A Sudden Increase in Rent
Posted on October 15, 2018 by Genet Group
Over time, neighborhoods grow and change. Take for example the Meatpacking District in New York City. Though it’s had a history spanning far before the industrial revolution, its name comes from the time in which it was a large industrial powerhouse of a neighborhood, filled with factories and warehouses. Now? It’s become a much more diverse and bustling spot for commerce and for residence. Any neighborhood on a similar path would likely be dubbed “up and coming,” with new restaurants moving in, new real estate developments, and an influx of people with money to spend at these new spots. Case in point: the entire landscape of a location can change in a matter of years.
Naturally, as neighborhoods change over time, so do the prices of renting property within them. When the Meatpacking District was still filled with factories the cost of living there was marginally low. Now? Definitely not.
If you currently lease property in a commercial lot that’s had an influx of business, or in a neighborhood that’s recently had a real estate boom, you might come across the dreaded notice from your property manager: an increase in the price of rent. What should you do when faced with this change?
First off, assess your financial situation. Can you realistically afford this increase in rent? How much more will it cost you over time and what could it mean for your business to incur this increased cost? It can be expensive to move, but the one-time cost of a move to a cheaper location might be less than the long term cost of an increase in rent.
Consider the increase in business that might come from a neighborhood that’s “up and coming.” If your business is a storefront, would it be beneficial to stay in an area that is rising in popularity even if it costs a little more than you initially intended it to?
Most importantly: speak to your landlord or property manager about the reasoning behind the increase in rent. If there’s nothing that can be negotiated, your best bet is to assess the financial pros and cons to determine if you should stay or if you should go.