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January 9, 2008
fair rent increase
I own a three family brownstone in clinton hill / bed-stuy. I have two two bedroom apartments that i have been renting to the same two tenants for over 4 years each. they currently pay $1280 and $1300 for their apartments and I have never raised their rent. I would like to raise it now but want to be fair and legal, does anyone what the legal percentage is that it can be raised every year? I'm thinking to raise each of their rents by $75 - $100 a month. comments? advice?
Comments
call dhcr or the rent guidelines board.
they might be on the internet.
Posted by: Ysabelle at January 9, 2008 2:31 PM
call dhcr or the rent guidelines board.
they might be on the internet.
Posted by: Ysabelle at January 9, 2008 2:31 PM
Technically if the apartments are not regulated, you can negotiate the price with the tenant.
Posted by: Ysabelle at January 9, 2008 2:33 PM
Unless they are subject to some sort of regulation like rent stabilization, which it doesn't sound like they are, I believe that you can just raise it anyway you like. I assume they are renting on a month-to-month basis, i.e. without a specific lease. Check the listings at real estate offices or on craigslist to find out what comparable units are going for, then base your decision on that.
Posted by: guest at January 9, 2008 2:38 PM
It's less than 10%. Sounds fair to me.
Posted by: guest at January 9, 2008 2:39 PM
Great. Thanks for all the input.
Posted by: sdweihe at January 9, 2008 2:57 PM
Can I just ask why you want to raise the rents? For people who have been in the same place for that many years, a rent increase, even somewhat slight, is just what you need to edge you out into another place. So if they are good tenants and you don't want them to move, and you don't have legitimate reasons for raising the rent (like increased heat costs), I wouldn't do it. But that's just my two cents.
Posted by: rjlovie at January 9, 2008 2:57 PM
How dare you evil landlord. Contemplateing trying to make an extra buck or two on the backs of your tenants. Why should you profit from your investment while some poor schlub has to actually pay to live someplace?
You should be subsidiziing their lifestyle as much as possible - pay no attention to market rents or what you are actually entitled to.
Posted by: guest at January 9, 2008 3:14 PM
3:14pm - I wasn't suggesting that the landlord subsidize their tenants lifestyles. I was just pointing out that for a lot of smaller-time landlords, keeping good tenants is more valuable than the increase in rent they would recieve. I was just pointing out a risk involved... if her tenants decide to move, she'd have to find new tenants, and create a hassle for herself. Some people wouldn't want to have to deal with that, just to get $1200 more a year on rent rolls. By all means, ask for whatever rents you wish.
Posted by: rjlovie at January 9, 2008 4:22 PM
There are no regulations regarding two family houses. You can raise the rent as much as you want. As a guideline, we go by how much the rent stabilization board increased rents to determine our rental increases. In 2007 it was 3.5% for a one year lease and 5.75% for a 2 year lease.
I'm in agreement with some of the other posters. If they are good tenants, and they pay on time, try to keep their increases lower. We had a good tenant who passed away, but we never raised his rent because when we went away on vacation, he would take in the mail, and keep an eye on the house. Unless you really need a rent increase to make ends meet, I would go with smaller percentages.
Posted by: guest at January 9, 2008 5:51 PM
Is the rent right now close to market rate for your area? If it is and you like your tenants, I wouldn't take the risk. They may consider moving and you could be out a month of rent interviewing replacements. You may not like your new tenants for some reason too.
Posted by: Rick at January 9, 2008 7:57 PM
I recently was in a similar situation. After not asking for a rent increase in 8 years because I appreciated my absolutely fantastic tenants, the decision to raise the rents was made out of necessity not a desire to make money. All costs (i.e., heating, taxes, insurance, water, electric, exterminator, etc.) have increased greatly. For many years I was, and to some extent still am, subsidizing my tenants even after a recent rent increase. Not everyone is greedy. If the OP was greedy he/she would not have waited four years to increase the rents and would be looking to raise them much more than $75 and $100. If the tenants decided to move because of the increase it would also cost them a lot of money, such as: a possible increase in rent anyway in addition to likely yearly increases thereafter, moving expenses, possible redecorating expenses, inconvenience (priceless).
OP - If you explain to your tenants that you do appreciate them and that you need to increase the rent due to increasing expenses directly related to the house, I am sure they will understand as long as you raising not more than market value. Most landlords ask for an increase on a yearly basis, so I would imagine that most tenants would appreciate not getting an increase in 4 years. Good luck.
Posted by: guest at January 9, 2008 9:18 PM
That's reasonable. It is a good idea to give tenants little increases as your costs go up; the worst situation is not being able to provide good service to them because you can't afford it from the rents they pay. Also, it is good for them to know that rents do go up. Energy is up - electricity, heating oil, gas, etc. and water charges have gone up too.
Posted by: donatella at January 10, 2008 2:56 PM
Stick it to them for as much as the market will bear.
Capitalism first!
Posted by: guest at January 10, 2008 3:20 PM
That sounds completely reasonable. 4 years with no increase is a long time- and it seems like a very reasonable increase.
I agree though that you should discuss this increase with them- and give them a couple of months notice- and be clear that your costs are going up and you need to pass that along somewhat.
Posted by: guest at January 10, 2008 3:23 PM
From a practical point of view, here's how we do it, it's worked well for us for 10 years. Do a survey of the broker sites and craigslist for apartments similar to yours, ie 1 br, 1 bath, etc..... Then, throw out the low price and the high price and take an average. That's the way to start. We've always been close with that approach. You are due an increase after four years, I know costs have really gone up.
Posted by: guest at January 10, 2008 3:54 PM
Wow, those rents seem pretty low. Have any other 2 BR's you're looking to rent out?
Posted by: guest at January 10, 2008 4:13 PM
Those rents are riduclasly low. While I agree that its important to keep good tenants, I dont agree that good tenants are hard to come by. If you have a good broker and interview them carefully, there are plenty of good tenants who would be happy to more much more than you are charging.
Posted by: guest at January 10, 2008 4:47 PM
you should raise 75.00 if they are good tenants. good luck
Posted by: guest at January 22, 2008 1:45 PM
You are trying to increase the rent by >7.5%. You should have raised it 2 to 3% each year. Such a large increase will hurt the tenant and might push him/her to look elsewhere.
Moving expenses are low compared to $1200/yr increase. A good tenant is hard to get and keep.
Posted by: guest at June 4, 2008 7:30 PM
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