Five Signs Your Rent Is About to Go Up
More than 45 million Americans rent their homes, and about half of them are “burdened” by their rent, meaning they spend more than 30% of their income on housing (more than 12 million of them are spending more than half their income on housing, which is terrifying).
Calculating how much rent you can afford and using various strategies to find cheaper rent in your area tend to be very present-focused in the sense that it’s dealing with what the rent is now and what you can afford to pay now. But rents have been rising for a long time now (19% since 2019, on average), which is faster than wage growth. If you found an apartment you could barely afford a few years ago, all it takes is a rent increase to push you into crisis mode, searching for creative ways to cover the rent.
Generally speaking, your landlord can raise rent as much as they like, with few restrictions—only a handful of states have any sort of rent control law, and most states actively ban such laws. You can always try to negotiate rent increases, of course, but instead of waiting for that letter from your landlord to arrive, it’s always better to be forewarned. Knowing the signs that a rent increase is coming your way soon will give you the runway to plan a negotiation, launch a search for a cheaper place, or adjust your budget to absorb the hit, if possible. Here’s how to tell that your landlord is about to hit you with a rent increase.
Your landlord's renovating the place
One of the most obvious signs that your landlord is about to raise your rent sky-high is a sudden interest in repairing and renovating your home. Improvements to apartments or rental houses make them more attractive to other renters, justifying a rent increase. And landlords typically calculate an increase in rent to defray the costs of renovation.
So if your landlord is suddenly paying attention to your complaints about an ancient bathroom or wants to gut the kitchen and put in new flooring, don’t celebrate—start making plans, because your rent will likely jump up as soon as your lease allows.
Foreclosures in the neighborhood
Paying attention to foreclosure rates in your area can be a good way to predict rent increases, because all those people who are being forced out of their homes have to find someplace to live. A wave of foreclosures in your neighborhood translates to a surge of people needing a place to rent, and that increased demand can drive up rents everywhere. If you notice a lot of homes on your block being sold by the bank, brace yourself for that rent increase letter.
Rental inventory goes down
Similarly, if you notice there are a lot fewer homes being offered for rent in your area, that’s a sure sign that demand has spiked. And when demand spikes, rents eventually follow because property owners know they can get higher rents. Check sites like Trulia or Zillow regularly to have an idea of the typical supply of rental homes in your area. If you notice a sudden plunge in availability, you might be staring down a rent increase as a result.
Utility costs in the area go up
If your landlord pays the utilities for your rental, they’ve worked out how much to pad your rent to cover typical usage. If the costs of heat, electricity, gas, and water shoot up, so will your rent. You can use a site like EnergyBot to see the rates in your area. Check every few months to make sure that there hasn’t been a recent spike that could inspire your landlord to rethink their rents.
Other rents are rising
Finally, a sure sign that your rent is going up is when other rents go up in your area. This is especially true in the modern era of algorithmic rent determination tools like RealPage, which help landlords determine the absolute highest rent they can squeeze out of their properties—the more landlords that use these technologies, the more monolithic rents will become. If your neighbor complains about a huge spike in their rent, it could be a clear sign that the wave is about to hit you as well.
If you see the signs and have a little warning that your rent is going up, you have time to try to adjust your budget, find a cheaper place, or consider a roommate or other way to subsidize your housing costs. That’s a lot better than being blindsided by that rent increase letter in your mailbox.
In light of the rising rents, averaging a 19% increase since 2019, managing your budget to accommodate potential rent increase becomes crucial. If you notice your landlord making significant renovations to your property, it might indicate an impending rent increase, as landlords often use renovations to justify higher rents.
Given the high number of Americans struggling with rent burden, with about half spending more than 30% of their income on housing, dealing with potential money-draining rent increases becomes a crucial aspect of financial planning.
