Moral dilemma on raising rent

[Nat C.]

I'm in a crux about what to do on 2 rentals. I've never raised the rent on both properties since the tenants moved in. One tenant has been there 5 years and the other nearly 7 years.

I would like to start with a prelude that money is not what drives me in life and ethics is the most important thing to me.

Neither house has a property manager and both tenants deposit the rent into my account each month, on time, without fail. I bought these houses when the market was at the bottom, so my initial investment was low. The tenants have already well and truly paid off what I bought them for.

House 1 Orlando: 3 bedroom house. Tenant pays $720. Rent comps are now $900-$950. He is a single guy, has children and from what I know, he looks after the house like it's his own home. He has been there nearly 7 years. Generally if something need repairs, he will fix it himself. If he needs to buy a part from the hardware he will send me the receipt and I tell him to deduct it from the rent. Total maintenance cost has therefor been around $100 since he moved in.

House 2 Phoenix: 3 bedroom house. Tenant pays $870. Rent comps are $1100. The tenant is an elderly lady and has been there around 5 years. They only contact me for necessary repairs and total maintenance cost has been under $500 in 5 years.

I was thinking of asking both tenants if they would agree to a reasonable rent rise of around $80 a month. If either of them say they can't afford it then I will not push ahead with it.

Has anyone else been in this situation? What did you do and how did the tenant respond?

Please don't respond saying I'm a weak landlord who should jack the price up to market rent. Good tenants should be rewarded and I'm not in dire need of a few extra dollars.

[Tanya F.]

We are also well under market rate. When good tenants are renewing, we raise the rent roughly every other year, about $40 (which is under 5%, as our rent is $1100-1200, and still at least 10% under market rate). Between tenants is when we make the big adjustments, sometimes 20%.

We self-manage.

We give tenants plenty of time (a month) to decide if they are renewing, so they can shop around and see that they are in fact getting a good deal. They've (so far) always decided to renew.

The above posts are too black and white. It's not simply 'running a business vs running a charity'. There's a lot of middle ground. Tenants that take good care of the property have value. And housing costs are really way too high in our area. Until we see wages increase, we don't want to be at the top end of the market rate we could be getting.