I own a 4plex and have moved into one of the units, yes I receive 1/4 or the homeowner's exemption; I also receive another 1/4 for a family member living in another unit.

I'm trying to figure out if I should kick up the rents for the tenants to cover my rent, or if I should kick in a portion which I already do...actually it turns out to be a little more than $500. I calculated all building annual expenses, divided by three and all 3 tenants should have a substantial rent increase in order for me to live rent-free.

If I divide by 4, I should kick in $500+ (I already do this) a month and not increase rents... for now. Although, we just received our property assessments and rents will definitely be going up January 1, 2020.

My son is getting into real estate investing and getting into my head that I should be making a profit of so much per month, but I'm living in this place for basically $500 a month. I'm not getting rich on this investment...should I be making more money on this property or just be happy being in the "black" each month. Actually, I'm pretty happy, but a little more cash would be nice too!!

What are your thoughts?

Setting rents based on your costs sometimes works, but depending on other factors you could be either too low or too high.

I have saved rental property searches on Zillow and Trulia for the types of properties we own, so I get a daily listing of what it out there on the market as my competition. Based on those, I make adjustments for location and amenities as required and set my rents.

Rent the other units at market value. If that allows you to live there for free, great. If not you can't force it. Tenants won't pay above market rents just to help you.

Thank you for your comments. I've owned this property since 2005 and I just moved in here 2015 and I have been managing this property and another by myself since 2005.

For many years, I didn't increase rents for existing tenants--there were three total. After two moved out, I increased rents up to market value for the new tenants. I have one tenant that has been here for 14 years...In the last few years I have been increasing is rent $50/year (mainly because his brother moved in) and because their rent has been ridiculously low; I'm trying to get his rent up to market value.

Thank you for the education on trying to increase rents per market value, not expenses. I imagine rent increases should be evaluated by a combo of market value, expenses, and each tenant situation, right?

Ally M (NJ) Yes, I agree with you.

You need to do a "free" cost analysis to determine the following:

1) How much would it cost to fix up the unit if the tenant moves because you raised the rent too much all at once.

2) Home much more rent can you get if you re-rent the unit with a quick cheap make-over VS a complete fix-up. (Example a quick fix, paint and clean the carpets. A make-over, add features that will attract a higher paying renter -- like painting, flooring, blinds, appliances, window a/c, ceiling fans, etc.

3) Determine how much you can ask a tenant towards their rent raise. Just because someone makes good money and has savings doesn't mean they won't move to a better place that offers a few extra's at the same rent you wanted to charge them.

Rent can’t be based on expenses directly. It must be based on what the market will bear. Just because I have a big roofing job doesn’t mean that I can directly have the tenant pay. Hopefully I have developed an emergency account that I pull those expenses from.