Rent control is inevitable in many areas, especially New York and parts of California. It was originally intended to keep housing affordable by limiting rent increases, but it has had a significant impact on the housing market in those environments. Many landlords abandoned their New York properties, because rent control laws resulted in them losing money rather than making any kind of profit. However, there are both benefits and disadvantages to rent control laws.
Pros of Rent Control
Though rent control tends to have a negative context for landlords, there are actually several benefits to rent control. Rent control areas have lower turnover rates than other areas. Tenants stay longer in rent control buildings, because they know they are receiving cheaper rates than they will if they move to an unprotected area. This will reduce the time and money that you have to spend on marketing to fulfill potential vacancies. These laws can also allow landlords to obtain property at relatively low prices, due to landlords not wishing to own property in a rent controlled area. Rent control also makes it easier for tenants to budget properly, which can increase the reliability of rent payments.
Cons of Rent Control
Rent control puts a cap on the amount of profit that a landlord can make. In some cases, landlords are unable to even make as much money as their expenses, resulting in the loss of money. The reduced cash flow can also make it difficult to obtain the resources necessary for efficient maintenance and repairs and makes it near impossible for landlords to invest money in upgrading their units. There are both pros and cons to units in rent controlled areas. Though rent control can cause a less than ideal situation for landlords, there are still some benefits to owning property in a rent controlled area. To learn more about the pros and cons of property in rent controlled areas, contact our experts at Keyrenter in Tahoma today!