How often to raise rents (by LARRY [MO]) Feb 24, 2021 10:09 PM|
How often to raise rents (by Robert J [CA]) Feb 24, 2021 10:48 PM
How often to raise rents (by Deanna [TX]) Feb 24, 2021 11:06 PM
How often to raise rents (by don [PA]) Feb 25, 2021 1:13 AM
How often to raise rents (by Hoosier [IN]) Feb 25, 2021 1:44 AM
How often to raise rents (by Bonanza [NC]) Feb 25, 2021 6:26 AM
How often to raise rents (by myob [GA]) Feb 25, 2021 6:38 AM
How often to raise rents (by Steve [MA]) Feb 25, 2021 6:48 AM
How often to raise rents (by myob [GA]) Feb 25, 2021 7:01 AM
How often to raise rents (by Jim in O C [CA]) Feb 25, 2021 7:54 AM
How often to raise rents (by S i d [MO]) Feb 25, 2021 7:59 AM
How often to raise rents (by Robert,OntarioCanada [ON]) Feb 25, 2021 8:11 AM
How often to raise rents (by WMH [NC]) Feb 25, 2021 10:15 AM
How often to raise rents (by Dave [MO]) Feb 25, 2021 11:04 AM
How often to raise rents (by Allym [NJ]) Feb 25, 2021 11:54 AM
How often to raise rents (by BRAD 20,000 [IN]) Feb 25, 2021 11:21 PM
How often to raise rents (by don [PA]) Feb 26, 2021 4:18 PM
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How often to raise rents (by LARRY [MO]) Posted on: Feb 24, 2021 10:09 PM
How often should you raise the rent? --208.124.xx.xxx
How often to raise rents (by Robert J [CA]) Posted on: Feb 24, 2021 10:48 PM
It all depends on many factors. When I had a new building go up across the street from my "A" apartments, mine had no special amenities while the new building had a pool, spa, rec room and all new appliances. So if I pissed my tenants off, the would move in a heart beat! My units were under rent control so I was limited to 3% a year in rent increases. The tenants didn't know that they were going to get a cheap 6 month lease across the street then whamo, there rent was going to market, like a 30% increase.
I will keep on raising older tenants who are way under market the 3 or 4% that I'm allowed.
But one commercial tenant kept on crying wolf -- couldn't afford a rest increase. So I look on social media and checked out their kids. Cars, private schooling, moped, nice fancy cloths and shoes. So I did a Mr. Landlord special, I wrote them a letter giving them a high rent raise. But then at the end of the letter I told the tenant that we can discuss it. I raised a tenant $500 in a commercial store. I really wanted around a $200 raise. But when they called they said they can only afford half the increase, so I agreed to $250 -- that's $50 more than I really wanted. --47.155.xx.xxx
How often to raise rents (by Deanna [TX]) Posted on: Feb 24, 2021 11:06 PM
A lot depends on your market. Are you in Miami? Oahu? Or are you in the middle of a Kansas cornfield? :) Is your target market white-collar professionals who don't notice a $50-$100/month change in their budget? Or are your primary tenants elderly seniors who budget things down to the penny?
To some of my tenants, $25 is the difference between eating vs not-eating for a week. I've had people who have chosen to go through the hassle of moving to a place that's $25-$50 month cheaper... even if the cheaper place is a literal shack.
But I have a very stagnant population in my market. There's not a lot to bring people into my area, versus, say, a college town, or a military base, or a major industrial center. If your geography is highly desirable because of (reasons), you have more flexibility in what you can expect, and people will go along with it, and if they don't, there are ten people who will.
I usually raise my rents at turnovers. One piece of advice from apartment-owners is, you should have about 33% turnover each year. If you have less, it means you're way under market. And if you had, say, an 8plex with stagnant rents, it's not just one place that's losing invisible money each month, but it's presumably all 8 units that are all under-market--- especially if you have zero turnover because people are anxious to not lose what they have. (That's one reason why rent control/stabilization/freeze ends up backfiring.) --137.118.xx.xxx
How often to raise rents (by don [PA]) Posted on: Feb 25, 2021 1:13 AM
No way would I want 33% turnover each year. Lose a month's rent at least, time to show it, marketing costs, repainting. No thanks. Rather keep it below market and like the old infomercial said "set it and forget it." --73.141.xxx.xx
How often to raise rents (by Hoosier [IN]) Posted on: Feb 25, 2021 1:44 AM
No set procedure here, but shoot for about 3% annually overall. If I have a great tenant, I will offer them no in crease if they sign additional year lease. If a tenant is a bit of a problem and I see them not taking care of the property but not enough to evict, they might get 5-6% increase.
I know some LLs have it right in their lease...automatic x% increase annually. --99.92.xxx.xxx
How often to raise rents (by Bonanza [NC]) Posted on: Feb 25, 2021 6:26 AM
When I rent I rent at market rates. Currently I am raising about every 2 years and 3%.
If the tenant is overly needy then I will raise more frequently. I have a few I like and haven't raised their rent because they pay on time, don't bother me, and are clean neat and nice.
At the end of the day, it's only yourself you are hurting by not raising the rent. "by Don" pointed out that if they leave, you have turnover expenses. In my experience when they leave I lose or spend about $3000 on a $1200/ month unit. Realistically it takes me 1-2 months to re-rent and I may have to paint or do some repairs. When I re-rent, the new rent is $50 more than the old rent so it does take time to recoup the expenses.
If they are nice I'd rather they stay and keep renting. IF they are high maintenance I'd rather them go and take the $ hit and try to get a better tenant. --65.188.xxx.xxx
How often to raise rents (by myob [GA]) Posted on: Feb 25, 2021 6:38 AM
We haven't done much this past year due to courts being closed. When we raise rent and tenant would get their back up we could always use the court to make them move. Our norm is 4 to 5 yr plan
1st year contract good to go. Second yr maybe a 25 to 30 raise along with yr 3. Year 4 we usually get the call from tenants that we 've been going up each year and we acknowledge that along with another increase-- a large one.
We rotate our stock just like other businesses. Keeps our places updated and frankly it only takes days to re-rent here.The More you rotate you stock the less work there is to do as opposed to grandma XYZ who's been livng 15 years in your place and THINKS SHE OWNS IT. --99.103.xxx.xxx
How often to raise rents (by Steve [MA]) Posted on: Feb 25, 2021 6:48 AM
As with most things in life it depends.
Normally before I decide on the amount of any increases I check out what similar units in my market are going for. I also go over my expenses to determine how much my cost have gone up from the previous year. I try to raise rents at least 3%-5% every year. If the market allows for it, I do major increases at turnovers. My 2 turnovers in 2020 saw rents jump by $375.00 & $425.00. I attribute this to people fleeing the city to a more suburban area.
Even though decent rentals in my area were few & far between, I chose not to raise anyone's rent in 2020. I did this mainly because all of my tenants despite the virus crap going on were faithfully paying their rent in full & on a timely basis. I did let them all know that they would be getting an increase during their next lease renewal. I also knew that with our government & courts tramping on my rights as a LL that it would take me many months & cost me thousands if I tried to get them out.
How often to raise rents (by myob [GA]) Posted on: Feb 25, 2021 7:01 AM
Steve ditto this year.
Love the increase you got. --99.103.xxx.xxx
How often to raise rents (by Jim in O C [CA]) Posted on: Feb 25, 2021 7:54 AM
I normally increase rents annually but in California rent increases are frozen util the pandemic is over. One good thing is all my tenants have paid 100% and on time the last 12 months. --99.23.xxx.x
How often to raise rents (by S i d [MO]) Posted on: Feb 25, 2021 7:59 AM
As often as the market will bear and your lease agreement allows.
I used to wonder the same question too, and it became a yearly nuisance. I was timid and afraid to raise the rent because I thought the tenant might move.
Then an imporant realization hit me: if MARKET RATE is $X and they are paying $X - $100....where are they going to go and get cheaper rent? The fact is there is nowhere else they can go and find cheaper rent, so why would they move unless they simply downgrade, and if / when they move I will quickly fill my vacancy at market rate.
That's he beauty of free markets. Price discovery is constantly going on. There is no "rule" except "what the market will bear." By definition, that means you should always sell rent at market price unless there are compelling reasons to do otherwise.
But if you don't want to mess with it as often, add an automatic annual increase to your lease. Mine is 2.9% automatic increase over the current rate in effect (so that this works for multiple years) if no one does anything. This leaves me freedom to ask for more if the market is heating up, but it protects me if I forget to send out the rent increase the minimum 30 days in advance. You could make yours any amount, but put something in there so you don't end up like these poor land lords who are still getting the same rent for 10 years in a row.
When you put the automatic rent increase in the lease, everyone knows what to expect up front. It's what we all agreed to do, and I've never had anyone fight back on it. --107.216.xxx.xxx
How often to raise rents (by Robert,OntarioCanada [ON]) Posted on: Feb 25, 2021 8:11 AM
Take a careful look at operating costs which increase every year. Noticed since shopping for groceries, hardware and building materials there were significant price increases where some were beyond the annual cost of living. Say the consumer price index is around 3 per cent per year where the vacancy rate is low or non existent then it is better to raise rent every year by 2 to 3 per cent to cover for annual increases in operating costs. Rental properties no matter what type will require major capital expenditures where replacing a heating system, roof, structural repairs, water heaters, appliances are costly where it is better to keep the rental units or houses in decent condition. Suppose the municipal or other governments legislate rent control then rent is locked where only can receive annual rent control increase which maybe below annual increases in operating costs. There are a lot nutcase left wing tenancy advocate groups where some jurisdictions governments fund those nutcases. They simply do not believe in private sector rental housing ownership where over time the objective is to bankrupt private sector rental housing providers. There is a reason why government owned rental units are not under rent control. --99.236.xxx.xxx
How often to raise rents (by WMH [NC]) Posted on: Feb 25, 2021 10:15 AM
I built in a $25/month increase for renewals just recently. I have several that are under market too much now after several years of not raising on a regular basis. So now it's in the lease.
I have two that really need to go up a few hundred dollars. No turnover there for 10 years at one, 8 at another. Rents have gone up only $150 over that whole time...one is a retired lady on her last legs, daughter is paying rent. Her unit is clean and nice but not updated of course...The other is a tenant who married and had a baby while living there. Place looks like it was updated yesterday... --50.82.xxx.xxx
How often to raise rents (by Dave [MO]) Posted on: Feb 25, 2021 11:04 AM
I raise annually. Keep up with your rental market. --173.47.xxx.xx
How often to raise rents (by Allym [NJ]) Posted on: Feb 25, 2021 11:54 AM
It depends how often you want them to get mad and move out if your building is not in tip top shape.
I give six months notice and let them know the percent, usually 3 percent. I have to do that soon as the water bills went up on the basis amount they charge for letting water come in. Usage is not changed. Also the town is using a new way to figure property tax increases based on the sales price of nearby homes being sold. That is so wrong and I hope they get sued. --108.24.xx.xx
How often to raise rents (by BRAD 20,000 [IN]) Posted on: Feb 25, 2021 11:21 PM
It is bad business to not raise rents.
Renters expect it. At least a little every year.
Your bills and taxes ARE going up so no increase means you are automatically giving up income, giving them a discount.
Don’t be shy.
My lease is clear: lease automatically renews each year with a 2.9% Cost of Living increase.
This amount has kept up with the market over the past 10 years.
A $600 rent 10 years ago should now be $850. I did a spreadsheet to calculate how much I lost by not doing that small increase every year - I lost $10,000 due to being shy. My fault - a paperwork error - they were left off the list.
We increased the rent $250 and she stayed.
In the last few months we increased 64 leases. No one left and only two requested a small discount from the increase.
In the past year we have only lost residents to eviction and buying a home.
I signed a lease yesterday and the new guy expressed relief that any increases would be “limited to 2.9%”. He said “Good! I don’t have to worry!”National statistics show only 9% state rent increase as a reason to leave.
Stay strong and manage.
How often to raise rents (by don [PA]) Posted on: Feb 26, 2021 4:18 PM
There's more to the decision than the consumer price index. Consider the neighborhood. Is it a hot one that is on the rise, is it stable, or is it on the decline. Avg. rents in the area may actually be going down, so don't assume a 3% increase is definitely justified. --70.90.xx.xxx
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