Hello and welcome to the dirty business of making money. Every year the whole country is in an uproar over price increases in every sector of the market, long have they forgotten that they have been enjoying a wage/salary increase since the previous year before most industries up their price! The end users always say that business is taking advantage of them and should reduce their profits and so on.
Here is a brief overview of the reasons why we need to increase rents. Just to make my point in as delicate a manner as I can, let me list the factors that make the idea that business takes more than its fair share is fundamentally flawed sentiment to the extent that there would be no improvement or even maintenance in any person’s quality of living.
- Salary increases demanded by workers
- Cost of services incl. security
- Cost of Insurance
- Cost of maintenance
- Cost of new development
- Depreciation of assets
These six factors make it impossible to maintain pricing year on year. Can you imagine saying to your staff that there will be no increase in their salary this year? I think the world economy would come to a grinding halt, especially in 3rd world countries such as ours. Most people when they get their annual increase notification from the pension fund say nothing, medical aid say nothing. Boy oh boy don’t you dare increase his rent, bond or other utility that is unfair!
The time lag between the salaried person and his annual increases is about 10 months to their advantage. I am in no way saying that some increases are correctly applied or supported in general. What I am saying is if you have had 7% inflation and you got a 10% increase on your salary and now your rent is increased between 7-10% year on year. Please consider your land lord, his cost of living went up too and so did all his staff or agents fees. Don’t begrudge him a new an equitable income versus his risk letting his property to you. Keep in mind you can move yourself or your goods anytime to suite yourself. The landlord cannot move his premises to a new location and he still pays the bond and all the staff.
Just imagine you are the employee of the storage company and your boss said no increase this year, you would be devastated. As you were expecting at least inflation +1% increase in your salary.
Share the money, share the love. Anthony.