Due to the rising rental rates in major cities, affordable housing has become a growing concern. And to mitigate this issue, rent control regulations have been implemented to protect tenants from being overcharged.
In simple words, rent control is a government program to protect tenants by limiting how much landlords can raise the rent.
While rent control tries to make housing more accessible, it also has a substantial influence on the supply and quality of rental homes. If you’re thinking about renting in a rent-controlled region, you should know how these restrictions influence your alternatives.
Scarcity of Rental Properties
Rent control allows the landlords to raise rent only by a fixed percentage which often leads to a reduced supply of available rental units. Since landlords can only raise the rent by a fixed percentage, some may choose not to rent out their existing properties.
Instead of that they may prefer to use short-term rentals or sell them to the potential tenants.
Dominance of Older Buildings
In most of the areas with rent control, the rules often don’t apply to newer buildings. This indicates that most rent-controlled apartments are in older buildings. Even though the rents are affordable for older buildings, they lack modern features. So, if you’re searching for up-to-date features, rent-regulated regions may not be an option.
Impact on Landlord Maintenance Investment
As a landlord, one always aims for timely property improvements and renovations. Similarly, a potential drawback of rent control is that it discourages the landlords from investing in upgrades. With limited rent increases, property owners may also have less rental income. Hence, this can lead to a decline in property value over time.
Tenancy Benefits
Being a tenant, residing in a rent-controlled property can be beneficial if you’re planning to live for the long term. These regulations restrict the increase in rent amount every year providing you the predictability & stability of housing costs. Furthermore, this helps tenants avoid being priced out of their homes in regions with rising rents.
Rent control offers both advantages and disadvantages for tenants. While it may provide long-term affordability, it may reduce the availability of renting alternatives.
Understanding the benefits and drawbacks of rent-controlled markets you can make an informed decision while looking for your next home.
But why navigate the rental process alone when a real estate expert can guide you every step of the way?
Contact Sapphire Agents today for personalised assistance.
