Lease Renewal/Rent Question
We’ve had a great tenant for 2 years and the tenant’s lease is up again in a few months. We are debating whether we should raise the rent – I think it’s a reasonable rent ($1250 for a $700sf top floor 1.5 BR in Bay Ridge) and don’t want to risk losing him, however, water…
We’ve had a great tenant for 2 years and the tenant’s lease is up again in a few months. We are debating whether we should raise the rent – I think it’s a reasonable rent ($1250 for a $700sf top floor 1.5 BR in Bay Ridge) and don’t want to risk losing him, however, water and property bills have increased. Also, how often do you repaint an apartment if the same tenant is there? Do you wait until a turnover or is it every 3 yrs? Just looking for opinions, experiences, thanks!
Thanks again – I agree that a good tenant is very valuable and probably not worth the minimal increase in rent so likely we will keep rent the same for as long as we can.
We just renewed with our tenants for year three without a rent increase. I’m sure the unit is underpriced for the market, but they are fantastic tenants and we have an excellent relationship with them. The fact that they feel like they have a good thing they should hang onto is worth way more than $600 or $1200 a year to us.
Finding a new good tenant could be costly (vacancy, repainting, fees, dead beats etc).
I very rarely raised rent on a good tenant unless they ask for improvements or for repainting.
I’m not too familiar with Bay Ridge but $1250 + all utilities for 1.5 rooms can’t be too far from market price.
If current tenants move out and you have to paint before finding a new tenant, you would have to ask around $1400 to make the same money you are making now.
IMHO, simply not worth the risk.
Good luck.
I don’t know your market but I price my rental under market to start to get a larger number of potential tenants to choose from.
If they work out, then the longer they stay, the more under market the rent is. I do raise it – never the second year – but they essentially get a greater discount the longer they stay.
In spite of rising costs – heat, taxes, insurance, repairs, etc – not having it vacant, not having to show it and having decent tenants is worth money.
We always try to avoid increasing the rent if we have a great tenant. In the same sense that you might be thinking, “It’s just $50 more per month, they won’t mind.” It’s also only $50 more in your pocket per month, which isn’t much, and great tenants are priceless.
Good luck.
OP here The tenant does pay for their own heat/gas so the rent is kept a bit lower to factor that in. But I do think a $50 increase at least is reasonable. I guess I’m just afraid of scaring him off, I know good tenants are hard to come by. Thanks for the advice!
I wouldn’t worry about repainting at this point. If under-market — raise at least $50. but more like $75. Not that large %…and if get $75 more – that is $900 more per year to pay increased expenses.
Whoa. I am in the process of hunting down a 1.5 / 2br top floor in Bay Ridge for July 15th or August 1st, and I can tell you from my research that $1250 is underpriced (unless the place is really tiny/outdated). I am actually interested in learning more about your apartment if you don’t mind. cf80q at yahoo dot com. Thanks!