The landlords strike back

One of the beautiful lessons learned for NYC neophyte renters. Hopefully next time around they'll see the month free as a what it is, a month "concession" not a rent reduction. Pocket the cash and enjoy that month...don't rely on using it to offset your monthly rent going forward...

I do not understand how most renters do not understand. Considering a lot of times the lease is written for 13 or 14 months depending on one or two months free, with the rent reduction prorated over the 14 months.

I actually find it sort of amusing in a sense that people start quoting 15-20% increases when the majority of the amount is the concession of a free month going away. Then start ranting that the landlord is ripping them off. Well sorry that you did not understand what you were renting, but in this case the landlord is just getting back the money they would have made in a better market.

This is why i decided to buy and not rent. to much uncertainty in what a landlord would/can do in terms of raising rents year to year. And those few down years in the cycle will never make up for the fact that the landlord could raise you 5-10% a year during the good times.

Renters can be very short sighted. They look at the current lease and extrapolate out never considering that the economics may change.

just like buyers who get an ARM and complain they can't afford their mortgage when rates start to climb - never THINKING that rates would change from historic lows??

Hey now, even Obama said the mortagees were preyed upon!

Renters! blah!

There was no shortgages of bad practices in mortgage lending, however when you consider the scope of the mortgage problem, it only makes sense when you realize that the under-water mortgages was not purely a function of home prices declining, but of borrowers repeatedly refinancing and taking out additional equity. Lots of people screwed themselves.

Well, no argument that neophyte renters are often going to lose in negotiations with experienced landlords but the "concession" is only the landlords' way of arguing it. To the renter, the net rent is what you paid overall for the year and if you don't understand that as your argument, you have already lost. You also have to be aware of the market and willing to walk, which the guy in the article obviously was not. Does anybody think that the landlord doesn't lose a months rent plus labor when a new tenant comes in? The LL does, even if it is not reported by the crack journalists at NY1.

There's a psychology issue at play. Most people approach something based on their recent experience. To the extent they project variation they usually build in some expectation using the recent past and unwittingly follow some reversion to the mean.

> Renters can be very short sighted. They look at the current lease and extrapolate out never
> considering that the economics may change.

> > just like buyers who get an ARM and complain they can't afford their mortgage when rates start to
> > climb - never THINKING that rates would change from historic lows??

Or just like the buyers who think that rising prices in past mean rising prices in future.

I simply don't understand the assumption that incentives should be recurring. Renters see best served by viewing a free month as a one time windfall that can be used to cover moving costs or a new couch, etc.

I would argue renters as a class are more short-sighted. Renting by it's very nature is a short-term arrangement.

Yet, amazingly, much of American managed to be even more short-sighted buying places they could afford the payments on...

I actually rent short-term because of the long-term implications.

> I simply don't understand the assumption that incentives should be recurring.

Because landlords react to market drops with incentives as much (of not more) as they do with rent reductions. The assumption starts with the landlords, who see it as the same thing with a better story.

Actually the person buying 0-5% down was very rational. It was rent, with a call option in case of HPA and a put in case the price declined.

What do you think the risks of renting are?