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Best Way Increase the Monthly Rental payment?
by Marta P (California)
on September 15, 2017 @19:56
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Hello ya'll I we rented our home 5 years ago to a family of 4 and we have been very happy with them and all is good. But a year after we rented we noticed that we could have asked for more.
We are charging $3,800 per month which includes the yearly legal 5% increase for our area. That said, now the going rental price for homes similar to ours is around $5,000-$5,500
Like I wrote we do like our tenants and the check is always on time but we don't want to be loosing income either.
In two months their lease will come up and I would love to know what is the best way to let them know that we need to raise it to match the going rate. We are not greedy and will be happy even ask $4,500 instead of 5K. Any bright ideas from any of you?
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Re: Best Way Increase the Monthly Rental payment?
by Anonymous
on September 15, 2017 @22:07
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Since there are cities in California that have rent control, it would help greatly if you gave information whether or not you are in a rent control area?
Otherwise, California law applies to how the landlord is required to notify tenant of rent increase depending on how much the increase is.
Most likely, such an increase you propose may cause the tenant to vacate. You might wind up loosing more money due to make ready and setting vacant while finding a new tenant.
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Re: Best Way Increase the Monthly Rental payment?
by Garry (Iowa)
on September 16, 2017 @09:41
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Yes, you ARE greedy. You have scanned the internet, and seen similar homes rent for much more. But, have you actually gone INTO those homes to see how similar they REALLY are to yours? And are they all within, say, 2 square miles of your home, meaning in the same area as yours? It's unfortunate that you are in a rent-controlled area, but that's the way it is. Your "research" should have been done 5 years ago, and priced at the fair market rent THEN. Are you really asking this forum to try to come up with a way AROUND your state's laws? That's not what this forum is about.
I know you would like to raise your rent by 20-25%, but think about it. Could YOU absorb that much increase on the mortgage on YOUR home, without possibly deciding to move? Remember, a 5 year tenant in today's world is usually considered a LONG-TERM T. Where you may be losing money as far as current rental rates go, you have at least broke even, by not having any vacancies, and the costs associated with them. Just keep doing your 5% per year increases, and be thankful you have such GOOD tenants in your home.
I don't know your state's exact rent control laws, but I'm guessing you would have to ask your GOOD tenants to move, and once vacated, you could ask for your new $5,000 rent amount. The question is, could you find another GOOD tenant, within a short amount of time? Money is not always "made" by cash flow. Appreciation of the value of a place, and having good, long-term tenants (no vacancies) also factor in.
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Re: Best Way Increase the Monthly Rental payment?
by Kat (CA)
on September 17, 2017 @01:25
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Raise the rent the legally allowed amount.
In some locations, increases can be more if there are extenuating circumstances such as specific listed improvements or listed additional expenses. If any of these apply to your rental, you may be able to increase more than 5% but the increase is likely to be balanced by the increased cost of the improvement or other expense.
If you have a good tenant, don't fret about the increase you see in the general market.
When/if your current tenant moves, do a better job of checking comps and go on from there.
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Re: Best Way Increase the Monthly Rental payment?
by lamac66 (ga)
on September 18, 2017 @13:25
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Do comps. If you're area has the demand for quality housing at that rate, then by all means go for it if your comps are indeed justified.
Just have an idea if you have prospective tenents that can afford and willing to pay that much for rent.
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