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Invitation Homes raises rents as much as possible. It seems unlikely a typical landlord would need to raise rent at the same rate because they maintain their o

Invitation Homes raises rents as much as possible. It seems unlikely a typical landlord would need to raise rent at the same rate because they maintain their own operations and have no duty to shareholders. An offer to buy from IH would need to beat IH’s own model for returns in such a substantial way that it would be overpriced and affect comparable home pricing in the area. Thus, it is not similar to making an unsolicited offer to some regular home owner.

nradov 5y ago
Most landlords raise rent as much as possible. Invitation Homes can't charge more than the market rate; their costs are irrelevant.
- DangitBobby 5y ago
  I hear people say this, but it's definitely not been my personal experience. I've rented at places where the rates were incredibly reasonable and did not increase. One guy let me rent month-to-month for over a year without ever increasing rent. Is there evidence to suggest that private landlords are mustache twirling villains?
  - nixgeek 5y ago
    In my limited experience with renting, self-managed properties often don’t hike rents annually. Feels to me like this is because the landlords aren’t tracking market movements and so don’t understand they can increase their gross revenue by 5-30% in some years because demand significantly outstrips supply in many metros. Managed properties the agent generally does have a lot of datapoints about the market and will raise the rents accordingly,. They can see what similar properties are fetching, they can see the result of hikes in terms of people who move out, and their incentive is the management fee is quite often a % of gross revenue. I’d go as far as saying charging significantly under the market rate for rents is financial mismanagement. You’ve got an asset delivering you income and you aren’t managing the return on the asset to be broadly what equivalent assets are returning to others. I don’t think charging the market rate makes you a mustache twirling villain.

nradov 5y ago

Most landlords raise rent as much as possible. Invitation Homes can't charge more than the market rate; their costs are irrelevant.

DangitBobby 5y ago
I hear people say this, but it's definitely not been my personal experience. I've rented at places where the rates were incredibly reasonable and did not increase. One guy let me rent month-to-month for over a year without ever increasing rent. Is there evidence to suggest that private landlords are mustache twirling villains?
- nixgeek 5y ago
  In my limited experience with renting, self-managed properties often don’t hike rents annually. Feels to me like this is because the landlords aren’t tracking market movements and so don’t understand they can increase their gross revenue by 5-30% in some years because demand significantly outstrips supply in many metros. Managed properties the agent generally does have a lot of datapoints about the market and will raise the rents accordingly,. They can see what similar properties are fetching, they can see the result of hikes in terms of people who move out, and their incentive is the management fee is quite often a % of gross revenue. I’d go as far as saying charging significantly under the market rate for rents is financial mismanagement. You’ve got an asset delivering you income and you aren’t managing the return on the asset to be broadly what equivalent assets are returning to others. I don’t think charging the market rate makes you a mustache twirling villain.