Tennessee Rent Increases
Interested to hear how many of you handle rent increases. Here is what I do currently. All of my leases are 12 months and are renewed if someone chooses to stay. I contact them 60 days out from the expiration of the lease. I increase the rent every other year and usually I try to keep it modest, around 5-6%, if they have been a good tenant. But with rising CLI (cost of living index), property taxes and insurance, I have fallen behind the FMR (Fair Market Rent). I am a pretty active landlord and probably have higher expenses than some landlords as it has been my policy to take care of my properties to get good tenants. I have a very low vacancy rate and I like to keep my tenants. More than half of my units have tenants that have been with me for more than three years. I have a 3BR/1Bath unit that is currently getting $900 per month on an inherited lease. I know it needs to go up and the tenants know as well. The IRS is saying that FMR is $1,328 but that would mean a near 50% increase in rent. It still needs some additional work and the tenant owns all of the appliances. My debt service is about $540 per month.
Any thoughts? I appreciate any input.