Annual Rent increase percent

[Niti Bhat]

We are kind of new investors, started out last year. One year is about to end on one of the properties. What should be the general annual increase rate in rent? And if we want to give the month to month option how much is the difference between the annual as compared to month to month?

[Ron H.]

There should be no difference between month to month and annual lease.  Long term tenants are going to move when they are ready to move.  Having  a month to month lease is actually a benefit to the owner as you can end leases quickly on bad tenants without having to evict them for a lease violation.

I always do a rent increase yearly even if only $10, just to keep tenants used to the concept of inflation. Due to the rapid rise of rents in my area, and also  rapid rise in expenses I am expecting to do at least a 10% increase for existing tenants this year.  I would like to do more but somewhat concerned about this forcing a turn, which raises my expenses. Properties will still be under area market rates with this increase.