Rent increase dilemma - Great tenants - Landlord Forum thread 317762

Rent increase dilemma - Great tenants by Anonymous (California) on April 21, 2014 @16:08

My current tenants are great - they pay on time, takes good care of my house, and are not cranky at all.

Naturally, I want to keep them as long as they want to stay put.

As their current lease is coming to an end in couple of months, I started doing some market research as to how much similar properties are asking for rent. I realized that similar homes are priced at $100-200 higher in my zip code.

So, the dilemma is, do I push for rent increase and risk that my great tenants get offended and find another place with their 800 credit scores and ton of income? Or, I just don't bring up renewal/rent increase (not to poke the bear) and just let it go month-to-month automatically at the same rent?

Any insights from fellow experienced landlords appreciated.

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Re: Rent increase dilemma - Great tenants by Bill on April 21, 2014 @16:23	[ Reply ]

Increase the rent by a small amount like $25. Next year, do the same until you get up to market rate. If you increase it all at once the tenants will start looking around. Quality tenants have choices. There is no way you can make money by running these tenants off and trying to charge more to the next ones.

Re: Rent increase dilemma - Great tenants

Re: Rent increase dilemma - Great tenants by Anonymous on April 21, 2014 @16:47	[ Reply ]

Thanks Bill. I agree, I will end up losing much more if these tenants leave and I have to find new ones. I like the idea of small increase that does not pinch them.

Re: Rent increase dilemma - Great tenants by Anonymous on April 21, 2014 @18:36	[ Reply ]

My LPA lease stipulates that the tenant provide a 60 day notice to the LL of their intentions at the end of the lease. You need to point this stipulation out to them, or they will be in breach of lease if your lease says the same as mine. I decided not to raise the rent on another 12 month lease. Your tenants could easily buy a house.

Re: Rent increase dilemma - Great tenants by Ron (Texas) on April 21, 2014 @19:33	[ Reply ]

I recently raised my rents $75.00 because of increased property taxes. My tenant cheerfully accepted the increase, 2 even said they were expecting as much if not more. If you know you are below market, you can almost bet the tenant also has this information.

Re: Rent increase dilemma - Great tenants

Re: Rent increase dilemma - Great tenants by Anonymous on April 22, 2014 @06:57	[ Reply ]

I would NEVER raise the rents on tenants like that. In fact, I just went though all my leases and LOWERED my rent $25 on every tenant who has been there more than 2 years, who pays on time and is "easy." I would rather have these great tenants than another $1000 a year any day.

Re: Rent increase dilemma - Great tenants

Re: Rent increase dilemma - Great tenants by CA/OR on April 22, 2014 @23:28	[ Reply ]

Even with great tenants, I think it is a good idea to raise the rent a tidbit each year (the amount can be above/below/within the market and dependent of wx you want to send them a message) because it creates an expectation & lessens the shock. A $10-$50 amount is probably easy to shake off - and even if this is below your fair market, you may be making out in the long run by having great tenants.

Re: Rent increase dilemma - Great tenants by anonymous on April 26, 2014 @23:12	[ Reply ]

Think percentages in terms of rent increases. Around 3% annually. Also consider how many years they have been there without a raise, how much your insurance and taxes have gone up, any utilities you're paying more for? Don't be afraid. Each year same time rent is adjusted (raised).