Temporary Rental Agreements..LegalIncreases $$$

[el_expatriado]

Regardless if you are using your rental income as your "salary", if your overhead linked to your income generating asset did not increase 25% then in my opinion it's not fair to pass that kind of increase along to the tenant.

Your supposition assumes that most businesses (or landlords) use their cost when determining pricing. And therefore when costs increase, prices must increase in the same proportion. Mostly this is not the case. People charge whatever the market will bear. Usually businesses (landlords in this case) are trying to find the sweet spot -- the maximum price they can charge without generating a vacancy. In fact, if the guy has multiple apartments he's probably charging too little if they are all full. Basic economic theory says he should keep raising prices on everybody until he starts generating vacancies.

 

[allcraz]

In this building with 150 apts. there is a waiting list for units, Apts. are empty only for a day or two for cleaning purposes.

Well there you go...simple supply and demand. This doesn't sound necessarily unfair to me, it just sounds like the way business has worked for thousands of years. Although it is frustrating for you, the renter, it's still a supply/demand reality. You don't have a contract, and the landlord can do as he pleases. If you don't like it, it sounds as though the next person will! Sorry. Either you pay because you have the money and love the building/location/apartment, or you look elsewhere. Of course, it never hurts to ask. You can always see if the landlord may reason with you.

 

[Montauk_Project]

Next apartment you rent, get a contract so if this happens you might have some legal recourse. The only thing you could maybe do is threaten to turn her into the AFIP for not declaring her rental income, but that could get UGLY, real UGLY. Or threaten not to vacate and have have to go to court to evict you, which will take about 6 months. But you will be going to war, she could hire thugs to burn you out.

 

[GS_Dirtboy]

Your supposition assumes that most businesses (or landlords) use their cost when determining pricing. And therefore when costs increase, prices must increase in the same proportion. Mostly this is not the case. People charge whatever the market will bear. Usually businesses (landlords in this case) are trying to find the sweet spot -- the maximum price they can charge without generating a vacancy. In fact, if the guy has multiple apartments he's probably charging too little if they are all full. Basic economic theory says he should keep raising prices on everybody until he starts generating vacancies.

Bingo. I manage a business here. We set our prices based on market need. If there is un-met need, or latency, in the market then we add services / raise prices. We then look at our cost structure. The difference between revenue and costs is one basis for determining whether we want to stay in that business or not.

 

[arlean]

Interesting discussion. Before I begin , let me say I LOVE Argentina. I also see DavidGlen''s point, we pay all the expenses as renters so we are bearing the increases, not the landlord (I too have been a landlord in the States where the landlord pays all expenses so I particularly understand his point).

What I wanted to throw in here is an Argentine living in the States told me that the mentality in Latin America is that there is a pie that is only so big. One of us is a winner and one a loser. If I get more of the pie, then he is left with less and so he needs to get more and leave me the one that gets less.

He pointed out that in the States our philosophy is for win-win--both of the parties to the contract win; there is no pie. If I do a good job on my part and I am fair with you, keep my prices and responses timely, as DavidGlen describes, then I am rewarded because you pay for my services and you are a good and ongoing customer.

He also told me that in Argentina there is no concept that if you continue to return again and again as my customer I will make hunderds, even thousands of dollars from our relationship in the long run. He said that is just beyond Argentine thinking, that the goal is to get as much out of you as possible right now with no thought for the losses that may cause me in the future as you go looking for a more fair deal and I lose you as a customer. I don't know if this is true and I keep analyzing it. I deal with some Argentines who seem to care but I have abandoned people whose business practices I didn't like.

 

[arlean]

P.S. On the other hand, there is truth in the fact that, as inflation rises, and the peso is worth less, then everything will rise in cost (though in fact that is not what is happening, it is that the value of the peso is falling) everything requires more pesos, including rent.

 

[Ana Berger]

I don't know the situation of your landlord, but I have an apartment for rent and the financial situation is as follows: the maintenance expenses are 50% of the rent (that's what happens if your doorman of 5 apartments get 11k, including taxes and premiums 21k), the tax on rental income is 21%, and then there are the local taxes, annual property tax and cost accountant. The costs do increase. All in all I am happy if I am flat.

 

[sergio]

Arlean's Latino friend in the US is right about the Latin attitude toward business. It is a simple reality and no matter how nice, considerate and upright a tenant may be, he or she is seldom treated with respect by owners. It 's a mentality and the sooner expats accept it and learn to live with it, the less frustrated they will be. Many expats here have blasted other expats because they want Argentina to be more like their own country, usually the US. They say that we should accept the culture. Why doesn't this apply to the culture of renting? How many times have I seen threats here from expats who want to sic the tax authorities on owners -- a lot! Litigation is a kind of reflexive reaction by a lot of Americans. Has it ever occured to some expats that owners are people trying to get by in a messed up economic system? Property is the Argentine pension. Do you think anyone can live like a human on their miserable state pension? And you need to be 30 years in the system to get a penny. Most owners are products of a culture that does not appreciate American ideas about customer service or integrity. Few have any experience with it. They just have distorted ideas about American capitalism from the govt and media propaganda. Expecting what is not a part of the culture is expecting too much. Obviously you can't allow yourself to be cheated but you can walk away from rent increases if you don't like it without threatening and blowing up because the system is not like the US. That's the way it is.

 

[joeteixido]

Interesting discussion. Before I begin , let me say I LOVE Argentina. I also see DavidGlen''s point, we pay all the expenses as renters so we are bearing the increases, not the landlord (I too have been a landlord in the States where the landlord pays all expenses so I particularly understand his point).

What I wanted to throw in here is an Argentine living in the States told me that the mentality in Latin America is that there is a pie that is only so big. One of us is a winner and one a loser. If I get more of the pie, then he is left with less and so he needs to get more and leave me the one that gets less.

He pointed out that in the States our philosophy is for win-win--both of the parties to the contract win; there is no pie. If I do a good job on my part and I am fair with you, keep my prices and responses timely, as DavidGlen describes, then I am rewarded because you pay for my services and you are a good and ongoing customer.

He also told me that in Argentina there is no concept that if you continue to return again and again as my customer I will make hunderds, even thousands of dollars from our relationship in the long run. He said that is just beyond Argentine thinking, that the goal is to get as much out of you as possible right now with no thought for the losses that may cause me in the future as you go looking for a more fair deal and I lose you as a customer. I don't know if this is true and I keep analyzing it. I deal with some Argentines who seem to care but I have abandoned people whose business practices I didn't like.

I was just talking to my Argentine wife on these lines the other day. It is not a rule, but I think you are right for the most part. I was astonished by the lack of negotiation skills found in general. In example, and not to hijack the thread, I am into collectibles (a lot of useless stuff) and sometimes they see you as a "foreigner" sothey ask 300% what they just asked my wife 2 mins ago. When you try to "negotiate" something you usually get a "te pensas que soy boludo" statement of some sort, not a second offer, nothing. Usually ZERO value is given on building a client-customer relationship and it happens with everything from used cars, to renting, everything is according to "la cara del cliente" too

There are exceptions tho, there are a couple of guys that while not the cheapest I always kept going back to (like I go to their store once a week) and sometimes I even walk in and have a coffee with the owner and I don't need to buy anything. I know that when he finds something interesting he will call me first, and I will make him an offer, then he'll probably come with some other number and we "negotiate" something that is fair for both parts... no hard feeling of any kinds towards each other for saying "hey I'm not comfy with that number, what about X"... and that is why I take my business there.

As far as renting goes, I was just announced mine will go from 2.4k to 3.8k AR$ when my current contract expires within a few months. I think they are trying to take advantage of the fact that we are having a baby boy in 2 weeks and we won't be able to hunt for another appartment fast enough. They KNOW they have guaranteed business with me and I was never late, apt is in much better condition because we did some improvements, we have a great relationship with everybody else in the building... and yet they will try to squeeze a little more out of us :/

 

[el_expatriado]

I was just talking to my Argentine wife on these lines the other day. It is not a rule, but I think you are right for the most part. I was astonished by the lack of negotiation skills found in general.

As far as renting goes, I was just announced mine will go from 2.4k to 3.8k AR$ when my current contract expires within a few months. I think they are trying to take advantage of the fact that we are having a baby boy in 2 weeks and we won't be able to hunt for another appartment fast enough. They KNOW they have guaranteed business with me and I was never late, apt is in much better condition because we did some improvements, we have a great relationship with everybody else in the building... and yet they will try to squeeze a little more out of us :/

It sounds like your landlord is a pretty good negotiator. The first step in any negotiation is to be prepared to walk away. It seems you've got nowhere to go and you have announced this fact to your landlord. BTW, are you on a 2 year contract? If so, a 50% increase after 2 years doesn't seem unreasonable to me.