Just thought I would get some real advice on an issue that is coming up soon.
I have rental properties. My tenants have been in the properties for 6 and 8 years, pay on time and really take care of the property as if it were their own. I really like them and do not want to lose them.
I have not raised the rent since Katrina, August 2005, but insurance rates and property taxes have nearly doubled in the aftermath and I continue to pay for the alarm monitoring for both houses.
Each tenant pays $1,200 per month for a 3 bedroom, 2 bath house and both are in great family neighborhoods in one of the most prestigious and sought after areas. I am thinking of asking them to pay for the alarm monitoring, $40/month. I am also thinking of raising the rent to overcome the cost of insurance and tax rate increases. However, both are young families and I suspect that every dollar counts. The young husbands are well paid professionals and the young wives are full time moms. (I don't know how I found such great tenants!)
What do you think would be a fair increase, if any at all? Any realtors out there? Is $200/month too much of a jump?
Thanks,
Iris
Without a neighborhood comparable rental market analysis, it's impossible to make a good judgement call from a distance with the information given. Good luck.
* This post was
edited 07/05/08 07:28pm by Skid Row Joe *
....if you like and appreciate them, and they are ideal renters, why not have a sit down with them. Explain the numbers, be fair and honest.....perhaps you'll both come away happy.
Mandrake
he ain't heavy..........he's my brother....
I am a renter and I have never, ever had my rent increased more than 25.00 with a 1 year lease......If I CHOSE not to sign a lease for 1 year, my rent increase was 200.00 at an apartment complex and 100 at a house I rented and 150.00 at a mobilehome I lived in. I always signed the 1 year lease.
I do think they should be paying for alarm service.
We have rentals. We rent duplexes for less $$ than yours. When we increase rents (very infrequently) because of the same reasons you give, we raise $25/month. Raising $200 a month is way too much in my book to expect tenants to pay. They will probably be looking elsewhere. Perhaps you should institute a yearly increase, say $30 a month this year, then next year raise again, etc. When I do raise rates, I send a letter and outline why we are raising rates. We continually make improvements on our buildings and the tenants can see we are spending money to make them nicer to live in, i.e., new windows, roofs, garage doors, etc. No one has even voiced a complaint.
It's always a tough call, but it is better to increase a little at a time rather than wait and raise dramatically all at once. I would not "discuss" rental increases with them as far as asking for input. They are yours and the deal is that you have them to provide income. This is a decision you must make. If a tenant then comes to you and says they cannot afford it, you can then discuss if you feel a need to.
Dale
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Paying for alarm monitoring for your tenants is very nice since the alrm really is there to protect contents that the tenant owns.
I would give the tenant the choice of continuing the alarm service at their expense or they can choose to not have alarm service.
Steve
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I guess I should have raised the rent over the last 3 years, but with everything that has happened since Katrina, I wanted to give everyone some time to recoup. Believe me, there is nothing to rent around here for $1,200 a month except a 2 BR apartment in a huge complex. Not a great place for kids, no fenced yards or sidewalks and too much traffic for bikes.
I am going to ask them to pay for the alarm service and forget about a rent increase for now. I do have other income and a very soft spot for young couples trying to raise little kids and I love the fact that they are stay at home moms. I want happy little families in my houses.
Oh, I couldn't sleep at night if they didn't have the alarm service! I would be worried sick about the babies and a fire or a toddler escaping from the front door (they sound an alarm when opened) or a burglar. Thanks, but the alarm is really for all of us - like the carbon monoxide detectors. If they can not afford it, I will just suck it up another year.
StanleyandIris wrote: I guess I should have raised the rent over the last 3 years, but with everything that has happened since Katrina, I wanted to give everyone some time to recoup. Believe me, there is nothing to rent around here for $1,200 a month except a 2 BR apartment in a huge complex. Not a great place for kids, no fenced yards or sidewalks and too much traffic for bikes.
I am going to ask them to pay for the alarm service and forget about a rent increase for now. I do have other income and a very soft spot for young couples trying to raise little kids and I love the fact that they are stay at home moms. I want happy little families in my houses.
Thanks for the perspective.
Raising the rent becomes an issue when you are at the top of your market, and, when you are selling them. We built, managed and three decades later, sold a couple "small" apartment buildings in Omaha, NE. Unless you are on top of the market in price, you have nothing to worry about until you try to sell them....then it becomes impossible to sell them to an investor anywhere near market value. Your posts sound like you are below market rent pricing. Worth taking a closer look at for any owner/operator.
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