How to best catch up on rent?

[Harris L.]

I have a 3/2 condo that I'm renting out for $1460, the current zillow estimate to rent the property is at $1880. Other comparable rents in the area by looking at craigslist is beyond $2k some of the 2/2 is at $2k level two this is in the SF Bay Area in concord, ca near the Bart station. The past 3 years i have the same tenant and I only raised my rent by $70 I know I should have raised more. I guess I'm too nice. I'm thinking what is the best approach to catch up on my rental rates. Does this look outrageous? If I give the tenant these 4 options? 1. 12% increase if the tenant stays on month to month 2. 11% increase if the tenant stays on a 6 month lease 3. 8% increase if the tenant signs a 1 year lease 4. 30 days notice to vacate? I read this style from one of the forum threads. I have an agent that looks for tenant for me for 5% commission on new leases on total lease amount, renewals like this he doesn't get anything I manage the property myself.

[Kevin Harrison]

If it were me I would go mid way between what they are paying now and FMV when its time to renew the lease. Either they will take it and now you are getting closer to the rents you want or they will balk and walk away, in which case you re-rent it at FMV. Either way you win.

As a side note if they stay just come up with a plan of increases to follow to get you to FMV rents in 2-3 years, don't kill them all at one time if they are a good long term tenant.