It’s no secret inflation is raging out of control this year. The price of everyday items, like milk, eggs, etc., has increased by staggering percentages. We’ve all seen it at the pump; the price of fuel has almost tripled in the last year. How does it affect landlords and the rental market?
Rising Rents
Rents are up. And rising higher. It is staggering to view our available rentals and see how little you get for so much. It is equally staggering to view repair invoices. The cost of simple repairs and appliances is ridiculously high, and getting higher. Landlords are charging more for their property, but they aren’t making more.
As the prices of everything rise, Landlords cannot afford to let the rent fall behind the market. You need to keep your profit margin and expenses within the same range. If you do not, you will not be able to afford to keep your property up-to-date and in good repair.
Cost of Fuel
Landlords with rural properties will feel the cost of fuel most. Tenants are going to be cutting down on travel time and making an effort to move closer to work. Remote properties will most likely experience longer turnovers.
Conclusion
One of the bonuses of owning real estate is that it retains value. The value can fluctuate, but it never is completely lost. Empire will be recommending the maximum legal rate for a rental raise this year. We’re in for a bit of a rough patch, but we’ll come through it fine.
As always, Happy Landlording!