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Updated over 10 years ago,
Feeling bad, Older tenant, Under market value
I feel bad. One of my tenants is in her upper 60's, she works for a temp agency and has difficulty paying her bills. She is never late and hasn't missed a payment. She's been living in the building for six years. Her daughter lives with her, but her part-time work at Starbucks doesn't pay enough to make a great impact on paying the bills.
The oil tank that supplies this tenant's unit needs to be replaced. I'm looking at a cost of about $1500-2000 for that work.
The monthly rent is $925 for a nice two bedroom. It was raised from $900 last February. She is well below market rent. I am getting $1025 for the identical unit above her. The market rate for either of these units is about $1100.
I discussed raising the rent with her, she claims she cannot afford any more, maybe $25 she offered.
I feel bad. On the one hand my rental should be at the market rate, on the other hand, I have a nice tenant who cannot afford to pay the market rate, not for what she has currently. Do I raise the rent and force her out? Do I bite the bullet and keep her? What happens in 5 years when she can't find a job at all?