Another Question About Increasing Rents

[Jennifer A.]

I've own a small handful of rental properties.  I have one single family house that I bought in 2012 and another bought in 2014 among other properties.

I've been increasing rents on the properties I mentioned above to keep up with the rental market. 

However, now looking this spring at Craigslist, Rentometer, Zillow, etc. it appear the market may have increased dramatically in the year.  Current rent at our properties is $1,325 for a 3 bed house and comps are at about $1,500 right now.  That would be a huge increase in one year. 

First, I really have a hard time believing that rental rates have increased that much over the last several months even though that is what all the evidence is telling me.

Second, I'm debating jumping it up all in one year or doing something modified.

I know that single family homes for rent are quite difficult to find in our area and in high demand (we get contacts regularly looking for something like this).  That said, we have great tenants that pay on time every month without fail, almost zero maintenance (I know that it isn't because they aren't reporting, they just take good care of our property) and that and the lack of turnover (they've been with us since we bought) are worth something to us as well as everyone knows how much money can go into those things.

Just looking for thoughts and suggestions.

[Matthew Olszak]

@Jennifer A. Those listings are only asking price - we don't know that these folks are actually getting those rent amounts, or if they are, how long its taking them. The difference in your rent vs. the listings you've seen is $2,100/yr. If you have a single month of vacancy waiting to try to get that rent amount, you've burned up all but $500 of that. Factor in turnover costs, and you've likely broken even or lost money. If you use an agent, you've lost even more.

Based on that risk, I'd keep the rent increase in line with what you had done in the past and wait it out to see if that large increase you believe is happening is actually being obtained and if it in fact sets a new standard that sticks. If your area is a heavy rental market on the MLS, an agent can pull more accurate comps for you of what has actually rented.