I’ve had a tenant for 7 years, they have never been late on a payment (including during Covid bs), they have maintained the property well.
I don’t feel like raising the rent as I value good tenants.
How do you decide if and when to raise?
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We were model tenants and paid our rent on time every single month, maintained the property and had very few maintenance requests. Our landlord increased our rent by almost $300 per month (almost 8%) after the first year and we completely lost any sort of goodwill and moving ASAP.
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$300? Wow that sounds ridiculous. I would feel the same if I were you.
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Yeah he definitely got greedy. He told us less than a week before lease renewal that either we pay $300 or he wouldn’t sign the lease renewal and would sell the house instead because he thought he could get 1.5mil for it (no way that was going to happen). We had no time to react/search for a new place so we begrudgingly agreed.
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You got scammed. If rent is to change, they typically have to send written document informing you so. They can’t just change it a week ahead of time. Same applies to non-renewal. You wouldn’t be left hanging - it was a smoke screen.
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My in-laws kept the rent the same for their tenants of nearly 10 years. It’s better to keep happy (responsible, pays-on-time, keeps the property like an owner would) tenants than a few extra bucks.
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Yes, in my over 30 years of landlording there were some tenants I simply never raised their rents one cent. Some were with me for over 10 years. All were great tenants who paid on time, or early even, and kept the place in great shape. One was a handyman, so that is obvious as to why no rent increase.
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I do raise the rent as some expenses go up such as taxes. But minimally and over time the rent becomes well below market. A reliable tenant is a joy.
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That’s what I do, too. In the end, the taxes being paid benefit them directly. I’ve been doing very small rent increases every renewal, trying to keep the rent affordable for the tenants. I am fully aware I could be raising the rent by a lot more (based on market), but I’d rather keep good tenants who take care of the property as if it were theirs. Is a win-win situation.
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I made the mistake of not raising rents at all on a very good tenant for many years. The sticker shock of a mere proposed adjustment later on gave them the impetus to move out. These days I definitely don’t keep rents at market rate but I do impose small adjustments year to year in an effort to somewhat keep pace. Good tenants understand that costs for repairs and maintenance, taxes, etc. also rise over time so small increases to cover those costs are necessary.
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The increase of property taxes and insurance premiums force me to raise rents, or I would be left with less and less money in times of elevated inflation.
Yet, I would keep it to a minimum for good tenants. Turnover is costly too btw!
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I use to not raise the rent on existing tenants. But 2 things recently changed for me.
High inflation. This has caused my insurance, taxes and repair costs dramatically higher.
My local government implemented rent control.
So combining the high inflation, with the inability to raise rent only when I absolutely need to has forced me to raise rent each year to the maximum allowed by the rent control law.
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When costs (property tax, insurance, HOA, maintenance) go up, it makes sense to raise the rent to offset the costs. With good tenants, a reasonable rent increase is justified just to keep up. If not, you’ll be eating the difference.
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I always raise by my cost increases if the market will support it (ie tax increase, insurance increase).
But I never raise my margin on good renewing tenants.
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I only have one rental unit, but I’ve ended up with great tenants and I don’t raise the rent until someone leaves and I put it on the market again.