Raising Low, Low Rent
We bought a 2 family with a month to month non-stabilized tenant. Her rent is extremely low and we wanted to raise it to help pay our mortgage (which btw is a lot higher than the previous landlord’s). From talking to people in the neighborhood, we could get at least 400 more a month. How…
We bought a 2 family with a month to month non-stabilized tenant. Her rent is extremely low and we wanted to raise it to help pay our mortgage (which btw is a lot higher than the previous landlord’s). From talking to people in the neighborhood, we could get at least 400 more a month. How can I raise it without being a jerk. 150 more for six months then another 150 more after that? Before you judge, she has a good job and is not some poor old lady on a fixed income.
By ou812 on September 30, 2010 1:27 PM
I hope you are considering the fact that your tenant could move. Anytime a tenant moves, you will want to cosmetically fix the apartment to maximize your new rental. After that, it’s rare that anyone will sign a lease and move in immediatley. Everyone nees time to coordiante. Factor in the loss of income for two months, cost of paint and anything else that requires correction, and divide that by your monthly increase. That’s how long it will take to recoup that increase should you lose a good tenenat. We are not talking a month or two here. Don’t get to greedy.
this is hilarious. JMT… it’s your house, if you raise the rent to market, there are tons of equally nice people dying to live in your neighborhood. Why are you treating this tenant like you have some emotional attachment to them… i can guarantee you that any half decent realtor will find you a new tenant in 2 – 4 weeks, notoriously slow winter months or not, and there is no reason why you can’t show the apartment before the tenant moves out.
Thanks for the good advice everyone. As far as cillmylandlord_again I guess your name says it all. I would not talk to a neighbor she would know. And I hardly think it is rude to find out what rent is in my neighborhood. Geez! I will probably stick to a 10% increase next year and another 10% the year after, that seems fair and reasonable considering how low it is.
Which nabe and how much? Maybe I’ll take it.
I hope you are considering the fact that your tenant could move. Anytime a tenant moves, you will want to cosmetically fix the apartment to maximize your new rental. After that, it’s rare that anyone will sign a lease and move in immediatley. Everyone nees time to coordiante. Factor in the loss of income for two months, cost of paint and anything else that requires correction, and divide that by your monthly increase. That’s how long it will take to recoup that increase should you lose a good tenenat. We are not talking a month or two here. Don’t get to greedy.
One other consideration is that if your tenant leaves now, it will be much harder to rent your space than if they leave in the spring. The late fall and winter months are notoriously slow for finding tenants. Maybe offer a lease for 6 months with the understanding that the rent will go to market rate at that time.
I agree…and you shouldn’t be talking to your neighbors about her rent. She probably knows those neighbors better than you! How rude.
It is a situation that can be fraught with tension if communication isn’t clear. It is also true that both parties need to be comfortable with the situation. We have had a great tenant for 11 years- who had been previously living in the house and the neighborhood for 30 years before us. when we moved in he paid about half of market rent- now it’s about 25% under as we have raised it sproadically over time. I’d like it to be a little bit more- but he is an excellent tenant and friend- He feeds the cat- once when we went out of town he hired a friend to build a brick wall in the front-
The tenant might be fine with a slightly higher rent- and will certainly be happy to not have a sense of uncertainty about the future. Figure out what you need to have happen and then have a talk with the tenant- if it’s not possible for you to go lower than a certain rent – it might be time for her to move- however- she might be comfortable paying more –
if you share your house with someone — i.e., you and renter both live in building — you want the relationship to be as good as possible. After all, you want a happy home. You can’t have a happy home if the tenant hates you for raising the rent.
You also can’t have a happy home if you resent your tenant because they don’t “pay their fare share.”
If you value your tenant as a quiet, considerate neighbor, I wouldn’t raise the rent by more than 10% a year.
Look through these forum archives for people posting HORROR stories about bad tenants and bad tenant relationships. If you have a considerate tenant, be a considerate landlord.
What is the condition of the rental apartment? If she’s lived there a long time, I doubt the previous owner had renovated the place recently. Yes, market rate for a newly-renovated apartment with new appliances, dishwasher, etc., might be $400 per month higher than what your tenant is currently paying, but as-is probably not. If you want to go up on the rent, be prepared to go up on the services you provide as well.