Question about lowering the rent

[Mary Jay]

Hi guys,

I have a question about the tenant who lives in one of my rentals in Phoenix. I told her I want a long term tenant because I dont want to change tenants every year or so... She was ok with that, but we did only one year lease. (I should of done a 2 year lease, I am an idiot!)

She moved into the house in April of 2023. In December she asked  to paint the inside of the house and change the flooring (Its not new, but its not in a bad condition).  So I told her I would be willing to do it gradually because its an expensive project. Plus I just spent 4K on the AC and did some other repairs (about 2 k total a couple of months ago)... her one year lease will end in the beginning of May, so couple of weeks ago she told me that I should lower the rent by $300 per month "to persuade her to stay" because she said the rents have softened. I showed her that 5bdr 3 baths in that area are 3.5K-5K and I am charging her 2.8k, which is much lower. There are 4bdr 2 baths in the area for 2.4-2.5k... I thought about it, and figured that if she moves out who knows what kind of condition the house will be in, I probably will end up putting money into it anyway, so probably will be cheaper for me to lower the rent. So, I told her I would lower the rent by $300 per month but we need to sign the lease quickly before my husband changes his mind (I did not specify the time frame.) She said ok.... Anyway, in my mind quickly=2-3 days. Its been almost 2 weeks. I asked her after week one if she received my lease and she said she did but she was busy. So I asked when will she be able to sign but she did not reply...

I could wait, but I am going out of country in 2 weeks (something has come up)_ and if she decides to move out while I am out of country I may not be able to communicate with her then. 

What do I do?

Do I say: "The 300$ discount will last till the end of the next week and if you dont sign the lease the rent will be without the discount?

or:

Do I say: "Sorry, Ive changed my mind and the discount does not apply", but then she will get upset and will move out and its financially better for me to keep her for at least one more year...

What would u do?

Thank you!

[Ned J.]

Market sets the rental price.... not tenants being persuaded to stay. 

I dont paint/change colors or replace flooring unless I decide they need to be done... not the tenant..... And 99% of the time that happens at tenant turnover...not 7 months into their lease

If the market "softens" then I may pause any increases, but I never drop the rental rate unless the market plummets. You are already on the low end, why drop it more?

IMHO you made a huge mistake in offering to drop the rate....let her leave and find a new tenant that will pay what the market rate is currently.