Long term tenants

[Christine Swaidan]

I appreciate the fact that these tenants have stayed for 14 years. In recent years we have painted, replaced flooring, remodeled bathrooms (tile, granite, cast-iron tubs) , new appliances, new granite in kitchen.  They always pay on time and I always react in a timely way to any repair issues.  It's not their fault that we have not raised the rent closer to market values. If they were to move I understand that I would need to do some work (replace windows and scrape ceilings mostly).

I just raised the rent $200 to $2200. I believe the market rent as is, is $2600 and if the upgrades are done it would be $2800-2900. (Southern California, end of cul de sac, ocean view, open space behind house, 4+2, single story, even though this is a 1970's tract house.)

My plans are to raise the rent by $200 a month next year but I am still uncomfortable that this is a slow process to get them closer to market rate.  I'd like to hurry this process along but I feel like a jerk if I raise the rent too fast and a shmuck if I let it go another year.

Do I owe them something for being long term tenants? Do I owe myself a raise for being an attentive landlord?

[Nicole A.]

Just to be sure I understand, you already have raised the rent by $200, and you would like to raise it another $200 next year, right?

How did the tenants react to the first rent raise? How is your relationship with them? By now, you probably know them at least a bit and have a good feeling if they'd move or not over another $200...especially when it'd still be a great deal. I think you could run you plans by them now, well before the rent raise. Explain to them (and even show them) comparable rentals and how much more they cost even after your rent raise. They can see the numbers for themselves. If they move, wish them well. It sounds like a nice place that you won't have trouble renting out. And don't go too crazy on fixing it up if it does become vacant because it sounds like it's already in pretty great shape. Sometimes landlords put too much money into their rentals.