I only have 5 units in total, but just in the past year the property taxes have more than doubled on one location, gone up on the other, and property insurance has also gone up inexplicably..... I tried shopping around and everyone else is even higher. This is not even taking into account rising costs for maintenance supplies and groceries, etc. Everything is costing more.

I not only am going backwards I need to be saving up for big ticket items: A new garage roof, one of the buildings needs painted, trees need taken out (this costs thousands). It sucks.

How much are people raising rents annually? I've found out doing this that raising rents isn't an option, its required if you don't want to fold. I have decent tenants at the moment and don't want to lose them, but its looking like 3% is not going to work to break even, its making me think its even foolish.

My tenants all have under market but I don't look forward to all the work and expense renovating after they leave either. What rate are you doing and what is your State

First thing you need to do is determine what the market rent is for each place. This is for a two fold reason, first, if you end up with a vacancy in raising the rent you know what rent you can get when you refill. Second, and more importantly, you don't want to raise rent above this amount. That will incentivize the tenants to leave, contrary to what you are trying to do.

Once you know how much under market you are then you can determine your increase strategy whether it be one increase or multiple over a few months.

I don't know how much you paid for your properties, but this would be a good time to look at what your properties are worth and calculate what kind of return you're getting. Then consider whether there are other investments that bring a better return with less headache.

I did this recently and decided that if my tenants objected to their rent raises and moved, I'd just sell.

What kind of properties do you have and what's the market rate. I look at zillow and apartments to see what everyone else is charging and I look at what the apartment complexes are charging. Find the sweet spot for your area.

If a 2/1 is going for $800 and yours are $600, then raise the rent $50-60 each year until you are at market rate.

I have a friend who has 4 - 2/1 homes and moans about how he needs money. He has long term tenants who do a great job taking care of his properties and doesn't want to rock the boat. I told him he could get $10,000 more in rent in 4 years. He still did not listen to me. I also told him to go to the convention and says he can't afford it.

What's the worse that can happen? The tenant leaves and you go straight to market rate at $800. Win win win.

4 units x $600 x 12 = $28,800 current rents so raise the rent $50

4 units x $650 x 12 = $31,200

4 units x $700 x 12 = $33,600

4 units x $750 x 12 = $36,000

4 units x $800 x 12 = $38,400

at the end of the 4th year you have $10,000 more cash flow

If you had been at the convention you'd heard Brad 20,000 and other speakers talk about other ways to raise your cash flow.

Animal fees and rent bring in an extra $5700 a year in my business.

Lease initiation fee $75

Lease change fee $400

animal fees $150 per animal

monthly animal rent $25-$50 per pet per month

charging for appliances $35 per appliance per month

Think outside your experience and do something different.

I thought a lease initial fee was stupid. Since I've been doing it nobody has said anything about it.

You have to take care of your family and being profitable allows you to do that and provide housing for others.

Don't anguish about it - just do it.

Bonanza nailed it!

My thoughts on your predicament are similar but I have a few extras.

This is not meant to offend, that isn't my style.

When you bought these places did you do any advanced math? By that I mean worse case scenarios. Almost anybody can buy a place and put a rent sign out.

I admit that I do not do my due diligence as well as I should, but I try and prepare for at least a few bad things to happen.

Maybe you grew too fast? Look at all five places. See which one is the bottom of the pile as far as providing for you. Run some numbers on it. Would it be better for you in the long run to sell it?

I am not saying just sell everything as some here do. I am suggesting that you might need to scale back a bit.

Start over. Sell a place, make a little money on it and use that as your buffer. Then reconfigure how you are doing things to see if you can do them better for your goals.

I also know a lot of people spew stuff about getting some training. The recent convention would have been great for you. Even if it was just to talk to some of the people that have been thru the same thing.

I am not getting a commission on this but maybe you should consider the bootcamp. I am going this year. First time. Taking the boss as well and both are looking forward to it.

You keep hitting these road blocks. You need to figure out how to better prepare. I am not the one to teach this as I wing it a lot myself.

As already stated, check out the pricing of your competition. I disagree with one poster who said "If a 2/1 is going for $800 and yours are $600, then raise the rent $50-60 each year until you are at market rate." If you only raise by $50 - $60, you'll never catch up.

Years ago, like you, I didn't increase my rents much. I can tell you from experience that if you aren't aggressive with your rent increases, you'll never catch up. I have one property that has had 3 rent increases in the last five years that were $100/month or more. They're still in the property.

Duplexer,

It is what it is. If the rents don't cover the bills you MUST raise them now, not in little bits.

I raised several by $150 and not a single person left.

Managing means making the tough decisions, now.

Lots of LLs "think" they are at market rents but need to do more research.

At Convention I taught how to add $2000 income per door by giving people what they want.

Don't be afraid to charge for your service.

Duplexer,

It is what it is. If the rents don't cover the bills you MUST raise them now, not in little bits.

I raised several by $150 and not a single person left.

Managing means making the tough decisions, now.

Lots of LLs "think" they are at market rents but need to do more research.

At Convention I taught how to add $2000 income per door by giving people what they want.

Don't be afraid to charge for your service.

You MUST raise your rents and don't forget your DEPOSITS must increase along with the rent. Having a hefty deposit incentivizes your tenants to cooperate and work with you - make sure you hold enough they don't want to give it up to damages or unpaid rent.

I raised all my rents in 2022 and 2023. Some went up as much as $100, others were set to high market when someone moved out. Remember new tenants coming in qualify for your NEW rent so no worries on them affording it.

WMH you touched on something I have yet to do.

Increase my deposits.

I need to make that a priority for this year. I raise rents but you are absolutely right that if I don't increase the deposits as well some of the tenants will not have enough in there to cover anything. Especially since I have some long lasting tenants.

Zero, even the M2M tenants have gotten raised deposits. I just sent out notices this week to two tenants who got lost in the shuffle during the big panic, and ended up M2M. Paying nicely without issue for a couple of years now but...

One I've given forever to pay their raised deposit and they are still not there, so I just raised their rent a lot and reduced the deposit due to 1.5x the rent (legal limit for M2M in NC) leaving them with a big rent but owing only $15 on their deposit.