Tenant Deliemma

[Mineto Anfield]

I was helping a friend who needed a place to stay and rented to him for $550 This being the 4th year I increased the rent to $625, but the increase still leaves me at a small loss each month. Although there was a little pushback on the increase he is paying it. The real issue I have is that since I've contracted with a very good property manager she tells me that I could be getting $1,000 at least. I really want to get the rent that the property will bring.
Any suggestions on the best way to approach the tenant on this needed increase?

[Jesse Tsai]

Its a little late now, but a rule of thumb I have is to never, ever rent to friends or family members. By doing that, you can difficult decisions where business and friendship are involved.

In this case, I would thank the tenant for being such a great tenant and friend (to soften them up), inform them that market rents are now at least $1K, and that you have no choice but to increase rent to that amount. You can't afford not to.

If they want to stay, they're more than welcome to, if not, than thank them for being such a great tenant, and offer assistance to find a new home.