It's time for me to renew my apartment lease and the landlords are suggesting an increase of 5.8% over the "current" rent price and ~15% over the "effective rental rate" (because I got a free month when I signed the lease almost a year ago).
I think is excessive but I don't have good references. The considerations I'm making are the following:
- There have been available units in the building for almost a year.
- Some of those available apartments are listed for a price similar to what I'm currently paying.
- For the new asked price I could get a similar apartment in similar condos with gym and pool (this one doesn't have anything) or in a way better area (closer to supermarkets, restaurants, etc).
- There has been almost no inflation during 2014-2015.
I would like to negotiate, should I? is the rate increase that they are offering normal?
Money For Nothing(free on YouTube - youtube.com/watch?v=qDMkgmL-G24; start at 58:00 to 1:02:00). Under Volcker's Fed, asset prices were included in inflation, now they're not. What you're seeing is the result of asset price inflation; yes real estate has gone up, meaning you're going to start paying more, so there has been inflation. The current Fed does not include asset prices in its inflation calculation.