Rental Increase Advice (NYC)

[Steve Velez]

Hey BP,

I'm looking for guidance/advice on how to raise the rent on an existing tenant.  Some history...

I have a long time tenant renting for almost 10 years for my coop rental property (first rental) in the Bronx.  The property has no mortgage so it has decent cash flow.  I've had virtually no maintenance issues and the tenant has been a very good tenant and has been timely other than a period of time years ago when the tenant was ill.  The tenant caught up on payments once we negotiated a plan, and then continued to be on time with future payments.

The market rate for this apartment is $1550-1700. Currently my tenant is paying $1375. I need to renew the lease later this summer. Given the lower than market rent, the pandemic, and a recent increase of monthly HOA by $18 , I'm not sure how to handle it. The tenant was always concerned about rental hike so they would enter 3 year leases. Here is the lease history.

2011: $1150

2012-2015: $1190

2015-2018 :  $1275

2018-2021: $1375

Bumping up the rent to $1550 is a 13% increase on a really good tenant.  Do I sign the tenant  to a similar long term lease (3 years) with anual increases? And if so what should that look like. Do I risk losing a good tenant?  I prefer to keep the tenant bc they have been a great tenant.