Question of increas rent

Before the virus, I had a new renter move in at $1200/Month into a 2BD/1BT Apartment in January 2020. Affect the virus Hit, and after the start of the following year, We did not increase the rent. For various reasons, we also have not grown the rent since then.

Phoenix has had some of the highest rent rate Increases in the United States, Over the last 3.4 years. In using current Section 8 data, As a standard for renting 2Bdr/-1BT units-then, the current rents are is-$1916./Month-- or $716 over the rent the current renter is now paying.

This renter's lease will renew -- 6.-15-2023. So we informed them, we would be Increasing their rent. He objected- "As usual"! He has not been a reasonable person to get along with over the 3.4 years.

We are considering the difference between the current Section-8 suggested rents of $1916/mo. - and what the renter is currently paying, $1200/mo., As a suitable place to adjust to.

This would be-- $1916-$1200=$716 x 1/2 equals.- $358./Month is what we would charge from now on!

As noted, The renter has not been reasonable To get along with. So, if we lose them, that would not be considered -a sufficient loss.

My question to this forum is-What are your Thoughts? Have you had similar events?—etc.? Let us know your thoughts

--72.208.x.xx

Question of increas rent (by plenty [MO]) Posted on: May 29, 2023 7:49 PM
Message:

In my state, I negotiate the rent with housing. The resident only get to decide to stay and pay their share or give notice to move. Are you sure you need to share the rent increase with the tenant? It's your business use paperwork to increase rent. No phone calls. They can move and pay that amount in another unit or pay you. Or you'll find another renter who will be thrilled to live in your unit subsided by HuD. In my state there is a 90 day to 60 days before Renewal to submit an increase otherwise it will continue at the old rate. I took did not raise rents due the pandemic but have been and catching up to market rates. --172.59.xxx.xxx

Question of increas rent (by DannyC [MO]) Posted on: May 29, 2023 8:11 PM
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If I’m reading this correct you are using the section 8 numbers as a reference and not that this is a section 8 property. It is a good place to get a comp value, but not always accurate. You should check Zillow and others as well. That said Plenty pointed out a couple points I was going to say as well. If Sec8 then here you are required to submit notice of the increase 60 days in advance. You are only 15 days out. Also if it is sec8 definitely raise to the highest amount and let housing tell you if they agree or they will try and counter. If this isn’t sec8 which I don’t think it is depending on AZ law you may already be to late to increase the rent as I’m guessing you needed to give that notice at least 30 days in advance. Depending on how your lease is worded if it automatically goes m2m then at this point I would let it go m2m and then send proper notice to renew. If the tenant isn’t easy to get along with then in my opinion I would increase to whatever the area comp is. If you want to give a little maybe $100 less. --107.77.xxx.xxx

Question of increas rent (by MikeA [TX]) Posted on: May 29, 2023 9:00 PM
Message:

First off, rent increases is not a negotiation, it's your decision. The tenants decision is to stay and pay higher rent or move, period. Maintain control of your property!

Second, as Danny mentioned, look at Facebook Marketplace, Zillow, or wherever the local market advertises. Find comparable units in the same neighborhood. Square footage, amenities such as garage, dishwasher need to be the same or accounted for in adjusting to get an apples to apples comparison for rent. The S8 allowance may be high or low so you need to establish your own comparables.

Finally, if the tenant is not cooperative then simply do not renew and then re-rent at the higher rate if you still can (usually that requires a 30 day notice). You do not owe him an explanation, simply issue a non-renewal letter. One of the criteria you should use when selecting a new tenant is "cooperation", if they badmouth previous landlords, make snarky comments at the showing, or are anything less than totally respectful then exclude them from consideration. --209.205.xxx.xx

Question of increas rent (by MikeA [TX]) Posted on: May 29, 2023 9:03 PM
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When he objected to the rent increase I would have simply said "so I take it that is your notice that you are going to move"

again, it's not a negotiation. Take it or leave it. --209.205.xxx.xx

Question of increas rent (by LisaFL [FL]) Posted on: May 29, 2023 10:54 PM
Message:

That’s easy. Determine what market rent is. If you want to be rid of him increase to market rent or simply non-renew him. If you want to keep him, increase to less than market rent. Give him plenty of notice. --24.236.xx.xx

Question of increas rent (by Still Learning [NH]) Posted on: May 30, 2023 2:27 AM
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For your case I would raise higher than half and get a better tenant at higher rent. I was not giving rent increases and after Brad 20,000 did some calculations on this site showing me how much I lost over not increasing for 7 years on a 10 year tenant, I realized I needed to change. I gave a 10 year tenant a $200 increase when she was $500 under. She chose to move on with her boyfriend which was better since I needed to deal with bathroom mildew, venting and painting. It was at a time you could not find people to do work. Ended up with a scam artist that got fired, locks changed, hired his sub par contractors to finish the job and rented for $500 more. Based on not being able to hire contractors, I delayed increases. I had another I needed to move on due to issues and raised to market over a 4 month period at $100 each month figuring if the tenant didn’t move on at least I was getting market rate. Things are easing now finding contractors so I am moving to increasing everyone either $50-100 and will slowly bring tenants more toward market. My tenants had been moving every 1-3 years other than 1 or 2 so I had been able to bring units up to market naturally. Covid, housing shortage, difficult market to buy in and sky rocketing rents have caused tenants to stay longer so now I will implement yearly rent raises. --107.116.xx.xx

Question of increas rent (by Sisco [MO]) Posted on: May 30, 2023 7:36 AM
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Art, raise your rents to the top of market rates. In my locale, the rates that section 8 publishes are never top of market rates.

As a landlord, I gain no goodwill by setting my prices under market price. Let the bargain hunters go elsewhere and focus on people who are motivated to live in your neighborhood. --149.76.xxx.x

Question of increas rent (by S i d [MO]) Posted on: May 30, 2023 8:27 AM
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Art, you said you didn't increase the rent for "reasons".

What are those "reasons?" Seriously, what are they?

Let me ask you this: let's say you purchase a set of 12 one-ounce gold coins as an investment, which as of today currently spot market price of $1960.

2 years from today, the spot price increases to $2400 an ounce.

I offer to buy them from you at the old price from 2 years ago... $1960, basically causing you to lose out the gain of your investment.

What "reasons" would you use to justify selling those coins to me for $2200 each, right about in the middle of what they were wroth 2 years ago and what they have increased to today? Is it the same reason you have for not increasing the rent? Why or why not?

This is a business, an investment. Act accordingly. Rent should go to market. There is no good reason not to charge market rent. If you had hired a property manager to manage these rents for you, I'd hope you would fire him or her for not maximizing the value of your investment.

--184.4.xx.xxx

Question of increas rent (by zero [IN]) Posted on: May 30, 2023 8:42 AM
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I just stumbled across rentdata dot org and put a county in where I have a few rentals.

The numbers are higher than I charge by a bit. Last place I filled the tenants talked about how reasonable my prices were.

Guess I need to brush off the FB password and see what I can find in there as far as local goes.

Probably not until after I go to the convention tomorrow tho. --107.147.xx.xxx

Question of increas rent (by RB [TN]) Posted on: May 30, 2023 9:46 AM
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Grab'em by the ankles, lift and shake. --24.183.xxx.xxx

Question of increas rent (by Oregon Woodsmoke [ID]) Posted on: May 30, 2023 9:51 AM
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$358 is a pretty big rent increase all at one time. But if you don't care if he leaves, then it doesn't matter if he chooses to leave instead of pay.

I suggest some careful research. Do not rely upon Section 8 figures about rent.

Ending up that far behind is why you do smaller increases every year so it isn't such a shocking amount. Although splitting the difference is more than fair and your tenant is going to look around and see it is still a bargain, so raising the rent is probably not going to get rid of him.

If it makes you feel better, I didn't raise rent the first year of covid and then my rent raises on my extremely good tenants have been pretty small because I didn't want to deal with a vacancy during Covid and they were worth keeping. --76.178.xxx.xxx

Question of increas rent (by Hoosier [IN]) Posted on: May 30, 2023 11:32 AM
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Double check the fair market value, and raise it to that level...and let them move out. As others have said, it's not a negotiation. --99.92.xxx.xxx

Question of increas rent (by Ray-N-Pa [PA]) Posted on: May 30, 2023 10:47 PM
Message:

You need to raise rents. If you elect to "look out for your tenant", when you finally make that market rent adjustment, you will be kicking them out.

Steady increases are expected --24.101.xxx.xxx

Question of increas rent (by zero [IN]) Posted on: May 31, 2023 8:19 AM
Message:

Sent two increases out this week. Not large but the 3% like I explained to them last year.

I am still below market I think. I also bumped the empty up a bit before I filled it. --107.147.xx.xxx

Question of increas rent (by Barb [MO]) Posted on: May 31, 2023 10:05 AM
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My newest places? Always at the top. Small increases are normal. --149.76.xxx.xx

Question of increas rent (by Scott [IN]) Posted on: May 31, 2023 10:22 AM
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You said "current Section 8 data." I'm assuming that you are using HUD FMRs (fair market rents). These numbers include a utility allowance, so they don't necessarily give an accurate picture of true market rent value. As others said, don't let this be your only source of information.

Also, it is important to raise rent every 12 months, even if it's only a small increase. Tenants learn to expect it and are far less likely to throw an entitled tantrum. --107.141.xx.xxx

Question of increas rent (by Wilma [PA]) Posted on: May 31, 2023 12:56 PM
Message:

MikeA(TX)'s response concerning comparable properties was spot on. That said, I'd raise the rent high enough to get this guy out and someone more cooperative in. --96.245.xx.xx

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