All Forum Posts by: Aaron J Smith

These are always tough decisions to make and I appreciate all the thoughtful responses here.  You never want to lose 'good' tenants, but 'good' tenants, by definition, should pay the going rate for the area...or at least very close to it.  I think this decision comes down to three things:

Risk - What's the risk that doing a more rapid pace of increase would drive your tenants away?

Relationship - Is your relationship with the tenants strong enough to navigate through the discussion of raising rents faster to get closer to market rates?  Do you know their financial situation and whether they can afford the increase without financial hardship?

Replacement - If they leave, can you replace these tenants with similar ones willing to pay market rates within a couple months?

Based on your numbers above, if you could even generate $2,000 vs $1,400 ($600 different) you could afford to have your property sit empty for couple months and break even at about 7 months or so.  $1,400 x 7 months =$9,800.00 or $2,000 x 5 months = $10,000.00.  Then, everything after that is additional revenue.

Good luck to you as you navigate this challenge.

@Anja Schaer I would love a copy of your checklist if you are willing to share it.  Thank you so much!

@Bryant Xavier This is really excellent, well organized advice.  Thank you for putting this together!

It seems to me that your tenants need some financial and budgeting counseling NOT the ability to pay their rent twice a month.  Maybe refer them to RamseySolutions.com as Dave Ramsey does a great job with simplifying budgeting for people.

That being said, you can have compassion for people AND hold them accountable to their contract. I would suggest you proceed with eviction if they cannot pay their rent on time anymore.

Glad it was helpful!  Best wishes....

Ryan,

It really depends on what you want to do.  If you only want to collect payments and not use all the service that a PM software could provide, I would say check with your current bank and see if they offer ACH services.  You can use that service to collect rent payments before paying a third party to do it.  Often this method is cheaper and more flexible as you may be able to pay other things also using ACH (payroll, vendor payments, etc).

P.S. - Before moving into real estate I spent 25 years in banking and worked in almost all facets of the business (small business, treasury, retail, online & mobile banking, and operations).  Also, I've setup 100's of companies up for that ACH service that I mentioned and know that each Financial Institution does it a little bit differently.  I'm happy to answer any more questions you have about that.

I wonder if anyone would have a take on whether homeowners who have locked in sub 5% interest rates on their primary residences are deciding to become landlords rather than sell their homes.  In my area the number of properties on the market continues to be very small and prices remain elevated and I wonder if this could be a contributing factor.  I'm a 25 year banker who is starting a property management company and would love any insights or data anyone would be willing to share.

Thank you.

Yeah, it never works out exactly like you think it will.  Good luck!

I've only protested my tax assessment once but it was successful.  I started by contacting my taxing authority (Georgetown Township) and asking them what the process is to dispute.  I had a recent property appraisal from a refinance I did and when that was presented it went pretty smoothly.  I had to fill out a form and appear in front of the township assessor and they made a determination in a couple weeks.  Best of luck!