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[deleted] t1_jbk9cyi wrote

Reply to comment by flapjack212 in Newport Rental Crazy Price Increase 20-25%+ by recklessmax80

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micmaher99 t1_jbkdyne wrote

I work in commercial real estate. This is not true. Debt service coverage ratios on major commercial real estate never let a borrower pay 100% of the NOI in interest.

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flapjack212 t1_jbkajzw wrote

in your own example, if rent = mortgage + tax + maintenance and tax increases by 32% to balance the equation the rent side does not need to go up by 32%

how much the rent side needs to go up depends on the size of the tax component vs the mortgage + maintenance, which is again not directly related to each other. however you can make some directional guesses, in any case leading you to the conclusion that 25% increase in rent likely more than covers 32% increase in taxes.

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iron64 t1_jbkhqnb wrote

The property tax increases this year were unprecedented and contributed a lot to what you are seeing. Yes, there will always be landlords looking to bring their units in-line or just under the market rate for the brand new units in the city. But a lot of families that have owned for a long time (since the 90’s), who had their properties reevaluated in 2019 (probably had their taxes tripled then), and then got hit with the 30% increase in October are forced to either sell or increase rent to continue living here.

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