Displacing Good Tenants if I Sell

[Brenda Whittaker]

Since out of state investors have infected my area and forced up property tax I can no longer afford to keep my rental.  The tenants are very decent hard working great people who love the house but cannot, like most hard working middle class, afford to buy their own home due to unreasonable increasing values.  They have been there nearly 10 years.  The rent is below market value but I cant just raise it hundred of dollars on them, I do not want to create hardship for my tenants.  Does anyone have any ideas on how to create a WIN WIN for both myself and the tenants?  Something contractual?  Financial advice?  I am being forced to sell because out of state investors discovered the area and destroyed the affordability, leaving myself and the tenants in very bad positions.  A financial advisor specializing in real estate would help, if anyone out there does that. I'm horrified to be faced with this but my taxes DOUBLED in one year!!  Having much trouble dealing with inflated markets and the frenzy around real estate that is ruining the business.  Any ideas would be very much appreciated.

[John Chapman]

@Brenda Whittaker, you really have two options:  (1) sell; or (2) raise the rent. It's kind of a good problem to have in that it sounds like your house has significantly increased in value.   (Higher property taxes generally correlate with higher property values).  It also sounds like landlording might not be for you if you are so far below market in terms of rent that you cannot afford the home and cannot bring yourself to raise the rent.  Moreover, it sounds like you are empathizing way too much with your tenants; this is a business that should be handled with dignity and compassion but at the end of the day, it's still a business.  Given everything you say above, I would probably opt to sell.  I'd call your tenants (don't just send a written notice), and explain the situation.  If you're kind of on the fence, tell them that the rent needs to go up however much just for you to hang on.  Tenants know when they are getting a phenomenal deal  and often (in my experience) will just eat the increase because they know there's nowhere else to go as cheap.  At the end of the day, this isn't that big of a deal.  Just some perspective.