I have slowly been raising rent on existing tenants. Very slowly. Yearly rent increases of ( average $45.00). Not a lot when you consider the homes are renting at $1300.00-$1400.00/month, but the market rent is close to $2000.00. Just had a new tenant move into one at $1900.00. Irritating when they act like I’m gouging them at a $45.00 increase. One says we need to negotiate. Absolutely NOT! One keeps coming up with nuisance complaints. Assuming he does not realize how far under market his rent is. I did screen shots of all the area comps and I would love to send them to him to stop the nonsense. Too petty?

Try this letter next time instead of just telling them the increase. (unless you want them to move) I more often than not get $50 or more per unit on units renting at half the rent of yours. I always set the new rent at the maximum if they dont respond. It helps get the response and helps keep them from low balling me.

___/___/______

Dear _____________________________________________,

Thank you for your long-term tenancy at: _______________________________________________________________________.

Upon review of leases recently, we notice that it has been some time since your rental rate has had any adjustment.

We strive to keep rents as low as possible for folks, as we know times are tough. However, the current increase in rents nationally over the past year have went up between 8.4% to 17.1%. This would put the current rent for your apartment between $________ & $________.

We know that this would be a substantial increase and want to keep you as a resident. To keep units near market and with costs of operating the buildings increase year after year and those costs must be spread out, rents must be periodically increased. Instead of increasing the rent to an unaffordable point, we like to give our residents an option.

We would like YOU to determine what YOU are comfortable with in that range, as an increase in monthly payment.

We are also aware of the headaches and cost involved with relocating and want to be as fair as possible with all of our residents. This method has helped residents be able to stay in an affordable unit without having to pay a market price that is beyond their comfort level.

Please fill out the following and return it ASAP:

---------------------------------------------------------------------------------------------------------------------

I/We are comfortable with a rent increase of $______.___ to a new payment of $______.___, beginning on ______ 1st, 20___.

Signature(s):_________________________________Date:___/___/______

If we don’t hear from you within 60 days, we will assume you that are comfortable with the rental increase to a new payment of $____.__ beginning on: ___/___/______.Thank you for your attention to these matters,

NE - honestly,

what percentage of your Tenants have the mental capacity

and fortitude to fill it out in its entirety and return it

in a timely manner, without blowing a head gasket ?

When I purchased new SFH during china virus. I spoke with existing tenants and they said the home had no issues. After I closed, I sent them a $75 a month increase but gave them 60 days notice of said increase. They started moaning about this and moaning about that and I told them when you said six months ago nothing was wrong with the house. What has changed?

For a valued tenant my rents are 5 to 10% under market. When I get blow back I invite the tenant to shop around and see what's available. 99.5% of the time they find out if they

didn't already know that they have an very reasonable rent.

For a valued tenant my rents are 5 to 10% under market. When I get blow back I invite the tenant to shop around and see what's available. 99.5% of the time they find out if they

didn't already know that they have an very reasonable rent.

For a valued tenant my rents are 5 to 10% under market. When I get blow back I invite the tenant to shop around and see what's available. 99.5% of the time they find out if they

didn't already know that they have an very reasonable rent.

For a valued tenant my rents are 5 to 10% under market. When I get blow back I invite the tenant to shop around and see what's available. 99.5% of the time they find out if they

didn't already know that they have an very reasonable rent.

A developer purchased the building next to mine and began the process of evicting the tenants and getting his plans approved. During this period there were homeless living next door in the abandoned building doing drugs and other unspeakable things. My tenants had to suffer because no one in City Government would help. Not the police, City Counsel, the County Health Department, Housing nor code enforcement.

So in turn I didn't raise rents for the two years of these issue. Then came the Pandemic and no one was allowed to raise rents from February 01, 2020 thru February 01, 2024.

SO THESE TENANTS OF MINE HAD NOT HAD A RENT INCREASE FOR AROUND 6 (six) YEARS! SO last week I issued them a 30 day notice, delivered 30 days early about their rent increase.

Everyone in that property hates my guts over a 4% ($30+) dollar increase. So they contacted Housing to report things. A list like dripping faucet, damaged mini-blinds, etc.

So I sent every a letter. BY me not raising their rent over the past few years, they saved on average $2000 by not having their rent increased a mire 4% each year. And that current rent have going up substantially. Each tenant saved over $22,000 by me allowing their rent to be way under market!

A developer purchased the building next to mine and began the process of evicting the tenants and getting his plans approved. During this period there were homeless living next door in the abandoned building doing drugs and other unspeakable things. My tenants had to suffer because no one in City Government would help. Not the police, City Counsel, the County Health Department, Housing nor code enforcement.

So in turn I didn't raise rents for the two years of these issue. Then came the Pandemic and no one was allowed to raise rents from February 01, 2020 thru February 01, 2024.

SO THESE TENANTS OF MINE HAD NOT HAD A RENT INCREASE FOR AROUND 6 (six) YEARS! SO last week I issued them a 30 day notice, delivered 30 days early about their rent increase.

Everyone in that property hates my guts over a 4% ($30+) dollar increase. So they contacted Housing to report things. A list like dripping faucet, damaged mini-blinds, etc.

So I sent every a letter. BY me not raising their rent over the past few years, they saved on average $2000 by not having their rent increased a mire 4% each year. And that current rent have going up substantially. Each tenant saved over $22,000 by me allowing their rent to be way under market!

Used to only increase rent on turn over.

Then I found this site and learned to do it annually. I have a simple paper that states that because of operating expenses such as labor, materials, taxes, and insurance increasing there will be a new rent of $XX effective on XX date.

I am below a little on my places. Nobody has complained. I know a few have gone looking and realized what the comps are like.

Would rather keep them, but if they complain they can leave and I can bump more than the 3%.

Win/win for everybody.

At only $45 per month increase, you'll never catch up. In 10 years your rents will be in the $1800 range and comps will be at $2400. Think of how much $$$ you've already left on the table for prior years and how much more you'll leave on the table in the coming years. It has to be tens of thousands of dollars. It appears they don't appreciate you helping to fund their lifestyle.

In my opinion, you should take the spread between your rents and market rate and increase your rent at least 10% of that difference. For example, you say your rents are around 1300, but market rate is 2000, so there is a $700 gap. You need to be raising your rents by a minimum of 10% of that gap ($70 per month) to have this investment make any sense.

I suspect your tenants have figured out that you're someone they can protest to and you won't argue. I have frequently noticed when buying a property from a landlord who was way under market rate that the tenants were conditioned to expect cheap rent and they expected me to be compliant to their wishes. I wasn't, and they moved within the year.

Honestly, it may be worth it for you to do what I call a "reset". Take your oldest, most tired property and give them a 60 day notice to move out, telling them you need to do a lot of work on the property and can't do it while people are living there (assuming that is true). When they move, it'll be February - clean the place up, replace what it needs, update it, and it'll be ready for a new spring tenant. Wash, rinse, repeat.

What I used to do was send a note out saying something like the below. I tailored it to how "good" the tenant has been...

Good tenant:

Dear Tenant,

We have done a recent market analysis and determined that your rent should be increased by $60/month. However, you've been a good tenant, have paid on time each month, taken care of the house, been a good communicator, and not caused any issues. As a result, we will withhold a portion of the increase so long as you continue to pay on time, and only add $40/month to your rent. This will make your new rent payment $1,060/month effective xx/xx/xxxx. Thank you again for being our tenant.

Not so great tenant, but not bad enough to evict

Dear Tenant,

We have done a recent market analysis and have decided to raise your current rent by $60/month. This will make your new rent payment $1,080/month effective xx/xx/xxxx and we will begin debiting your bank account as such on that date.

Thank you again for being our tenant.

Keep it simple, silly!

The phone company, the grocery store, the doctor ever tell you the whole "prices are going up... here are my competitiors, etc" yadda, yadda?

No. But people pay or they go elsewhere.

Why? Because that's business.

Run you rentals like a business is best.

"Dear Tenant, we appreciate your business. Just want to let you know that effective (date), the new rent will be $XXX. Please be sure to update your autodraft. If this doesn't work, we need your notice no later than (date). Thank you for your business!"

Nothing to argue about. Pay or leave. It really is... THAT simple.

Another vote for not petty. Senior citizen lady with her checkered past adult daughter going this out when they thought "gouging" was a 3 bdrm downstairs apt with off street parking and w/d hookup all utilities included for $800 (aka 1992 prices). They soon found out and ended up living at a friends house until the friend kicked the daughter out for being mean to her mother.

RentsDue,

Hard truth? I know you are a sensitive person but your fear is costing you a LOT of money. $700 under market x 12 = $8400 per year per house!! That's 6 months of rent!

Like Sisco - what are YOU benefiting by giving away free rent?

Like SID - my letter is simple. I use Jeffrey's approach - "We work to keep rents low but expenses out of our control have gone up (Insurance, property taxes...). Your new amount will be $XXXX starting Jan 1.

This might be a good time to convert to our Worry Free Payday Plan weekly rent $XXX each Friday.

If you feel you cannot afford this contact our office with your proposed amount."

I also hand write on each one "Rents have gone up 17%. This is only 2.9%"

Out of 100 letters ONE or MAYBE TWO offer a few bucks less. If they offer $15 less we approve a $7 discount. Win Win.

It is what it is. Don't be afraid to MANAGE. It takes courage. RAISE THE RENT to market. They won't move out.

If a PM was letting you loose that much money I would fire them.

BRAD

If the person wants to negotiate, then negotiate.

You will have to do 15.5 yearly increase of $45 to get to current market. In that 15 years how much more do you think market rates will be? That's only a 3.2% increase when inflation has been running upwards of 9-10% the last two plus years. You are losing ground even with your increase. I mean this will all respect, that's a crazy approach. You need to be doing 15% yearly increases minimum until you get to market.

Start with the one that's causing more time investment, send him a new increase that brings him to market rent right away. If he's going to cause problems then you should be getting paid at least market rent. Then explain to the one who wants to negotiate that you have $700 per month that you have to catch up in the next year or two so they may need to look for another place they can afford, don't let their problems become your problems. It's not a negotiation and you don't need them to be your friend, you are the landlord, it's a business relationship. Then systematically start doing a 8% increase every 6 months until you get caught up. You are running a business not a charity.

Another real life example...

At National Convention a few years ago my friend J said he was looking for the courage to raise rents. He inspired me.

We sent out 64 letters, some with increases as high as $150 on $650 rent. That makes it jump to $800.

Only one person with a $30 increase asked for $25.

All 64 stayed.

Your job as manager is make maximum profit for your business to cover the problems that appear - skippers, inspectors, furnaces, roofs...

Profitable LLs are able to provide nicer homes for their people. Without profit LLs get frumpy and frustrated.

More…

Renters EXPECT the rent to go up.

Over our empire I learned that under market rents does not keep people from moving. Life events, splits, marriage, illness, death of spouse or child, new jobs, bought an house, aging parents to help…are the reasons we lose renters. NOT market rent or increases.

We are increasing but keeping them "reasonable" as much as possible. Some of my clients didn't increase and now they are feeling the pinch since the taxes, utilities, insurance are now all rising and getting a little out of hand.

Most tenants are expecting them and most are ok with them. I had one this past year that really freaked and left which wasn't a bad thing as she was a pain anyway.

I had another one that just increased recently and he was stating "I hate these little nickel and dime increases" so I said "oh, ok... well then next year I'll raise you up one large increase and get it over with - but I can't promise that it won't continue to rise up". He immediately shut up and then said "so I heard what you got for the apartment downstairs... are you going to raise me to that amount?"

jonny made a great point. We must raise at least a little bit each year or turnaround and realize you need a big jump.