Hesitant in raising rents (by Roy [AL]) Feb 15, 2022 11:55 AM|
Hesitant in raising rents (by NE [PA]) Feb 15, 2022 11:56 AM
Hesitant in raising rents (by Homer [TX]) Feb 15, 2022 12:10 PM
Hesitant in raising rents (by Roy [AL]) Feb 15, 2022 12:10 PM
Hesitant in raising rents (by Robert J [CA]) Feb 15, 2022 12:28 PM
Hesitant in raising rents (by Roy [AL]) Feb 15, 2022 12:30 PM
Hesitant in raising rents (by NE [PA]) Feb 15, 2022 12:38 PM
Hesitant in raising rents (by Homer [TX]) Feb 15, 2022 12:51 PM
Hesitant in raising rents (by Roy [AL]) Feb 15, 2022 12:53 PM
Hesitant in raising rents (by NE [PA]) Feb 15, 2022 1:00 PM
Hesitant in raising rents (by Roy [AL]) Feb 15, 2022 1:08 PM
Hesitant in raising rents (by Jim in O C [CA]) Feb 15, 2022 1:08 PM
Hesitant in raising rents (by NE [PA]) Feb 15, 2022 1:13 PM
Hesitant in raising rents (by 6x6 [TN]) Feb 15, 2022 1:15 PM
Hesitant in raising rents (by 6x6 [TN]) Feb 15, 2022 1:17 PM
Hesitant in raising rents (by Plenty [MO]) Feb 15, 2022 1:21 PM
Hesitant in raising rents (by MMIT [VA]) Feb 15, 2022 1:24 PM
Hesitant in raising rents (by Roy [AL]) Feb 15, 2022 1:52 PM
Hesitant in raising rents (by Robert,OntarioCanada [ON]) Feb 15, 2022 1:54 PM
Hesitant in raising rents (by Plenty [MO]) Feb 15, 2022 2:01 PM
Hesitant in raising rents (by Marcia [WI]) Feb 15, 2022 2:07 PM
Hesitant in raising rents (by Jason [VA]) Feb 15, 2022 2:20 PM
Hesitant in raising rents (by Roy [AL]) Feb 15, 2022 2:26 PM
Hesitant in raising rents (by Dave [MO]) Feb 15, 2022 3:09 PM
Hesitant in raising rents (by S i d [MO]) Feb 15, 2022 3:41 PM
Hesitant in raising rents (by Roy [AL]) Feb 15, 2022 4:00 PM
Hesitant in raising rents (by Robert,OntarioCanada [ON]) Feb 15, 2022 4:10 PM
Hesitant in raising rents (by Oregon Woodsmoke [ID]) Feb 15, 2022 4:30 PM
Hesitant in raising rents (by RentsDue [MA]) Feb 15, 2022 4:38 PM
Hesitant in raising rents (by Vee [OH]) Feb 15, 2022 7:25 PM
Hesitant in raising rents (by Sisco [MO]) Feb 15, 2022 9:17 PM
Hesitant in raising rents (by MikeA [TX]) Feb 15, 2022 9:36 PM
Hesitant in raising rents (by Marcia [WI]) Feb 15, 2022 9:47 PM
Hesitant in raising rents (by Nicole [PA]) Feb 16, 2022 9:10 AM
Hesitant in raising rents (by Roy [AL]) Feb 16, 2022 12:00 PM
Hesitant in raising rents (by Britt [NC]) Feb 19, 2022 7:51 AM
Hesitant in raising rents (by Roy [AL]) Posted on: Feb 15, 2022 11:55 AM
Why is it that many landlords (including myself) are hesitant in raising their rents? Before I confess my personal reason, I would like to get feedback from other LL's here. And if you are not the least bit hesitant about raising your rents, I sure would like to hear from you! --71.207.xxx.x
Hesitant in raising rents (by NE [PA]) Posted on: Feb 15, 2022 11:56 AM
Is this just a discussion in general or are you looking for advice in overcoming your hesitancy? --174.198.x.xx
Hesitant in raising rents (by Homer [TX]) Posted on: Feb 15, 2022 12:10 PM
I sent out notices a couple months ago letting tenants know that in April they would be receiving massive rent increases. Almost everyone is month to month. I advised if they thought they couldn’t handle the increase, it wouid be a good time to start searching for a new place. I also offered to provide a letter of reference for most of them. I am hoping for some turnovers. Even with my big increasees, I am afraid I will still be under market rent. I am seeing houses in my area at $1900 per month, I did have a January vacancy due to divorce, had well over 300 contacts in 5 days while I
Selected the best one. Vacancies? Bring them on ! I consider my homes mostly C+ maybe B- --66.169.xxx.xxx
Hesitant in raising rents (by Roy [AL]) Posted on: Feb 15, 2022 12:10 PM
Just a discussion in general here which is my trademark posting. No, I do not need you to counsel me in overcoming my hesitancy to raise rents. Now, if YOU (not me) are hesitant in raising YOUR rents, then I would be interested here in knowing why. My post here is nothing more than an attempt to have a group discussion (roundtable) here about raising rents. --71.207.xxx.x
Hesitant in raising rents (by Robert J [CA]) Posted on: Feb 15, 2022 12:28 PM
Just to raise rents without a plan isn't a wise decision. When I wanted to raise rents in my 16 unit apartment property I didn't just send everyone a rent increase letter! Had I done that, I could have lost 1/3 of my tenants and cost me $50,000 in lost rent and remodeling costs. So instead I did the following:
When my first unit had a natural vacancy, I did a fantastic number on that unit -- a total remodel quickly. I put in a new kitchen with appliances. New laminate flooring. Mini-blinds. Then I easily rented it out for top dollar, establishing a higher "Base" rent for my building. All of the other tenants noticed that a tenant that had been paying $775 moved to a new building, and the landlord (myself) fixed up the old unit making it superior to anything on the market in the area at a competitive price, $1,500 per month.
So old tired unit was paying $775/per month. Fixed up it commanded $1,500/per month. So everyone could see that the value in todays market for a unit with a slap coat of paint, some new appliances and laminate flooring would go for around $1,200 per month.
SO any current tenant paying under $1,200 a month should get a rent increase. If they left I wouldn't care because I could fix it up and get between $1,200 to $1,500 per month.
So every month I raised two tenant's rent. One would pay it with a smile on their face and the other tenant would protest. I told them they had options. Pay the increase of $30-$50 per month or move.
This is just one plan for that property which was under rent control. --47.155.xx.xxx
Hesitant in raising rents (by Roy [AL]) Posted on: Feb 15, 2022 12:30 PM
Why are you hoping to have some turnovers? If those tenants just paid your hefty rent increases,...wouldn't you be happy with that? --71.207.xxx.x
Hesitant in raising rents (by NE [PA]) Posted on: Feb 15, 2022 12:38 PM
I no longer have hesitancy. Unless it’s systematic hesitancy. You needing counsel from me, well that’s another thread altogether. ;-) --174.198.xx.xxx
Hesitant in raising rents (by Homer [TX]) Posted on: Feb 15, 2022 12:51 PM
Roy. Why am I hoping for vacancies? Simple , I need something to do. Lol. Seriously, some have been with me way too long. I would love the opportunity to get back in some houses and bring them up to date, --66.169.xxx.xxx
Hesitant in raising rents (by Roy [AL]) Posted on: Feb 15, 2022 12:53 PM
I think the reason many LL's hesitate to raise rents is because they 'fear having a vacancy'. My hesitancy stems from the fact all of my rents started out at 'above market' instead of 'below market' which many LLs seem to prefer. I have never understood why any LL would consciously rent anything at 'below market',..especially in this inflated rental market!!!
To me, not raising rents is the equivalent of having a day job for 10 plus years and NEVER getting a pay increase! You start out at min. wage and 10 years later, you are still working at min. wage. This is the reason I raise my rents even though I am still a little hesitant about doing it. --71.207.xxx.x
Hesitant in raising rents (by NE [PA]) Posted on: Feb 15, 2022 1:00 PM
To add to this roundtable discussion, do you think that having your rents above market possibly has anything to do with issuing five notices this month? --174.198.xx.xxx
Hesitant in raising rents (by Roy [AL]) Posted on: Feb 15, 2022 1:08 PM
No relationship at all. And why are you so 'hung-up' on that other post of mine? I think you need some counseling. --71.207.xxx.x
Hesitant in raising rents (by Jim in O C [CA]) Posted on: Feb 15, 2022 1:08 PM
I raise the rent to cover my increases In taxes, insurance and increased maintenance costs from trade
people. It has been years since I lost a tenant due to reasonable increases.
Now a PITA gets the maximum increase hoping they will move. --99.23.xxx.x
Hesitant in raising rents (by NE [PA]) Posted on: Feb 15, 2022 1:13 PM
There’s certainly a possible correlation. If you’re maxing out what they can afford. --174.198.xx.xxx
Hesitant in raising rents (by 6x6 [TN]) Posted on: Feb 15, 2022 1:15 PM
I will join your round table discussion Roy.
I don't have very much experience to share, but with my first few tenants and turnovers, I never raised the rent.
Why? Because I didn't want to fix what wasn't broke. I was afraid of them moving even if I wasn't completely happy with them.
After learning from this site, I now have an automatic rent increase built into my lease (thank you Brad and others). I still need to figure out how to change it around in times of a market like we have now.
I am now more happy to increase rents. --73.120.xx.xxx
Hesitant in raising rents (by 6x6 [TN]) Posted on: Feb 15, 2022 1:17 PM
I welcome coaching from NE. --73.120.xx.xxx
Hesitant in raising rents (by Plenty [MO]) Posted on: Feb 15, 2022 1:21 PM
Cause they are already up there and I'd rather not be bothered with communicating with them. Leave them alone. I'm on the beach, on a trip or otherwise keeping busy. --172.58.xxx.xxx
Hesitant in raising rents (by MMIT [VA]) Posted on: Feb 15, 2022 1:24 PM
I try to raise the section 8 rents every year. Section 8 is allowing 7-8% increases this year.
On the non section 8 tenants, I am doing 5-10%. One tenant did a “self imposed” 11% increase last fall!
The short term rental had a 25% increase last fall. My wife wants to do another increase this spring.
But, I have a nice, older tenant that lives alone and is struggling to pay the rent. She is probably $200/month under market. She has some old age problems and had to quit one of her jobs. She pays rent 10 days early every month. The house is the cleanest of all my rental houses. She is my charity case. --98.181.xxx.x
Hesitant in raising rents (by Roy [AL]) Posted on: Feb 15, 2022 1:52 PM
6x6 said, "I welcome coaching from NE"
I think this is just great! Now he can preach to you instead of me. LOL
MMIT - That is the problem I always had with Section 8,...they determine the rent increases and not me. And if you don't want Section 8 tenants, just keep your rents above market and that will stop every one of them.
Plenty - why does talking with your own tenants bother you?
Hesitant in raising rents (by Robert,OntarioCanada [ON]) Posted on: Feb 15, 2022 1:54 PM
In the this decade rental housing providers are going many challenges which are having the capital to make significant improvements for energy efficiency where as cost of electricity, natural gas goes up then having a inefficient rental unit is going to be vacant for a very long time. It may not cover the costs of inflation but at least 3 per cent per year so will not fall far behind. Remember no one wants to compete with substandard rental units where the rent is lower but also the standard of maintenance. Some may leave where a rental unit or house in decent condition will easily rent out. I remember the time at the apartment building where under rent control had two significant rent increases where the first 20.25 per cent and the second year 14.75 per cent where the tenants lost the rent appeal where there no hope of winning a rent appeal where in January five rental units were vacant then put on ad in newspaper where all the vacant rental units were rented where no one complained about rent as rent was still way below other rental units. One was landlord who raised rents on the building he owned then made money off me by paying a lower rent. Capital expenditures will never come out of economically depressed rent. --68.69.xxx.xxx
Hesitant in raising rents (by Plenty [MO]) Posted on: Feb 15, 2022 2:01 PM
My section 8 are getting raised request forms. --172.58.xxx.xxx
Hesitant in raising rents (by Marcia [WI]) Posted on: Feb 15, 2022 2:07 PM
I, like many other landlords, have been hesistant to raise rents in the past and when I first started out LLing. I have been a landlord now for 25 years, and over the past 5-10 years, have gotten over the fear of vacancy. I do like t keep my rents a little below market value to obtain a good tenant, and like Robert (CA), I also like to maintain my properties in top of the line condition. I live by the premise that if I have a very nice apartment, I will hopefully attract better tenants.
I have one unit where the tenants have been with me for 7 years now and are paying $1225 plus water and their gas and electric. The unit is 1500 square feet, 3b, 1 ba. Comparable units in the area are going from 1500-2000 (approximatey $100/square foot). So this past year, I put in a new central air unit (($3000) and redid a front porch/balcony to the cost of $6000. Ultimately, I raised their rent $100 and that is still under market rent. --96.11.xxx.xx
Hesitant in raising rents (by Jason [VA]) Posted on: Feb 15, 2022 2:20 PM
Ever since I wrote automatic renewals into my lease, I have Zero hesitation raising rents. Clear now sends me a reminder 60 and then 30 days before their “lease expires” (they’re all m2m) at the 30 day mark, I increase it through clearnow’s website without even notifying the tenant because (1)I gave them a year’s notice in the lease and (2) clear now will send them an email letting them know of the change. I hesitated in the past to raise rents on long term tenants because I didn’t want a turnover. But I’ve grown as a landlord since those days. --50.202.xxx.xx
Hesitant in raising rents (by Roy [AL]) Posted on: Feb 15, 2022 2:26 PM
You said, 'a little below market = a good tenant'
I am just the opposite / 'a little above market = a good tenant.' And we both maintain our properties in top condition too.
Would anyone else like to comment here? Is there any correlation between the amount of rent quoted and the quality of tenant received?
Hesitant in raising rents (by Dave [MO]) Posted on: Feb 15, 2022 3:09 PM
No hesitancy here. I even raised during covid. It's time to raise again. --173.47.xxx.xxx
Hesitant in raising rents (by S i d [MO]) Posted on: Feb 15, 2022 3:41 PM
Here's one consideration I rarely see discussed when talking about "market rent." In my experience, there's a range that is "market." As the rent gets higher, that range get broader.
Example: No one knows that house X's market rent is $679.31.
I find a variation of +- 10% to be within a reasonable "market rate."
So, a "$600 house" could rent anywhere between $540 - $660 and still be "at market" because it's equal to or less than 10% either way.
Likewise, a $2000 house could rent anywhere between $1800 - $2200 for the same reason and still be at market rate.
The reason for this is there are subtle variations like timing and the fact that not every house is precisely the same, but generally people think it terms of 2-bed house, 3-bed house, condo, apartment, etc.
So to be clear, when people say, "a little below market" what I'm hearing is they are already at the bottom end of the range and they go even lower. That's where trouble is. If you rented your $1000 house last year and today the market is $1,100...you're not doing badly. Just do your normal COLA and call it good. But if you rented a house for $1,000 five years ago and haven't done any COLA's, then you're probably missing out on $500 or so of income every year!
Stay sharp; stay focused. People who pay attention to their flocks and herds are following wisdom.
Hesitant in raising rents (by Roy [AL]) Posted on: Feb 15, 2022 4:00 PM
When I talk market rent, I am only referring a relatively small neighborhood usually within a 6 block (not mile) radius of my vacant house. Rents can vary wildly when you look at similar houses but located all across town.
Also, market rent is not determined by what the house next door or across the street is currently rented at because those tenants could have been living there for 10 years and could still be paying market rent from 10 years ago! I see this a lot. Market rent has to be determined from whatever the current vacant rental house market is demanding. In other words, my only vacancy is competing only with other nearby vacant houses. Tenants will pay more (above market) for mine because it is usually in much better condition than the competing vacant houses. --71.207.xxx.x
Hesitant in raising rents (by Robert,OntarioCanada [ON]) Posted on: Feb 15, 2022 4:10 PM
Like any rental unit or house the money spent on maintenance pays off where people will always want a better rental unit or house to live in. The real challenge coming up is the increasing of utilities where upgrading is going to be expensive. Eventually the standard efficiency boilers, furnaces and water heaters will be no longer available where only high efficiency is the norm. Higher efficiency boilers, furnaces, water heaters are going cost more to buy along may cost more to install. Here it is next to impossible to rent anything with baseboard electric heat as electricity costs are really high. In the end it is not about price but value where a poorly maintained rental unit or house offers no value other then price point. --68.69.xxx.xxx
Hesitant in raising rents (by Oregon Woodsmoke [ID]) Posted on: Feb 15, 2022 4:30 PM
When I get a new tenant, the rent is absolutely the very top rate that I can get for the property. That usually keeps me for about 2 years and then I can do small annual increases.
Rents here, though, have gone crazy.
I will be raising this year. I'll wait and see what the market is doing, but right now plan on raising at the official rate of inflation.
I hate to loose my really good tenants. It's always a gamble getting new tenants,no matter how carefully you screen.
Anther issue here is that I simply can not get any sort of workman or handyman, or professional of any kind to do any work. So if I have a vacancy, I am not going to be able to call anyone to do any upgrades or repairs.
My good heat company, has a six month waiting list. I have a decent painter and it is the same, at least a six month waiting list. I've been trying to get someone to do some tile work and can't get anyone. I don't really want to lose a tenant and then have to go in and do all the cleaning and updating by myself. My knees won't take it an more.
I can't leave rents where they are, but I'm hoping to not raise them enough to make my tenants leave. --76.178.xxx.xxx
Hesitant in raising rents (by RentsDue [MA]) Posted on: Feb 15, 2022 4:38 PM
I am hesitant to raise rents right now, but I am going to do it anyway. It has nothing at all to do with fear of a vacancy. Nobody has to worry about a vacancy here. I don’t want to trade my tenants for ones that may be difficult. This is a hard state to be a LL in, the most important part of this business happens before you give them the keys. Another “ problem”- these are high end rentals. The tenants have been paying top dollar all along. The lower end places are now catching up but I don’t know that justifies me going even higher. I am going to increase to cover the rising operating costs but I’m not going to gouge just because I can. All tenants pay their own utilities and they just tripled here. So everyone is paying about $400.00 per month more for that. --68.191.xx.xx
Hesitant in raising rents (by Vee [OH]) Posted on: Feb 15, 2022 7:25 PM
I agree with you Roy aiming at Marcia-WI, when you have higher asking prices you don't have to spend time looking through the frogs - no kissing at all!! If a tenant works out to be well manicured already or easy to train then when you raise other rents send a note showing you have skipped the rent increase because they (clean fan blades, weed flower beds, pay or play with the weed-eater around your place - Pick a helpful task), lowering standards is not helpful at all, always do what is best for the property - unless you and the tenant have already ordered the wedding cake... --76.190.xxx.xxx
Hesitant in raising rents (by Sisco [MO]) Posted on: Feb 15, 2022 9:17 PM
Reasons for hesitation in raising rents: timidity, avoiding conflict, fear of rejection, tunnel vision of the potential tenant base, would rather be right than rich, want to be cheaper than competitors.
Increasing rents for LL’s afflicted with the aforementioned disorders is tough, it can be overcome.
IMHO, our current inflation rate has increased the cost of everything by 15 - 20% in the past 12 months. A 20% annual rent increase is required to stay even. It is time to disregard the value of past experience. It hasn’t been like this before.
My recent experience indicates that customers interest is not diminished by raising rents by 20%.
Hesitant in raising rents (by MikeA [TX]) Posted on: Feb 15, 2022 9:36 PM
I think it really boils down to your viewpoint, micro VS macro.
In a normal year (not like recent 30% increases) I might raise rent from $950 to $1000. If the tenant moves out then I'm likely going to have a month vacancy while I paint and get it ready, in essence the vacancy costs $2000. It will take 40 months of higher rent to make that back. Is it really worth it from a micro view point?
Once you switch to looking at it from a macro level (XXX properties X $50 each = a lot of money yearly) the hesitancy goes pretty quickly. You realize just how much money you are leaving on the table by not raising rents little by little. That helps quell the hesitancy even in the most risk averse person.
Hesitant in raising rents (by Marcia [WI]) Posted on: Feb 15, 2022 9:47 PM
Roy: After re-reading my post again, I guess I misspoke about having a lower than market rent = better tenants. What I really meant to say, is at the end of my post; a very nice apartment and keeping my units in top notch condition will attract a better tenant.
I also agree with Vee (OH) Although I usually don't like my tenants doing any work,(but I would let them clean the fan blades) as they probably wouldn't do it to my standards :)However, if I do find a tenant that keeps the unit in tip top shape, yes I am less likely to raise the rent very much or very infrequently. --96.11.xxx.xx
Hesitant in raising rents (by Nicole [PA]) Posted on: Feb 16, 2022 9:10 AM
I didn't read through all the responses but in addition to the "fear of vacancy" you mention above, it's also "fear of the unknown".
I've read on here previously that tenants won't move out over token raises. Lower end tenants absolutely will move out over a $15 raise in rent.
The balance of history with a no drama, low upkeep, rent paying tenant who you are comfortable with and is comfortable with you versus someone else coming in able to pay a higher rent. Yes, everybody knows to screen but paperwork is only a very small snapshot of their day to day life. --98.237.xxx.xx
Hesitant in raising rents (by Roy [AL]) Posted on: Feb 16, 2022 12:00 PM
I agree with everything you said. However, anybody who fears the unknown probably should not be a LL to begin with. You can fully screen someone but never really never know the tenant until after you have handed over the keys.
It is the tenants who live on a fixed income that are the most sensitive to rent increases. For this reason, I screen for people who have decent jobs and a good rental history. --71.207.xxx.x
Hesitant in raising rents (by Britt [NC]) Posted on: Feb 19, 2022 7:51 AM
I'm not hesitant right now because there is a shortage of housing, including rentals, and most of my stuff is under market. I want to get it up to market at least. The only people moving this year are military transfers. --24.211.xxx.xx