Best Methods to raise rent?

[Nathan Holt]

I just acquired my first property and will be needing to change the rent. The property is currently occupied for $695 a month, but as a 1,280 sq ft 3 bedroom 1 bath unit, all the comps in the area are at $950 for the lowest. I am looking to raise the rent to $900, I did hear on the Biggerpockets Daily podcast episode 509 method that sounded like a nice way to go about the process without disrupting the life of the tenant too much. The article by Mindy Jensen said to offer 3 options with different perks to them and letting the tenant pick to allow them to feel like the raise is much more mutual.

As of now this is the method I plan to go through with but I was wondering if anyone else had any methods they prefer or recommendations on how to go about the process?

Thanks!

https://open.spotify.com/episo...

[Nathan Gesner]

Quote from @Nathan Holt:

I disagree.

If a tenant is more than 15% below market, there's a good chance they won't be able to afford the increase to market level or they'll resent you bumping it so high. 

"...all the comps in the area are at $950 for the lowest."

You're already willing to give away the farm. If your property is worth $1,100 a month, why would you offer it to the renter for $900? You're going to pay a stranger $2,400 a year to avoid hurting his feelings? Does your renter get a 10% discount at the gas station because market prices would be too much? Does he buy his hamburger cheaper than you? 

I recommend you terminate the existing renter, spruce up the rental, and get a renter that's willing to pay you what it's worth. You don't need to be an a$$ in life, but you also don't need to supplement the living expenses of others. Run your business like a business. Give your charity to actual charities and help people truly in need.