Deciding on whether to raise the rent or not for properties in DE

[Buyan Thyagarajan]

Hi Guys,

I have a rental property in Wilmington Delaware which is a single family home for $1550 rent. My current tenant wants to renew the lease but says he will pay the original rent. I have new offers from zillow at $1600 plus. Looking at Zillow the average rental in my area is around $1600. What do you guys generally do for tenants now who have stayed for a year and want to renew the lease? I am also concerned on risks on Covid and lose the tenant. 

Buyan

[Curtis Bidwell]

@Buyan Thyagarajan.  My policy on raising rents is simple: “Every tenant, every year.”  Don’t let them dictate the terms of your business.  And don’t fear them, or you will go out of business. In my market, I almost look forward to turnover because the market moves faster than annual rent increases!   (I turned a unit this month for $175/mo increase - after doing $75/mo increases the last 2 years on existing tenant! -they’re move was due to military relocation, not rent price).

Your raises don’t have to be extreme, but your actual cost of ownership and maintenance go up every year.  Taxes, Insurance, maintenance, utilities, wear and tear, etc... 

Also, if your in one of the “progressive” markets that are increasing “tenant protections” while limiting your property rights and contract rights, you need to keep it at market rates or you’ll never catch up once they fully institute rent controls.

“I can appreciate your sensitivity to rent costs.  The current market dictates $1600/mo for your home.  Based on the current costs of property taxes, insurance and other costs out of our control, I am able to do $1580 for you, because you’ve been a great tenant and cared for the home. If that doesn’t work for you I’ll need to know by (date) so we can plan accordingly.”