Increase or not?
I’d like to ask other lanlords in the PS about their “rent increase polisies”. Here is the cituation: we have tennants in our brownstone, their lease is up in two months, they are paying market price for the app. and good tenants, we would like them to stay. Do you guys advise to increase rents…
I’d like to ask other lanlords in the PS about their “rent increase polisies”. Here is the cituation: we have tennants in our brownstone, their lease is up in two months, they are paying market price for the app. and good tenants, we would like them to stay. Do you guys advise to increase rents every year for couple of % just as a metter of principal (all the commercial landlords do it)or not to increase it at all sometimes? Our expences (taxes, heating,etc.)rise every year does it mean it’s a good practice to raise rent every year as well? What most small landlords do?
I strike a balance between keeping the rent under market but not so far under that I resent having them live there. It is a very nice, well maintained, well located apartment that I rent a bit below market to start so I have a choice of tenants. I make a commitment that if they work out I will not raise them the second year. After that, it depends on the market but I keep it further and further below market the longer they stay. So they get rewarded for not longevity and I trade off additional rent for not having the hassle of re-renting. The amount has nothing to do with my expenses (either high or low), it is market driven.
Don’t agree with raising rent each year automatically. My tenants are excellent. I try and keep it a bit below market. I’ll likely raise a bit when next lease is up after keeping it the same for two. Agree, value of good tenants is . . . well a lot.
what’s the point of raising rent on “principle” ??
Question is do you really think you could find equal caliber tenant at the higher rent you want to charge? Don’t need an increase every year….and sometimes market rents decrease.
If they moved, and you loose a month’s rent getting a new tenant in there….how long to recoop that money?
I just renewed my tenant’s lease for the second time, keeping the rent the same. However, when i renewed it the first time I cut their rent $50 because they were such good tenants and always pay on time. They are about $100-200 under market. Which equates to about 1 months rent and the added expenses to rent it out again.
You have good tenants and they are paying market rent…….. Don’t rock the boat!
Consider this:
– Replacing a tenant can be expensive: repainting, listing, possibly broker fee, vacancy etc. It will cost you at least one month’s rent.
– If you ever had a bad tenant, you know that a good tenant is “priceless”.
– Does raising rents make tenants want to move? not necessarily, but for sure will make them thinking about it.
Like Putnamdenizen i prefer to adjust rents between tenancies (or if the tenants ask for upgrades/improvements.)
I think it should depend on your expenses. I’m both a landlord (I own a condo in Los Angeles), and a tenant here.
If your expenses have not changed and you feel that you are not going to see huge increases in repairs, then don’t raise the rent. You’ll impress your tenants.
when i was a tenant many moons ago the landlady would raise me every year about $50 or so… She wasnt very good about repairs to my apartment and eventually she had worn me to the point where i decided to buy a house… If you have good tenants which are a rarity these days then id be happy to increase them every few years as long as expenses arent going up exponentially