San Antonio, TX · Member since 2016 · 9 posts · 1 vote
Hello. First time caller, long time listener.
What are some good practices for increasing the rent on a rental I own? I inherited the property a few months ago with the renters settled in, and now the lease is up and they are month-to-month. The property is 200 miles away, so keeping it up is a bit of a hassle with the driving back and forth. The property taxes have increased noticeably since last year.
Honestly, I'd like to sell the place but the inhabitants are not the best at keeping the property presentable - and are not responding to my calls.
Investor · Boyd, TX · Member since 2014 · 688 posts · 467 votes
9y
Originally posted by :
. Thanks. Should I provide a print out from the county appraisal site?
There is no reason you need to "prove" to them that the taxes are higher. You are the landlord and can set the rent to whatever you want. Giving them valid reasons is a courtesy but you don't have to try to prove it.
Real Estate Investor · Williamson County, TX · Member since 2011 · 1k+ posts · 961 votes
9y
It seems All the apartment leases and some houses are stating in their leases that rents go up every year at renewal...my daughter signed a lease that said 10% increase at renewal. If you want to justify a rent increase use the higher property tax and increases in the market rate of rent in your notice...and do charge on the higher end of market if they are not maintaining your property.
Investor · Boyd, TX · Member since 2014 · 688 posts · 467 votes
9y
Give or send them a 30 day notice of the new rent amount. If sent I think I would do certified mail. Then if they decide to move fix the place up and sell. If not you have more income. How is their rent compared to market rate and how is it working with your expenses?
Where is the property located? Is it close to a major city or out in one of the oil patch towns?
Real Estate Agent · Buena Park, CA · Member since 2016 · 743 posts · 424 votes
9y
Gary Cooper ( great name by the way),do what is best for you.Selling an income property is a short term gain long time loss.If the property is in a good location that is steadily growing in value,is in good condition with no major repairs needed in the next few years(roof replacement,electrical,etc.),and is providing good cash flow,then I say hire a tough property manager,raise the rents to an appropriate level and tell the tenants to clean up or get out.
San Antonio, TX · Member since 2016 · 9 posts · 1 vote
9y
@Marian Smith. Thanks. Should I provide a print out from the county appraisal site?
@Paul Ewing. The property is in Del Rio, Texas. Closer to the Air Force Base than the lake. Rent is $600, and thinking of going to $675 with six-month lease. The previous lease (the one I inherited) didn't have a lot... teeth to it, so to speak. The new one will. Thank you for your reply.
@Brandon Battle. Ha! Thanks. The house sits on half and acre in Del Rio, Texas. Del Rio is a nice place for retirees. The place could use some cosmetic work, but nothing is wrong with it structurally. Thought about a property manager as well.
@Chuy Gonzalez. Thanks for the reply. That's what I'm grappling with. If I sell it, I'll have a nice windfall of cash to invest in elsewhere. If I keep it, steady month a month.
Investor · Boyd, TX · Member since 2014 · 688 posts · 467 votes
9y
Originally posted by :
. Thanks. Should I provide a print out from the county appraisal site?
There is no reason you need to "prove" to them that the taxes are higher. You are the landlord and can set the rent to whatever you want. Giving them valid reasons is a courtesy but you don't have to try to prove it.
Rental Property Investor · Phoenix AZ / Kendallville, IN · Member since 2016 · 293 posts · 149 votes
9y
@Gary Cooper I was in your position earlier this year. I inherited 14 units with my father passing that were in another state. At first glance of my properties I thought sell, sell, sell. But this being my first experience of a rental property owner, I took a breath, and figured out how this could work. And I made it work. Currently, I am cash flowing every month. I won't go into detail, but its in my bio.
All I can say is this might be a good property to keep for a year and as an opportunity to find out if landlording is for you. You mentioned sell it and find something closer to you.
Whether you keep it or not, it sounds like you need to get some new tenants. As far as raising the rent, I would wait to raise the rent after the tenants leave. Then you can rehab the units (new flooring, paint, etc.) with the tenants gone, then raise the rent with new screened tenants. After you complete the rehab, do a video walk through the improved unit. It will come in handy in court if needed.
One of the most important things is get familiar with your state landlord / tenant laws.
Real Estate Investor · Williamson County, TX · Member since 2011 · 1k+ posts · 961 votes
9y
Like others have mentioned, you owe no explanation. I would not share anything other than "real estate prices have gone up in the last few years so property taxes on the property have increased $500. To cover this and other rising costs rent will be raised to $1150 a month fir 2017. This is still at or slightly below market rent according to Zillow Rents. " I like to give concrete evidence that my costs have gone up and offer proof that rent is still reasonable for the area. In my area it is still cheaper to buy, so I want my tenants to feel renting from me is a win-win.