The Pros and Cons of Rent Control
There’s been a lot of debate and protest about rent control in America lately, so on this week’s episode we will cover some of the pros and cons of rent control. Check out the full episode and if you have questions about how to get started with Homeowner Prep, be sure to reach out to us or drop your question in the comments.
What You’ll Learn from this Episode:
- What Is Rent Control?
- How Does Rent Control Impact Communities
- The Difference Between Renters and Aspiring Homeowners
- And much more!
00:00 Is Rent Control A Good Thing For You?
00:32 Welcome To The Homeowner Prep Podcast
00:43 What Is Rent Control?
01:18 Pro – Landlords Can’t Keep Increasing Rent
02:08 Con – Harder To Find Available Homes
02:45 Pro – There Is More Community Stability
03:18 Con – Landlords Aren’t Doing Updates
04:00 Pro – Money & Spending Stays Local
04:45 My Opinion On Rent Control
05:48 Getting Started With Homeowner Prep
06:13 Connect With Us On Social Media
“You should always be looking to buy, you should always be an aspiring homeowner, and not just a renter.”Eric Hellon
Full Episode Transcript:
There’s been a lot of debate and protests about rent control in America lately, and so I want to go over some of the pros and cons of rent control to see if it’s truly a good thing for you.
Welcome to The Homeowner Prep Podcast, where every week we educate and encourage aspiring homeowners to help them buy their first home faster. If you aspire to own a home, you’re in the right place, so enjoy. Do us a favor and leave a review, a rating, and be sure to subscribe. Now, let’s get to this week’s episode.
Hello, and welcome to another episode of The Homeowner Prep Podcast. I’m your host, Eric Hellon, and on today’s episode, we’re going to talk about a hot button topic called rent control. If you’re not familiar with what rent control is, it’s when a local government or a city ordinance puts in place rules in how much a landlord can charge for a rental unit.
Now, it might be an apartment, might be duplexes, whatever the case may be, there’s different laws in different cities, but it definitely sets a cap on how much landlords can charge renters. So is that a good thing or is that a bad thing? On today’s episode, I want to dive into just a few of the pros and cons and let you know what my opinion on rent control is.
The first pro that is obviously a good one is that landlords can’t charge more and more and more each and every year. Now, renters are like, finally, you’re not going to raise my rent, there’s a cap to that. But it doesn’t necessarily mean that it’s going to cap out where you’re at. A new rent control ordinance in your area may cap your rental unit at, say, $3,000 a month and if you’re currently paying $2,500 a month, that means that your rent can still go up. Now, it can’t go up more than the $3,000, but it could possibly go to $3,000 the very next year. So yes, there is a cap on it, but it doesn’t necessarily mean that you’re paying the cap. Now, that cap could be dictated by the city or whatever the ordinance is, and it could be more than what you’re currently paying.
Now, one of the cons about rent control is that it becomes very difficult for you to find an available rental unit and the reason for that is because people who have rent control in place are less likely to move. They figure, hey, you can’t raise my rent anymore, I’m already at the cap, so I might as well stay here. No need for me to go and find a new place where I could be paying more rent. So renters who are on rent control tend to stay put.
So let’s say you’re new to a neighborhood or a city and you’re trying to find an available rental. Well, if there’s rent control in place, chances are it’s going to be a lot harder for you to find an available place.
Another pro to rent control is that it actually provides more stability in a community. You tend to know your neighbors. If people are staying put longer, you can build relationships with folks, you can actually know who is around you and not have to worry about new noisy neighbors moving in. So it does provide some stability to your community, or let’s say on your street, so you know who the folks are coming in and going and you’re not too concerned about new faces showing up. So that’s definitely a pro because it does provide some community stability.
However, because tenants are more likely to stay put for longer, landlords are actually incentivized not to upgrade your unit. So if you’re looking for a rental and you happen to move to a new city, if there’s rent control in place, chances are you’re going to find some outdated places that need upgrades. But landlords are not going to make those upgrades. There’s no reason for them to spend extra money on a unit when they’re not getting any more income coming in. So a lot of times these units are outdated, they’re old, they have a feel that somebody has been living there for years. Even if you’re the new tenant, you’re not going to see many upgrades.
Another pro to consider is actually that if people stay put and they establish roots in the community, they’re more likely to spend money within that community. They’re more likely to visit the mom and pop shops and establish those relationships. It goes back to the stability of the community. If you plan to be in a community for the long term, you’re going to establish relationships with people who are there all the time, the small businesses, the mom and pop shops, the people who are shopping in and out of the same stores. You’re going to know those faces and you’re going to make those relationships last. So it does benefit the community, the fact that you’re going to spend more money locally instead of going outside of that neighborhood and spending money there.
Now, I gave you some pros and cons, but in my opinion, here’s why I think rent control is a real issue. I am all about people renting for a temporary situation. If you move to a new city, if you’re in the military, if you’re just trying to establish some roots and get to know an area, sure it’s good for you to rent in that area before you decide to buy. But however, you should always be looking to buy. You should always be an aspiring homeowner and not just a renter, you should be planning to buy and not planning to pay off somebody’s mortgage.
So I’m all about people making moves, having mobility. Yes, you can rent in the temporary, but for the long term you should be striving to become a homeowner. And that’s really my issue with rent control. I get it. There are pros. There are cons. It’s highly debatable. It’s a hot topic, and I know that. But you have to understand that if you truly want to build generational wealth in this country, you need to become a homeowner.
If you’re looking to make that transition from renting to becoming a homeowner, no matter how long it’s going to take, we can help you. That’s what Homeowner Prep does, so feel free to reach out to us.
You can actually get started with us by texting the word START to 619-848-3700 or you can visit us on our website at www.homeownerprep.com/start and you can set up a free initial consultation.
If you just have a question or scenario that you want to run by us, feel free to reach out to us on any of our social media channels. We tend to get the majority of our questions on our Instagram account @HomeownerPrep.
I hope you got some great information from today’s episode, and I hope that you understand some of the pros and cons of rent control. I look forward to providing you with some more great content on the next episode. And until then, be blessed.
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