Lease Renewal during COVID... What would you do?

[Chris Koch]

SFH rental purchased in June 2018 with new tenants on a 2yr lease at $1300 with 3% annual rent increase. (Lease specifies 3% annual increase with two year lease or 2% annual increase with three year lease.)

Increased rent in June 2019 with no issue to $1339.  Tenants have never missed a payment.  The house is very nice, but the rent is still probably on the high end of the normal range for the area.  Initial two year lease is up for renewal in June.  PM company prefers lease renewals in April-July, when rents are highest and inventory is lowest.  Took several months to place tenants in a similar house in the neighborhood last September.  Had to reduce the rate for that other rental to $1200 before it rented.

Just got an email from the PM suggesting that, because of COVID, they want to change the proposed renewal offer.  Their new suggestion specifies a 1 year term with a 0.82%  increase to $1350 or a two year term (with no annual increase) at $1360, which is ~1.5% over current.  Neither of these are close to the standard 3%/yr COL increase expected, but maybe not reasonable to expect 100% success at a 3% rate adjustment every year forever.

What do you guys think?  Are you raising rents at this time?  I don't really want to raise anyone's rent currently, but maybe I'm too soft... maybe we craft a new lease that holds this year's increase off for 3-6 months?  And maybe it's smaller?   I don't know... just sort of looking for ideas and thoughts.