Jeff said…
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Jeff said… (by Sean [MA]) Feb 27, 2024 9:38 PM
       Jeff said… (by BRAD 20,000 [IN]) Feb 27, 2024 10:41 PM
       Jeff said… (by Sean [OR]) Feb 27, 2024 11:18 PM
       Jeff said… (by zero [IN]) Feb 28, 2024 8:12 AM
       Jeff said… (by Ray-N-Pa [PA]) Feb 28, 2024 8:36 AM
       Jeff said… (by S i d [MO]) Feb 28, 2024 10:09 AM
       Jeff said… (by Sisco [MO]) Feb 28, 2024 10:29 AM
       Jeff said… (by Sean [MA]) Feb 28, 2024 12:35 PM

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Jeff said… (by Sean [MA]) Posted on: Feb 27, 2024 9:38 PM
Message:

Jeff said rents have went up $500 per month on average since 2020 nationwide. After hearing this at the Retreat in the DR last month I was eager to go home and check if we have been keeping up, which I admit has not been very easy. Every time I think we are near my perceived market rate for our area, rents have moved even higher. All and all we have done a pretty good job, though…but are still leaving a good amount on the table. Well, enough is enough. This year we are making a hard push across the board to get all of them as near market as possible. QUESTION: how would you do it? Would you go straight across the board increases at the same time? Stagger them? My concern is our aggressiveness will push many out (although where would they go?) and we would have 10, 20+ vacancies, or even worse, many staying put but not paying. Then having to evict them which, in MA, could be at a minimum 6 months. So, we staggered them. First group (maybe a little more then half of the tenants) is set to be increased on our customary April 1st date and at the same time all others have been put in a month to month lease with no increase yet. If everything goes ok, we will hit all the remaining in May. Although we have been making pushes to stay on top of rents every year, this will be, by far, our biggest push thus far. It could be transformative, hopefully not in a counterproductive way. --172.56.xxx.xxx




Jeff said… (by BRAD 20,000 [IN]) Posted on: Feb 27, 2024 10:41 PM
Message:

Sean,

"Fear not" is often repeated in the Bible. Take a deep breath and raise the rents. Your residents know local rents so it's no surprise to them.

At Convention a few years ago my friend J brought up COURAGE to raise rents. That inspired me.

We raised rents from $50-$150 each to 64 leases that month. Only one person complained so I knocked $5 off his increase.

NO ONE LEFT.

We send increase letters 30 days before their leases automatically renew.

My lease is clear: This lease autoatically renews each year with a minimum 2.9% Cost of Living increase.

I use Jeffrey's approach. My letter says "if you fell you cannot afford this please tell the office what you can afford." We highlight that cluase in bright yellow.

Of the last 50 increase letters only one asked for a discount. I discounted $4 and they thanked me.

Add up how much extra this will bring in. My first letters increase my income by $3300 per month.

Your first set of letters will be stressful but when the new rents come in without complaints it's time to take your special someone to dinner!

BRAD --73.103.xxx.xxx




Jeff said… (by Sean [OR]) Posted on: Feb 27, 2024 11:18 PM
Message:

$4 discount and they said thanks? that won't buy a cup of coffee. --208.127.xxx.xxx




Jeff said… (by zero [IN]) Posted on: Feb 28, 2024 8:12 AM
Message:

On my first round of increases I was worried as well.

Then I listened and considered the why's of it all.

Why was I renting so much below market? Because I was lazy. I only increased rents when between tenants. Then the tenants started staying longer because there was no way to get the same quality for the same price.

Remember that rents in my area are lower than the big city guys.

I started with the 3% as a minimum increase. All were a little higher than that to begin with. All get an increase no matter what.

Thought I was getting close to market rents and then started seeing places near me that are way higher. Some of those are being marketed to niche renters like travelling nurses. But the rest of the nice places are still creeping up more than the COL.

I bumped everyone who had been with us a year or more. The rest got increases at the one year mark. Leases state automatic 3% increase with notice given if it will be more. I still send notices to them all as a reminder.

Good luck on getting current. --107.147.xx.xx




Jeff said… (by Ray-N-Pa [PA]) Posted on: Feb 28, 2024 8:36 AM
Message:

I try to stagger my renewals and schedule them so that they don't renew during the slowest, hardest months to get a place filled. Around here, I try to keep them full especially between December and mid Feb.

So I send out rent increases in January for the end of February, and slow down on the increases at the end of Oct for the December and January periods.

So during the busier months I might send out three increase notices and maybe only one during the slow periods. This allows me to hedge my bets on the renewals.

My lease has a large space for rental amount so I draw a line and split in half. I then write year one rent - say $1,000 and on the lower half, year two - $1,025. My notice doesn't have to be super formal either. A quick text saying in accordance with the lease, the new rental rate is now $1,025 to keep up with the inflation rate. Please ensure that extra $25 is included in your clear now payment. I then change the rental amount on ClearNow. --24.101.xxx.xxx




Jeff said… (by S i d [MO]) Posted on: Feb 28, 2024 10:09 AM
Message:

Staggered raises are good, done at least renewal time. Most likely your tenants are scratching their heads wondering why they haven't seen market rate increases yet.

Every other business increases their prices. We should too!

If all else fails, bump them to $50 below market. As you said, the only choice they have is to downgrade, and most people like what they have and will not willingly part with a better, roomier, well-located unit for something of a lesser status, even if it does mean they'd save a few $$$. I mean, we could all choose to live in 1 bedroom apartments to save $$$, but... why?

--70.57.xx.xxx




Jeff said… (by Sisco [MO]) Posted on: Feb 28, 2024 10:29 AM
Message:

Sean wrote: My concern is our aggressiveness will push many out (although where would they go?) and we would have 10, 20+ vacancies, or even worse, many staying put but not paying. Then having to evict them which, in MA, could be at a minimum 6 months. So, we staggered them.

Your worries are unfounded for reasons of rent increases. Control your thoughts.

If your tenants were going to stop paying rent and wait for eviction, they would have done so no matter rent amount.

Moving is a lot of work and costs money, staying is less work and less expensive. Your tenants will stay, a few will go whether you raise rent to market price or continue to take less than market. --149.76.xxx.x




Jeff said… (by Sean [MA]) Posted on: Feb 28, 2024 12:35 PM
Message:

We had the 3% annual increase clause in all our Leases, but had to pull the 3% part out due to that not being able to keep up during the last few years…good problem to have, for sure. Typically, we increase all our leases in April, not including section 8 which will be increased on their respective anniversary. But we have never went up the amount we had. Hence staggering them for a self preservation standpoint. Feedback has already started coming in and it seems as though we will most likely be increasing all others for May 1st…it’s a beautiful thing…and make no mistake about it, Brad, dinner will be had! Thanks for all the feedback! --172.56.xxx.xxx



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