Raising the rent in an apartment building

[Maria Wilson]

I own and manage a 33 unit building.  I am planning to raise the rent.  What incentive do you give to have residents sign another 12 month lease instead of switching to month to month?  The last time I raised the rent, it was a 1.5% increase with a 12  month lease and a 3% increase with m2m.  Following that same formula again seems unfair to the ones who already had a 3% increase (3% on top of 3%.)  The 1.5% increase keeps the rate at market value.  Suggestions?

[David Gotsill]

Same advice as above, only that we're recently upping our MTM premium to $150 in some cases, and with notice that even that is limited.  For example, we'll say we're willing to go MTM at +$150 per month for 5 months, but will revisit after 5 months.

I think the driving factor here is not "what is the standard MTM premium in the market?", but rather "how far under market are current rents?"  If your rents are substantially under market, then reach for the moon.  In such a case, a +$150 or +$100 might still be a steal for the tenant.  If you're essentially at market rents already, then maybe $50 is all the tenant will bite, and it's merely a $50 fee for convenience.