Long term tenants

[Christine Swaidan]

We have a 70 unit senior building that we have owned for the last 20 years. These are all low income and about 20 have section 8 assistance. Rents are low. I would have to say we have not done a great job managing these units with regard to maintenance and keeping up with rent increases over the years but I am trying to change that fact the last 2 years.

For many, this is the last stop. They are comfortable here, the rent is low, and they are not ever going to move.

For the past year, when there is a turnover we go in and rehab and raise the rent. That means we have a few really nice units with some tenants paying more $$. The difference between existing and new tenants is $100-175. The rent is still on the low side but we are taking into account that these are low income and we want to maintain our no vacancy status. Cost of rehab is between $6-7ooo.

Besides increasing rents at turnovers, I went through and gave everyone a $20-25 rate increase who had been there at least 2 years without an increase.This was over half of the units.

Here’s my dilemma. One of the long term tenants got his first rent raise ($25) in 11 ½ years and now wants to address some issues in his apartment. He wants a new toilet which I have okayed because he had a 3 ½ GPF. There is a small wrinkle in his carpet on the far side of his bed that I will ask the carpet guy to stretch. The carpet was new when he moved in (and very cheap!) and surprisingly still looks decent.But he would like us to replace the kitchen linoleum which was peel and stick and also paint the kitchen walls.He’s a very clean person and there are just some cooking splatters that are not cleanable. Honestly, I would not have a problem doing all the work—great tenant. I’m just afraid this is opening up a can of worms. We have sixty more tenants that will probably want similar upgrades. I asked him if he would want to move to a refurbished unit (and pay the going rate) but he says he likes his location.

Just when I think we’re going to start socking away a ton of money I see the dollars flying out the window.I know we are lucky to have the long term tenants. How do I keep them happy without going broke?