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…
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?
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.
you should raise 75.00 if they are good tenants. good luck
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.
Wow, those rents seem pretty low. Have any other 2 BR’s you’re looking to rent out?
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.
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.
Stick it to them for as much as the market will bear.
Capitalism first!
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.
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.