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Old 09-16-2019, 12:21 PM
 
638 posts, read 965,087 times
Reputation: 465

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I am in a similar situation with a couple of my tenants. Unlike yourself, I am not hesitating to raise rent since my expenses have been rising steady the past few years but I didn't raise my rent to these aforementioned tenants. Not doing $100 but I am doing between $50-$75. I already prepared my tenants since I am not raising rents until the beginning of the new year. So far no push back but the new year hasn't started yet. Only you can make a business decision on your business.
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Old 09-16-2019, 01:25 PM
 
Location: El paso,tx
2,397 posts, read 903,695 times
Reputation: 3858
Calculate what your losses would be if it went vacant for a month, and see if you can increase rent amount enough that if they terminate, and you lose a months rent, you would still come out ahead. Unless rent is 3k a month, i think 100. In one shot is too much. I would do 50.00 max. Then do another increase in a yr.
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Old 09-16-2019, 01:50 PM
 
Location: Florida -
8,895 posts, read 11,068,700 times
Reputation: 17237
Why not run your initial scenario past your tenant and see what type response you get? - Tell them how much you appreciate them as renters, but, explain that you've held their rate for 4-years, while other area rates have increased ... along with your expenses (a specific $ amount would be useful).

Ask them what they feel would be a reasonable increase ... and would still keep them happy as tenants. IOW, treat your relationship with them as a partnership and get their input. People know that prices are going up and they should not be surprised. Remember, losing them as a tenant for even one-month, could cost you much more than you might gain on a nominal rent increase.
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Old 09-16-2019, 02:22 PM
 
638 posts, read 965,087 times
Reputation: 465
^^^That's the fantasy world. Not for nothing but nobody wants their rents raised no matter the relationship with the tenants. In my case, I just told them what I was going to do. Either they deal with it or not. As much as I like these tenants, I am raising rent. It is a total business decision. They are not your partners in this business.
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Old 09-16-2019, 04:25 PM
 
Location: Tijuana Exurbs
4,044 posts, read 10,539,337 times
Reputation: 4822
How far below market are you?

Without knowing the actual market gap and it's proportion as a share of the rent, we reasonably can't offer a fixed suggested increase.

Whatever increase you choose, I would recommend continuing to stay below the market. The reason being that a good tenant who pays on time, takes care of the property and does not move creating a gap month has real value to you.

It's hard to put a dollar value on the absence of hassle, but you need to do that.
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Old 09-16-2019, 11:40 PM
 
282 posts, read 59,570 times
Reputation: 358
In the same boat as you with mostly good tenants with below market rents on a number of them. Going to creep them up a bit more. 3 to 4% increase is reasonable. Take a look rentometer.com and call on some for rent signs to see market rents too.
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Old 09-17-2019, 04:15 AM
 
993 posts, read 657,661 times
Reputation: 1593
The most I would do is 50.00, its better to have a tenant who cares about your property than having to relist, go thru applications and pray you get another good tenant. And if you don't? That increase will not be worth it. A new tenant could do a lot of damage.
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Old 09-17-2019, 04:30 AM
 
Location: Washington State
19,356 posts, read 10,019,106 times
Reputation: 16500
Quote:
Originally Posted by possibleyou View Post
I plan on increasing my tenants rent. How much do you think is a reasonable amount to increase at lease renewal but without scaring the tenant away? My tenant has been there for 4 years and their rent is below market. They have been paying their rent on time and maintain the house very well as if it were their own. Although the area isn't the best, the house has been completely updated before they moved in. They have central air, high-end stainless steel appliances, washer and dryer (which is a huge bonus), hardwood flooring, a nice size fully fenced in yard, an updated bath etc. In addition, I always quickly respond when they ask for repairs, and I always make sure repairs are completed promptly. The property taxes have went up substantially which is the reason why I would like to raise their rent. I was planning on increasing their monthly rent by $100, however I felt like this is a bit much considering they seem to be outgrowing the house as their family continues to grow, and I do not want to risk losing them as tenants any time soon. I don't want them to look elsewhere as it will just be more of a hassle for me to freshly repaint the house again and find a new tenant etc. After loking at the current available rentals on Zillow it seems that the other rentals are all basic and are not as nicely updated as my rental property and those rents are all priced higher. My question is, how much should I raise their rent? Should I raise them $50 or $75? I do not think this is considered to be a huge increase and I do not want it to be. I want to mention I usually never raise any of my tenants rent therefore I am a bit hesistant over the fact that they may vacate over this.. please provide all your opinions and suggestions as to what I should do. Thanks

Like you, I try to do all I can to keep a good renter so I would go low end for a good renter. Still, if it's too below market, you will need to raise the rent or you are just gifting them. We slowly and carefully raise the rents on our houses unless we have a bad renter and for those, we raise it up to market rate or higher until they leave.
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Old 09-17-2019, 08:57 AM
 
Location: Fort Lauderdale, Florida
9,579 posts, read 8,562,436 times
Reputation: 20987
I would not raise the rent any more than 5%.

However make sure you follow the proper laws in your state. Some states have a cap on this.
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Old 09-17-2019, 10:25 AM
 
4,090 posts, read 3,313,382 times
Reputation: 13525
Put yourself in their shoes. If you raise their rent, they may consider moving. What can they find for comparable pricing, not to mention the expense and aggravation of moving. If you are below market, they may not be able to find anything comparable for close to what you want to raise it to.
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