Rapidly rising rents

[Ryan Heywood]

I have a tenant coming up on the end of their first year, and am having a little difficulty on setting their renewal increase. We leased to them after doing a complete remodel and market was $995 last year. In that time rent had go up 40%, we just leased a comp for $1399. 

My management wants to go up to $1200, but I’m used to increases being more along the lines of 5-10%. They are good tenants, and the are is not great but the unit is new and clean. 

This is in Phoenix

[JD Martin]

My first question would be "What makes them good tenants?" Then I would go from there. Over time I've come up with an internal barometer scale for tenants:

Great tenants: pay rent early every time, virtually no service calls and great flexibility when there is a service call, keep the house neat and clean all the time, have great communication, keep me in the loop on anything that matters/might matter to me (neighborhood, things that appear to be deteriorating on the house, etc), stay more than 1 year, leave the place so nice turnover effort & cost is virtually nothing.

Good tenants: pay rent on time, keep the house reasonably presentable, minimal service calls, stay for at least a year, turnover cost and time is not excessive - usually just cleaning, replacing a couple of blinds, etc.

Satisfactory tenants: pay rent on time but sometimes needs prompting, house is sloppy and full of too much furniture but not damaging anything, occasional BS service calls, occasional stupid complaints, not ideal turnover but not ridiculous damages. (Sad that this is today's baseline).

Unsatisfactory tenants: pay rent but needs prompting and is sometimes late, doesn't keep the house neat, fairly regular BS service calls, complainers, causes occasional trouble with neighbors, generally reflects poorly on our business.

GTFOO my house tenants: non-pays or only partial pays, nothing but excuses, abuses the property, causes trouble with neighbors, live like filthy slobs.