Evening star. [volume] (Washington, D.C.) 1854-1972, 1919-10-18


About the only thing entering into
construction which has not increased
greatly is. the price of land. which, to-
day, is practically the same rs 1t was
in 1914, or possibly Just trifie higher.
Cause for Rental Increases.
Let US now consider why an in
creased rental should be paid. Take.
for instance. the management of an
apartment house. In few apartments.
however. have the rentals advanced to
a point where q proper return can be
had by the owner on his investment.
Coal. for instance, which he must buy
for the heating of his apartments, has
risen as follows:
Nut, which in 1914 was $3.50 per ton,
in 1919 is S11.5O per ton, showing an
increase of about so per cent. Stove,
which in 1914 was $7.25 per ton. in
1919 is $11.55 per ton. showing an in
crease Of about the same per cent.
Pea, which in 1914 sold at $3.50 per
ton, now sells at 1856. showing an in
crease of almost Is per cent Egg.
which in 1914 sold at $500 per ton.
now sells at $11.15 per ton. an In
crease of so per cent.
I'm 1914 it was possible~to engage
the. services of janitOrs at from ~ 10
$40 per. week: today 1t is necessary to
pay $1S to SIS per week. Considering
the cost of labor and material, one
can readily see that the cost of re-
pairs has doubled. Practically the
only thing in regard to apartments
that has not risen in price IS the
brokers' commission for leasing ana
management, which Is today the same
as it was in 1914"
Mr.. Benkert pointed out that CLOTH
in dyo
cent; household goods from 100 to 2o0
per cent; foods from 60 to 200 per
cent, etc.
He said the question arises whether
the renting of real estate, especially
dwellings. has been paying a fair re-
turn on the investment, to the owner
of the fee in past years. He said:
'1n 1914 dwelling house costing
$4,000 rented for SIC per month,
$4,000 house rented for $22, a $1,000
house for S2S, $4,000 house for 1913,
a 81, 900 house for $3S, $1,000 mouse
for s45. an $4,000 house rented 1or soo
and $4,000 house rented for about
Fair Rental Return.
'In estimating fair rental return
on investments the question is, on
what period of time should the esti-
ndLc Uc DdSeo: LII my
should be for ten-year period
at is generally conceded that the
owner of real estate is entitled to net
6 per cent on his investment. and IN
order to net this amount the tenant
must pay, as rent. some adoltionai
charges.
"In a ten-year period there Will, OF
necessity, be periods Of time when the
house will be without a tenant; va
cancies will occur. This shows loss
of income to the owner. which, IN
my judgment, is equivalent to l per
cent.
"a house either occupied or idle
needs constant repairs. Naturally. in
the first few years Of rs existence the
item of repairs Is comparatively
small, but paint does not last forever.
and woodwork will rot and must be
replaced. In our experience 1t is fair
to charge this account with per cent
of the value of the property.
"A house must be insured against
loss by fire. A proper amount to
charge for this item would be lilo per
cent. The investor. no matter wheth-
err he looks after his property him
self or whether he employs the serv-
ices Of a broker Figuring, Of course