease that states the
term period for which the tenant will be responsible for the
unit. Should the tenant have to move out prior to the
expiration of the lease, often known as "breaking the
lease", the tenant can be charged additional fees for early
termination. These fees, often referred to as "re-rental
fees", must be clearly stated in the lease. The resident can
also be held responsible for rent until a replacement tenant
is found, or the lease expires, whichever comes first.
Always remember that a lease is a legal binding contract.
How much notice do
I have to give my landlord prior to vacating?
There is no law or regulation that
states how much notice a landlord can require prior to a
tenant vacating a unit, only that it is clearly stated in
the lease terms. The industry standard is 30-60 days. Larger
management companies often favor 60-day notices as they
often have more managed units, allowing them increased time
to find replacement tenants. It is not uncommon for
landlords to require a resident to submit the notice prior
to the first of the month in order to take effect.
What happens when my
lease term is up?
When your lease approaches the designated expiration
date, you typically have two choices to make: stay in the
unit, or vacate. Although not required, many landlords will
send out a reminder to tenants that are nearing expiration.
It is at this time that a landlord may adjust your rental
rate should you chose to renew your lease, which will most
likely increase (See Also: "Why does my rent increase each
time I renew my lease?"). Should you choose to vacate your
unit, make sure you follow the landlord's guidelines for
submitting a Notice to Vacate, which usually must be
submitted in writing. Most landlords require that notice be
submitted within a specified amount of time prior to
vacating, which is usually 30-60 days. Failure to submit a
proper notice can result in increased fees, including
additional rent, dependent on the lease guidelines. Just as
you have a choice to stay or leave, the landlord can also
choose not to renew your lease.
What is the difference
between a management company and private landlord?
In the past, all rental units were managed by a private
landlord, someone who owns all or part of the building
managed. Over the past twenty years, however, the percentage
of rentals that are managed by management companies has
increased dramatically. Larger management companies tend to
have higher rental rates than smaller companies or private
landlords. The main reason for this is because the larger
management companies charge a management fee to the property
owners (often around 6%). Management companies usually can
afford to offer more services, such as longer office hours
and 24x7 emergency maintenance.
What utilities are
typically included in rent?
Although the type of utilities that are included in the
rental rate range greatly from community to community, there
are some utiltiies that tend to be included more often than
others. Water, Sewer, Trash Removal, and Pest Control are
included in most rental units. Many units, especially large
complexes, also include Heat and Hot Water, which is usually
connected to a central boiler system. The tenant is almost
always responsible for electricity ("lights"), which can
include heat depending on the type of heating. Tenants
usually have to pay for gas in units that feature forced air
heat. Local housing authorities can also require that
certain utilities are included to qualify for certain
programs, such as Section 8 Vouchers. Additional utilities
that are becoming increasingly included with rent can
include cable, internet, and even dry cleaning. There is no
set standard for which utilities are included, so it is best
to check with the landlord.
What is Fair Housing?
Fair Housing is a set of local and national laws that
protect against housing discrimination based on age, gender,
race, religion, marital status, origin, prescience of
children, and disability. Income is not protected on
national fair housing laws, provided that the landlord sets
the same requirement for all prospective tenants. In fact,
many landlords require new tenants to gross a certain
percentage above the monthly rental rate (usually 3 times)
to qualify for the unit.
For what reasons can I
be evicted?
By law, you are entitled to your rental unit during the
specified time period stated on your lease, provided you
follow all the lease terms. Violation of lease terms,
including non-payment of rent, can lead to an eviction
notice being served by the landlord. A landlord can,
however, choose not to renew a tenant without a specified
reason.
