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Old 02-01-2014, 02:51 PM
 
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I'm interested in how LLs sets rent for a new tenants (of if there is any generality at all):
Usually a tenant of an apartment gets rent increase every year or so, let's say from 1st year to nth year are:
$1000, $1030, $1075... $1300. Now when he moves out, where does the rent for the new tenant of that apartment start with? Does it continue with the $1300 or slight increase as if it's still the previous tenant, or does the rent start with lower than that? What is the common practice/convention?
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Old 02-01-2014, 02:56 PM
 
Location: Martinsville, NJ
6,162 posts, read 11,742,882 times
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Quote:
Originally Posted by ssww View Post
I'm interested in how LLs sets rent for a new tenants (of if there is any generality at all):
Usually a tenant of an apartment gets rent increase every year or so, let's say from 1st year to nth year are:
$1000, $1030, $1075... $1300. Now when he moves out, where does the rent for the new tenant of that apartment start with? Does it continue with the $1300 or slight increase as if it's still the previous tenant, or does the rent start with lower than that? What is the common practice/convention?
Most landlords would evaluate the market, find out the going rate for a property exactly like the one he wants to rent, then adjust if necessary for his own situation & circumstances. The rent paid by the previous tenant should have little to do with it.
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Old 02-01-2014, 02:57 PM
 
Location: southern california
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the rent is based on the market same as house sales.
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Old 02-01-2014, 03:12 PM
 
Location: Riverside Ca
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I usually go by the local market demands. I try and stay a bit below going rate. On one rental I'm asking going rate but that's because I gutted and completely remodeled it. Literally everything is brand new inside.
What the previous tenant paid does in no way mean the new tenant. Is gonna pay the same price. If I get a great tenant good BG income etc and I like them I can easily negotiate the rent. I figure if it takes me another month to hang on for that extra hundred I'm losing more than I'm gaining.
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Old 02-01-2014, 06:49 PM
 
Location: SoCal
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As others have said, we evaluate the market, determine what we think our unit is worth based on amenities, size, location, etc., and decide on our rent. Previous tenant's rent is irrelevant. Just like selling a house - does not matter what you paid for it, just matters what the market value is.
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Old 02-01-2014, 07:37 PM
 
Location: Silicon Valley
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Every time I got a new vacant apt, I looked at market rents. I advertised for at least $100 more per month as a starting figure.

The tenants who were staying year to year, payed less when they got a rent increase than what I would charge a new tenant. But, if they moved out, all bets were off. I'd get as much as possible out of a new tenant.
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Old 02-01-2014, 08:31 PM
 
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Thanks. You all seem to have a common point, which is different from what someone told me (which I was skeptical to begin with, thus coming here to check). That person told me that when a tenant moves out, the LL lowers the rent back for the incoming new tenant, and that that practice motivates some people to switch apartment frequently, moving back and forth (i.e. sometimes moving back to where they used to live), in order to get lower rent. I was skeptical because that would imply the LL was practically encouraging the tenant to move.
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Old 02-01-2014, 08:38 PM
 
Location: Silicon Valley
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Quote:
Originally Posted by ssww View Post
Thanks. You all seem to have a common point, which is different from what someone told me (which I was skeptical to begin with, thus coming here to check). That person told me that when a tenant moves out, the LL lowers the rent back for the incoming new tenant, and that that practice motivates some people to switch apartment frequently, moving back and forth (i.e. sometimes moving back to where they used to live), in order to get lower rent. I was skeptical because that would imply the LL was practically encouraging the tenant to move.
No, moving tenants around is costly. Whenever a tenant wants to move to another apartment, their old apt needs to be painted, etc., and there is rent lost until it is ready to go. I used to let tenants move to another unit if they wanted a bigger one, or one on the quieter side of the building, etc., but they would have to pay the new higher rent for the unit they wanted. I didnt' give them a break on the rent for the new unit. Once they were in the new unit, though, their rent didn't go up much per year.

Then, though, the owner would lose a little bit of money on the old unit until it was ready, but then we would advertise it at the new rent.

The only time this was different, was during the rent/housing crash, when rents went way lower. I had tenants negotiating lower rents because of the market crash. I did reduce some rents during that time, but then they were eventually raised again.

Not sure if that answered any questions regarding what your friend told you. Hope so.
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Old 02-01-2014, 08:43 PM
 
26,798 posts, read 41,507,636 times
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Quote:
Originally Posted by ssww View Post
I'm interested in how LLs sets rent for a new tenants (of if there is any generality at all):
Usually a tenant of an apartment gets rent increase every year or so, let's say from 1st year to nth year are:
$1000, $1030, $1075... $1300. Now when he moves out, where does the rent for the new tenant of that apartment start with? Does it continue with the $1300 or slight increase as if it's still the previous tenant, or does the rent start with lower than that? What is the common practice/convention?
We usually list it for the same amount as the last tenant paid but also a lowered it to list it depending on the condition of the property.

In another case where a tenant moved out yesterday we listed it $300 higher and the phone kept on ringing today.

The owners had rented it out for way below market price to a pastor who is a disgrace and I send an email today that a man of G_D should be ashamed of leaving a property he could rent so cheap by the kindness of the owners because they belonged to his church, are treated like this.

We recently raised the rent when we took over by $50 and now raised it by $300 to match fair rental prices and we will rent it fast once we clean up the mess left by a so called pastor!

In my email today I stated we will go to small claims court, maybe file for criminal mischief and will post pictures on the church Facebook website so everyone will be aware how church money is spend since the church paid the rent and how the lived a pig style life as we noticed when we went there for an inspection and re-inspected and now upon move out.
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Old 02-01-2014, 08:43 PM
 
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They town city could also have limits on yearly increases - I've seen it as low as 2% and as high as 2.5% where our properties are.
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