Tenant is a senior with a live-in son, they are getting a 2 bedroom for $655 plus electric we pay the rest. She has Social Security and part time job. He claims to be disabled, I don't know what's going on there.

Property insurance company raised rates almost $1000/yr in 2024, and property tax bills were hiked considerably on us also. We only have 5 units.

The typical annual rent raise to offset this is $20 but I am considering $30 on this one. Our other 2 bedroom is paying $735. They are getting way under market already.

Is $30 in one year too much?

Honestly I don't know what else to do. Literally no one is showing any mercy, and I'm not in this to go bankrupt. My mortgage insurance on my house was raised 50% on me this year, when I called the bank the loan officer woman quipped, "I understand your struggle, but its YOUR struggle. Thanks and goodbye." Talk about cold.

My own house payment was just raised $30/mo.

Dread the renovation if they move out over it, but wondering if other people are facing these sort of decisions.

The neighborhood is blue collar.... sketchy but decent..... you may think these rates are low anyway I have no idea.

I would think we are all facing these decisions.There's no easy solution, especially for many people. When I hear them complain about the rising prices I can't help but think "if only they had chosen something to do that had a higher wage structure or managed their money better".

I would think we are all facing these decisions.There's no easy solution, especially for many people. When I hear them complain about the rising prices I can't help but think "if only they had chosen something to do that had a higher wage structure or managed their money better".

I would think we are all facing these decisions.There's no easy solution, especially for many people. When I hear them complain about the rising prices I can't help but think "if only they had chosen something to do that had a higher wage structure or managed their money better".

$30 seems very reasonable. Just check with local laws to make sure it’s within increase limits.

"Property insurance company raised rates almost $1000/yr in 2024, and property tax bills were hiked considerably on us also"

$30

"Just check with local laws to make sure it’s within increase limits."

It sounds like you are Ok with subsidizing their lifestyle.

If not you send them a letter, that says the new rent is X

We appreciate you making your home with us. The decision to raise rents is not made lightly.

Your lease expires 7/1/24. The new lease is being sent via Dropbox Sign for your electronic signature. The lease terms and new rent are on page 1. If there are errors or questions, please call.

If you prefer to go month-to-month, the covenants, terms and conditions of the lease will remain the same, but the total monthly rental payments shall increase by 10%.

If you decide to move, please remember the lease requires 30 days Written notice. Notice may be given anytime during the month prior to your last desired full month of tenancy. For example, if you want August to be your final month, you must give notice anytime in July that August will be your final month. Last month’s rent is not pro-rated and must be paid in full.

Only a dollar a day. Very reasonable. I would increase $45.00 bringing the rent to $700.

Inflation is still eating our rent increases.

Had to replace an outside package unit this November, 6000 grand. 2 years ago $5500

You mentioned what you get for the other 2 bedroom, but is that one below market as well? You need to strive to keep your rents in line with what the market will bear.

I would be honest with her. Make sure she knows she is paying at least $80 below market and that your costs are going up faster than your traditional increases can cover. You are going to raise the rent $40 now and expect to have to raise it at least another $40 in six months. Make sure she knows you are telling her this as a courtesy in case she needs to seek some assistance or find a cheaper place to live.

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"Property insurance company raised rates almost $1000/yr in 2024, and property tax bills were hiked considerably on us also"

$30

"Just check with local laws to make sure it’s within increase limits."

Is there anything wrong with this picture? --73.108.xxx.xxx

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@6x6 [TN] you are -absolutely right-.

How is it that these huge national insurance companies can raise the rates to insure a house as much as they like, and county tax boards can raise taxes on it as much as they please.

But if you're providing the house for someone else? Why there's limits! Guvmt must watch that one and make sure its not excessive.

Talk about a double standard.

@Tim [CA] you are also absolutely right, at least from what I've learned from hard experience.

I tell them immediately at signing now rent will increase annually by a minimum percentage. That way there's no standoffs and drama. Because you WILL raise rent. So they may as well get used to it immediately.

At first I stupidly thought, "If they're a good renter, why raise their rent?"

Then I saw how it really works. How everyone else... the government, banks, insurance companies raise expenses on the landlord every year, and how they show no mercy at all. They're all in the background pushing for more money, and you're the front man getting all the hits and bad press because you're the only one they see.

I've heard its a waste of time to explain this to tenants but why not? I'll put that right in the letter and tell them exactly why its going up.

Because I want to that's why, lol

JP,

THIS is why you must raise rents EVERY YEAR. My guess is you have not raised the rent in a long time.

In my 46 years there are increases EVERY year without warning. These eat away at profit every year but often go unnoticed.

Then the LL gets upset when the resident makes demands or disrespects them. "I gave them a break on the rent for 5 years and now they treat me like THAT!."

Never operate out of fear of losing a resident.

Operate from facts and MATH. It is what it is.

If he cannot afford the rent he needs to find a place he can afford.

National survey showed only a tiny percent of existing residents will use a rent increase as an excuse to leave. I figure they were planning to leave anyway.

People HATE moving!

BTW His financial aid might be based on his rent.

Hmmm. Since the time of 45 when eggs were from .99 to 1.29 a dozen, now we have (under 46) eggs that are $3, $4 and $5 a dozen.

Why should the budget be balanced on the backs of landlords?

My rentals are in a similar area, blue/pink collar rustbelt with high taxes. I had to laugh as one of my younger tenants wanted to move after a $10 a month increase (my rentals are slightly below market but especially on this less desirable street). I immediately sent out a non renewal. Currently, out of the five units we have up and running, she and her two roommates are the most low performing.

All of a sudden her plans "fell through" because she did not have the move in funds to go to the new place and pay rent at my place and can they stay until June. They are M2M but I had them sign a new lease renewal reiterating the house rules.

It seems like $30 doesn't cover all the increases you are facing. Perhaps you need to give them the results on what HUD is saying they are paying. after seeing that they are getting such a bargain, they will be even more happy.

Sorry that you facing this thought process at all. It is called business though, you need to start running this hobby as a business and these are easy business decisions.

Step 1: $1000 / 12 = $85/month increase.

Step 2: How much did your taxes go up? Same formula, add to Step 1.

Step 3: How much did your mortgage insurance go up (in dollars)? Same formula, add to Step 1 & 2.

Step 4: How much did the real purchase value of the profit dollars you receive in rent decrease due to inflation (i.e. Govt debasing the currency)? Same formula, add to Steps 1, 2, & 3.

My guess is the total increase needs to be around $200 - $250 / month. If you're willing to do that, then I will believe this statement: "I'm not in this to go bankrupt."

Much of this should be laid at the feet of the federal govt, who always juices the economy to avoid a recession. It's so tempting to buy people's votes by giving them money at taxpayer expense. Both sides do it. It's not your fault unless you don't take action to deal with their shenanigans.

Be bold.

Are you ready for a new way to approach rent increases??

In my best-selling book "Build Real Estate Wealth: Enjoy the Journey of Rental Property Investment" I cover tenant management and retention in depth. You can find it on Amazon, but here's a synopsis of this technique.

First, I've been doing this over 46 years, and I have always raised rents on everybody every year so I don't get behind. But when the market got hot beginning with COVID, it became hard to determine how much of a rent increase to ask for because rents were moving up so rapidly.

SOLUTION: At renewal time, send the tenants a letter that incorporates the following points: 1) It's renewal time, but we don't know what to charge you because rents have been increasing so much. 2) Do your own research on what you will pay if you move to a similar apartment, and get back to me by (date) with the amount YOU want to pay if you stay here. 3) Our research says the rent should be $XXXX, and we have rented units similar to yours in the past few months(or you are aware of apartments that have rented recently) for $XXXX. 4) If your offer is acceptable, we will renew your lease. 5) We do not need to raise the rent for an existing tenant as much as we will if we rent your apartment to a new resident. 6) Remember that your lease requires you to give 30 days notice if you are not going to renew, so we need to work this out soon.

RESULT: Tenants will invariably offer to raise their rent more than you would have had the courage to ask them. I've had tenants routinely offer $100 to $150 increases. If you can't come to terms with them, REJOICE! You will now turn over the apartment to a new tenant with an even higher rent.

$30 at the least JP.

I don't usually raise that high, but had to this year. I usually give the tenants a line of explanation about what goes into the rent.