Rent increase

[Anonymous]

we have a tenant who has rented out a townhouse for the last 6 years, he is a great tenant, pays on time, takes care of the place, and unless some big issues do not bother us.
This area has gone up significantly in rent, new townhomes rent around 30% more, I am wondering if we should continue renting at the lower rent or put it back out on the market

[Anonymous]

Well, if you put it on the market you may have it sit empty for several months. Will it still be worth it? You may get tenants who don't take such good care and there'll be more wear and tear on the place. Will that be worth it? You may get a tenant who you're always chasing for rent. Will that be worth it?

You have to decide what having the current tenant is worth. Maybe you increase the rent, but only 6% or something.

[Anonymous]

Anonymous wrote:we have a tenant who has rented out a townhouse for the last 6 years, he is a great tenant, pays on time, takes care of the place, and unless some big issues do not bother us.
This area has gone up significantly in rent, new townhomes rent around 30% more, I am wondering if we should continue renting at the lower rent or put it back out on the market

Depends. Do you really want to find a replacement for a good tenant? We usually only raise the rent between tenants. If the cost of turning over the place/lost rent/uncertainty of new tenant is higher than the rent increase, then I suggest not doing so. If it's really, really underpriced, consider some modest increases, knowing though that he could leave. I'd probably frame it as offsetting major expenses that you have (if you do). Anyways, that's the thought of one landlord to another. If you have a great tenant, it's worth it in my opinion to keep them.

[Anonymous]

As a landlord I get wanting to keep good tenants, but I wouldn’t think a small increase in rent- 3% to 5% - would be too much that the tenants would leave, especially knowing that anything else they find in the open market will cost them 30% more than what they are paying - that’s still a great deal for them. You don’t want to lose money to inflation and rising property taxes.

[Anonymous]

Anonymous wrote:

Anonymous wrote:we have a tenant who has rented out a townhouse for the last 6 years, he is a great tenant, pays on time, takes care of the place, and unless some big issues do not bother us.
This area has gone up significantly in rent, new townhomes rent around 30% more, I am wondering if we should continue renting at the lower rent or put it back out on the market

Depends. Do you really want to find a replacement for a good tenant? We usually only raise the rent between tenants. If the cost of turning over the place/lost rent/uncertainty of new tenant is higher than the rent increase, then I suggest not doing so. If it's really, really underpriced, consider some modest increases, knowing though that he could leave. I'd probably frame it as offsetting major expenses that you have (if you do). Anyways, that's the thought of one landlord to another. If you have a great tenant, it's worth it in my opinion to keep them.

+2 I had a tenant for 10 years in a rental I own. The tenant was low key, didn't reach out unless there was a major issue, which we fixed right away. The tenant left the area, but we still talk about how great it was they were there so long and it was minimal work for us. I didn't increase the rent any more than $50 every 2-3 years. It costs a lot more to get a tenant moved out, clean and paint, then show the unit to prospective tenants while the unit sits empty.

[Anonymous]

Are you losing money or making money? As others have said, replacing good tenants is not always easy.

[Anonymous]

I’m like your tenant. Our landlord raised rent $800 to keep up with market rates. We couldn’t afford it so we left. It sucked because we couldn’t find another rental to be zoned for the same elementary school so our kids had to switch schools. We live in south Arlington and been in the same house for 8 years.

Our landlord showed the property and had about 15 applications for $800+ the day it went up. And like I said, we weren’t in a primo location.

Just do it and I honestly bet you’ll be fine.

[Anonymous]

I think your tenant is probably wondering why at this point you haven't raised it at all - so I doubt they'll be surprised if/when you do. That said be reasonable with the increase. If the rent is currently $3000 a month, raise it to $3200 a month for example, not $3500+.
And also explain to them that your property taxes and carrying costs have gone up quite a bit, and that you appreciate how much they take care of your property.

[Anonymous]

You don’t run a charity. Raise rent to at least market rate. Have you even been in the house in the past few years? They probably trashed it thinking you don’t care. Higher rent means higher caliber renters. Kick out the free loader.

[Anonymous]

I had a similar situation and I pretty much knew my tenants could not make that big of a rent jump easily. I spoke to them about it.
I said that I have to raise rent, but will only go up 1/2 increase of what the market was.
They had several months left on lease to think about and to look around (which I was fine with).
They found out that they could not rent anything comparable at the rent I was offering them and then asked for a 2 year lease with the 1/2 increase. I approved it.
They are happy, and I kept a good tenant without having to mess with relisting, repainting, showing the place, running new credit, checking references, etc.and having a happy, stable tenant I trust.
Consider this instead of the idiot posting above me.

[Anonymous]

I'd raise it but to just below market rent to give him an incentive to still stay there. For reference, my spouse has a rental in another city with a long term tenant he has never raised the rent on. With the cost of taxes and other maintenance rising substantially over the years, I don't think he's cash flow positive on it anymore- wish he'd sell it.

[Anonymous]

Your tenant probably thinks you're a sucker. They've probably been getting pay increases at work, especially this past year, and see rents increasing around them, and yet you keep the rent the same. They're probably grateful to have such a clueless landlord.

[Anonymous]

Anonymous wrote:As a landlord I get wanting to keep good tenants, but I wouldn’t think a small increase in rent- 3% to 5% - would be too much that the tenants would leave, especially knowing that anything else they find in the open market will cost them 30% more than what they are paying - that’s still a great deal for them. You don’t want to lose money to inflation and rising property taxes.

+1

With the increase in taxes, insurance, repair and maintenance rental rates increase by 5% is reasonable.

[Anonymous]

Anonymous wrote:Your tenant probably thinks you're a sucker. They've probably been getting pay increases at work, especially this past year, and see rents increasing around them, and yet you keep the rent the same. They're probably grateful to have such a clueless landlord.

Hey troll, go phoque yourself.

For others, if you are older (and you don't have to be to appreciate), sometimes you come to the understanding that $300, $400 isn't going to change your standard of living at all.

But it may change the quality of life for some young professionals that have taking very good care of your paid off townhouse that you don't particularly want to have to manage now.

Win-win.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Your tenant probably thinks you're a sucker. They've probably been getting pay increases at work, especially this past year, and see rents increasing around them, and yet you keep the rent the same. They're probably grateful to have such a clueless landlord.

Hey troll, go phoque yourself.

For others, if you are older (and you don't have to be to appreciate), sometimes you come to the understanding that $300, $400 isn't going to change your standard of living at all.

But it may change the quality of life for some young professionals that have taking very good care of your paid off townhouse that you don't particularly want to have to manage now.

Win-win.

OP, you're being taken for a ride by someone immature like this. How about this -- if the tenant balks at the rent increase, tell them you're happy to look at their most recent paystub to help make a determination as to whether a rent increase is appropriate.