They like turnover

[Jeff S.]

Have had more time to network (recently retired from w2) lately and came across a different philosophy that is making sense to me.

Spent time chatting with 2 large property owners and both of these guys don't like long-term tenants because the apartment becomes outdated and the rent lags because of it. They like the turnover. I guess that since they are also property managers they enjoy the fees with the new tenants too. One guy owns apartments in several states.

Rents in Portland have been increasing dramatically so consequently my rents are really low. My last vacancy allowed me to increase rent by 20%. I could do that again but hard with existing tenants. For the first time I'd like to see some turnover.

My question is how do you feel about turnover? Is 5 years the max you like to see or do you like to let the tenant ride preferring not to spend on the turnover.

[Joe Bertolino]

Build in an annual rent increase so you are never too far under market. They might complain about a 3-5% increase but most won't put down another deposit and incur moving expenses over a modest annual increase. You should never be 20% under the market.