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Old 09-17-2019, 12:54 PM
 
Location: Stuck on the East Coast, hoping to head West
3,837 posts, read 9,376,887 times
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I would consider acquisition costs (how much it would cost you to get another tenant) + vacancy + condition. I'm guessing after 4 years, you're going to have to do something to the property in order to re-rent it, even if it is just paint and deep cleaning.

I rented one place where the landlord raised the rent and then said I had the option of having the house repainted or getting a coupon for x amount of dollars off of one month's rent to be used whenever I wanted. I took the coupon and the rent increase didn't seem as bad.

If you have good tenants, I'd be really careful.
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Old 09-17-2019, 01:05 PM
 
Location: Dallas, TX and Las Vegas, NV
5,823 posts, read 4,589,444 times
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It matters NOT to tenants what your cost increases are. What they do is look and see what other similar houses cost to rent. So, check carefully to see what others are charging and set your new monthly rent $75 below.


I learned a long time ago to adjust rent annually. That way tenants are never shocked with a rent increase. Even if only $10 a month, you will have a lot less trouble doing increases.
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Old 09-17-2019, 03:33 PM
 
Location: SW Florida
11,024 posts, read 5,151,151 times
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The last place I was renting went up $50 every lease renewal. Have these tenants been paying the same rent for the last four years? I would do $50-$75 depending on your market. Like you said you don't want to scare them away but are they going to be able to find a rental as nice as the one you are describing for what they are paying now?
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Old 09-18-2019, 11:43 PM
 
100 posts, read 59,223 times
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Thank you everyone for all your input. Your posts have been truly appreciated, and I am certainly taking all of this helpful advice into consideration while I prepare a reasonable lease increase to my tenant.
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Old Today, 02:04 PM
 
18,962 posts, read 20,924,877 times
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I used to be like you. Didn’t raise rents and figured a good tenant is worth keeping at a lower rate. Then you realize that rents are passing you by and now you’re $3-500 below going rate. Which means you’re 3600/6000 yearly loss of revenue.
I’m raising my rates 7% next year.

If you’re that far below going rate...
Do a cost analysis of a comparable property in your area for rent. Check what the rental market is like. If it’s heated up raise the rent. What’s the difference? Raise it 75% of that difference or whatever you feel comfortable

On the above scenario you could find yourself way below going rate, you have a cap now you can only raise rent x amount. So it’s gonna take you years to catch up if you can even catch up.
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