Best way to increase rent

[Judy A.]

Looking for help. My husband and I are soon to be brand new landlords....My father in law recently passed away and we will be taking ownership of the home. It is a 2 family home in Boston(Dorchester), MA. His mother lives in one unit and rents out the extra bedrooms and the other unit is a 3br 1bath apt. The tenants pay 1200/month.  They also have a parking spot that is included with no extra charge. Rent in the area is well over 2k. How do we go about increasing the rent? Is it ok to increase the rent substantially to bring it to what the market is doing? If we do increase it do we just let them know 30 days before? They are long term tenants(been living there for years) and have a month to month lease. Thanks in advance!!!

[Nathan Gesner]

@Judy A. there are literally 172 different things that can go wrong as a new Landlord. Each of those mistakes can cost you hundreds or thousands of dollars. A property manager will cost 10% of $2,000 monthly rent or $2,400 a year, possibly less.

Do yourself a favor and find a good, quality PM to handle this for you. It will reduce the headaches and probably put more money in your pocket in the long run.

Remember: cheaper doesn't mean you'll make more money.

You can start by going to www.narpm.org to search their directory of managers. These are professionals with additional training and a stricter code of ethics. It's no guarantee but it's a good place to start. Regardless of how you find them, try to interview at least three managers

1. Ask how many units they manage and how much experience they have. If it's a larger organization, feel free to inquire about their different staff qualifications.

2. Review their management agreement. Make sure it explicitly explains the process for termination if you are unhappy with their services, but especially if they violate the terms of your agreement.

3. Understand the fees involved and calculate the total cost for an entire year of management so you can compare the different managers. It may sound nice to pay a 5% management fee but the extra fees can add up to be more than the other company that charges 10% with no add-on fees. Fees should be clearly stated, easy to understand, and justifiable. If you ask the manager to justify a fee and he starts hemming and hawing, move on or require them to remove the fee. Don't be afraid to negotiate!

4. Review their lease agreement and addenda. Think of all the things that could go wrong and see if the lease addresses them: unauthorized pets or tenants, early termination, security deposit, lease violations, late rent, eviction, lawn maintenance, parking, etc.

5. Don't just read the lease! Ask the manager to explain their process for dealing with maintenance, late rent, evictions, turnover, etc. If they are professional, they can explain this quickly and easily. If they are VERY professional, they will have their processes in writing as verification that it is enforced equally and fairly by their entire staff.

6. Ask to speak with some of their current owners and current/former tenants. You can also check their reviews online at Google, Facebook, or Yelp. Just remember: most negative reviews are written by problematic tenants. The fact they are complaining online might be an indication the property manager dealt with them properly so be sure to ask the manager for their side of the story.

7. Look at their marketing strategy. Are they doing everything they can to expose properties to the widest possible market? Are their listings detailed with good quality photos? Can they prove how long it takes to rent a vacant property?

This isn't inclusive but should give you a good start. If you have specific questions about property management, I'll be happy to help!