Increasing rent from $1,245 to $1,445? Remove tenant or offer?

Question

Hello again, BP.

So, I have not raised my rents in roughly three years, but really feel the need to increase rental prices now after looking around.

Currently at $1,245 for a 2 bed 1.5 bath 1060 sq ft flat in a B+ to A- location.

Should I offer the increased price of $1,445 to the current tenant or remove them for minor renovations before renting back out?

Slightly nervous that they might get angry due to a $200 rent increase and potentially damage the unit.

What are your thoughts? Do I need to give them any paperwork as to why I would not be renting the unit back out (PA)?

Thanks for any and all replies!

Alecia Loveless · Answer

@Lawrence Paul In an A market hopefully tenants won’t damage the unit but you never know. If you are $200+ give or take below market the tenants should know this and know they’ve got a deal.

Are they at the end of an annual lease or month to month? I think you have to give them a little time to make arrangements. It’s about to be November 1, so if I was you I would say February 1 the rent is going up to $1400. Can’t remember what you said the new rent was. Sorry. I’m sure January 1is more ideal but then it really screws up their holiday season and just makes you look mean if they don’t stay and have to move between Christmas and New Year.

If they do move I’d offer the new tenants a 6 month lease to test the waters and to get it renewing in the summer then when it comes due renew if for a year if they’re agreeable.

Bill B. · Answer

I’ve had 4 rent increases this year. 2 x $150, $175 and $250. None of them blinked. Their only concern was I was also changing them from annual leases to MTM and they were afraid I planned to increase the rent again in a few months or evict them. After assuring them the rates would be valid for a year if they made all payments on time they were all fine with it. There’s plenty of inflation and zero inventory.

Lawrence Paul · Answer

Thanks for the insight, Bill.

All great points.

Lawrence Paul · Answer

Annual comes up in December and the next two are in August.

Might do that idea and offer a 3 month lease at the increased rate to the tenant in December.

Increasing rent from $1,245 to $1,445? Remove tenant or offer?

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