All Forum Posts by: Christopher Wall

@Christopher Wall

Yes. I do this with a lot of great tenants. I like to look up the rent estimate on Zillow and assuming it is higher than current rent or the rent you want to raise it to, take a screen shot. Send it to the tenants and tell them you need to raise the rent, but because they have been great tenants you want to keep it below market value (what Zillow says is market).

I also bring up that if last year was a tax assessment year explain taxes also went up, or of this year is an assessment year you expect taxes to go up. They feel appreciated because you are trying to keep rent below market value but understand your expenses are going up.

Evaluate whats it going to cost you to bring the place back to rent ready condition and compare it to how much more cash flow it will bring you. You really should be raising rents considering yours are significantly under market. Chances are your tenants are going to stay if all your competition is above $1500

When was the last time you raised the rent?  You should be doing this annually so they get used to it.  How much have your costs gone up since you last raised the rent?

Hi @Christopher Wall, this is a question that comes down to you and your landlording style. Of course, we all want more rent per month, but it comes down to your goals and what you are comfortable with (as well as rent control laws if those apply). 

It seems like the rents on that unit are well below market value, so if there are no rent control laws in that municipality preventing you from making that huge increase, it would probably be in your best interest to get new tenants in there to bring your rents up to market. If the current tenant accepts the increase and you are OK with them staying, then great--but for the most part, raising rents by that much at once will cause most tenants to seek an alternative. 

For the most part, I encourage all landlords to always continue with their standard rent increases yearly to keep with inflation and the CPI (2.5-5%, whatever is allowable) so that situations like this don't occur where the rents end up hundreds below where they should be.

Christopher, I think that this is one of those situations where if you evaluate all sides of this question and it seems like it will work out then I don't see a problem. Here is definitely some of things I would consider. 

1.How much do you want to raise rent?/Does it matter to you if the current tenants leave or do you like them enough that you would prefer the long term stability of them staying? 

2.If you did raise rent and they stayed would that relationship fray because it may become more difficult for them to afford it? Or are you confident in the quality of your space that you can find new renters swiftly. 

I think considering those thoughts. Most importantly as long as you can keep it rented with quality tenants I think you raising the rent should not be an issue especially with inflation and the current cost of living.