Have you raised rent in last 3 years? (apartments, lease, tenant)
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
With the economy going as it is going, has the rent on your property gone up? Have you been raising every year?
I have one place rented out to same family since 2015. Initial contract was 1 year, then we extended for 2 years and now we renewed it for one more year. Every time I thought of raising rent but they don't bother us and the income covers the housing expense. So we didn't bother. But looking at current rent price vs. 2015 rent price, I wonder if I am making a mistake. Am I the last landlord who has not raised rent yet?
"With the economy going as it is going..." What do you mean by this exactly? The economy is actually really good right now. Inflation is still very low, which is one of a landlord's best arguments to raise rent, but unemployment is very low and the economy is doing very well overall. We are no longer in a time of 'ouch, the economy is so bad...' Not being able to find qualified tenants for rentals should not be a problem at all.
Your case sounds good and even if it were in your lease or inflation was high, not raising the rent still may be worth it to you to keep good tenants.
It is probably worth your time to find a few comparable units in the area and see how their rent compares. If it's reasonably close, I wouldn't worry about it. If you are missing out on $1,000 per month in increased rent, now you've got something to think about.
If rents are going up, the best way to deal with that is to give a small raise every year. That's much better than never raising rent for years until you realize that the rent is $500 below market and trying to get it raised closer to market with such a gap to overcome.
Sadly, you cannot expect any gratitude from your tenants for leaving rents low. All you will get is anger and entitlement when you try to get rents closer to market rate.
Yes. We raise rent according to the market. BUT... if I have a really good tenant, who doesn't bother me or the neighbors, and pays his rent on time, I "forget" to raise their rent.
I actually decreased the rent on a tenant at renewal recently, because they're great tenants, and I had had to decrease the rent on a similar unit in the same building to get a good tenant, so I felt I should drop theirs too.
The owner I worked for when I was an apartment manager and I - believed that raising the rent every year was good policy. Even if it was just a nominal amount like $35. It gets the tenant used to the idea that their rent will be raised every year and to expect it.
I agree that no tenant will ever be happy about a rent increase. They will always think that they should receive a break just because they have been in your property for a long time.
I had a really upset tenant once giving me a hard time about a rent increase. Her rent was still far below market. I sat down with her and told her that I could easily rent her place out for hundreds of dollars more per month if she left - so that there was nothing in it for the owner to keep her rent low, simply because she had been a tenant for a long time.
She was a law student who had graduated and become a lawyer by this point - she had been a tenant from the time she started law school. So, she was not a stupid person - just someone who didn't understand the economics of rentals for profit.
Before I ever raised rent on any tenant, I did my research on Craigslist, etc. So, I knew what their options would be when they started looking for other apartments. Because, this is what a tenant will do when you give them a notice to raise the rent - they will get on Craigslist, etc., to see what they can get for the same amount of money.
So, if you do your own research and see that they can't find anything comparable for less than your new raised rent amount, then it's easy to deal with their resistance. Just say, like I did - "I completely understand if you want to move. Just give me 30 days notice, please, and I'll be happy to give you a good recommendation as long as you leave the place clean and undamaged beyond normal wear and tear."
This will put them into shock mode, because they will assume you will want to keep them simply because they have been a good tenant for X amount of time. Regardless if keeping them means you will lose money on the higher rents that are what the market is asking for.
My tenants would complain, but normally would stay. Because, they also saw that they couldn't get a better deal anywhere else.
So, you raise the rents just enough so it's still a good deal for them to stay. But, there is no need to lose money on a current tenant, when a new tenant would bring in significantly more.
I have raised two upon renewal -3% increases that coincided with some type of work on the property (one was a dadgum AC coil, the other a fence and added gate).
Two I’ve left alone - on their second renewal. I might bump them a little next year, but they’re less than 10% off market.
Three are short-term rentals in new build neighborhoods where I rent MTM to families building in that neighborhood, only when referred to me by one of the builder reps. These are aggressively priced (high) at about 115% of market but allow the family to be in “their” neighborhood, not change schools etc. and I’m really flexible and understanding about closing delays, etc. I’ll do pro-rated mid-month moves, have straight up cleaning fees in the rental agreements to make their transition easy and stuff like that.
My line is about 12% of market rate. If I drop below that (1.5x monthly rent) I’ll ratchet it up over 3-4 years, or a turn.
Truthfully, I’m in the process of getting ready to liquify everything but the short termers. I’m tired of the work and the game. Once the neighborhoods are built out, I’ll sell those and take my money out of the market for a bit.
... Am I the last landlord who has not raised rent yet?
My grandparents had a total of 28 rental houses. They began building these houses in 1940, and they finished constructing the last one in 1990. During that period of time, they never raised the rent on any tenant.
I bought my first rental property in 1985, I have owned five rental properties [2 Tri-plexes, a Four-plex, a Five-plex, and now a 14-unit building]. I have never raised the rent on any of my tenants.
I considered my grandparents to have been successful, and I have been modeling their behavior.
I go up every year. Better to do small increases than a big one after a few years. I always keep it below market on increases so they can't easily find a cheaper place.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
