All Forum Posts by: Keon Shoulars

@Keon Shoulars

We’ve found a great way to raise rent is:

• Determine market rent
• Share the proof with the tenant (they can see it on Zillow anyways)
• Tell the tenant, given your rent is $x and market rent is $y, what do you think if a fair increase?
• Often, they may volunteer a higher amount than you were hoping for.
• Those that respond “$0” or something ridiculous, you can request income documentation from them to justify.
• Don’t be afraid to share with them how much your property taxes & Insurance increased and that YOU cannot afford to absorb them.

ALWAYS get an increase or something of value annually when rents are increasing or tenants will start thinking they should never have an increase, making future increases that much more difficult to negotiate.

 I agree there may be times to lower the rent, but in my cities, county and generally state I have found that to be rare   Other parts of the country have different economic, real estate and supply & demand situations.

Ultimately it is the market, laws & condition that determine what rent is appropriate and what the community will accept.  Every market is different.

Don't listen to people on here that say "Always raise the rent", they don't know what they are talking about. Raising the rent depends on multiple factors but most of all is market trends. We are currently lowering some of our tenants rents because rents a rapidly decreasing.

Hi Keon, I agree with Theresa and Bill as well. Finding out what market rent is the first step into knowing if raising rent makes sense. 

I can understand your concern of not wanting to lose your tenant due to a rent increase. Especially if you consider your tenants great. I have great tenants and recently raised their rent due to market demands and expenses. I was only able to do this because I had the numbers to support (similar housing rents, increase in expenses) that it was a reasonable raise in rent. 

Most tenants will understand the rent increase if you have some numbers to justify it. Moving to save a few $20-40/month doesn't make sense if housing similar to yours also charge the same or very similar in price to your rent price.

I agree with Bill on talking to your PM-they should be telling you what they think market rent is. A tenant is unlikely to move for $20 a month.  

1) Never increase rent $5, it’s not worth the hassle, especially if tenant has autopay set up. 

2) Your pm should be telling you want market rent is. That’s their job.

3) If you are below market rent you raise it to that.  You don’t want to get caught below market when your city/state decides to implement rent control mid-lease and trap you below market forever. 
4) I’ve never raised rent less than $25 (already at or above market.) or $50-100 (5%) if even slightly below market. Nobody is moving over $25 or even $50/mo. Can you imagine taking the time to find a new place, pay the despair, set up utilities, arrange for a moving truck/company, packing and unpacking everything, changing addresses everywhere, etc etc etc. To save $25-$50/mo?  If they move they were moving anyway. 

TLDR: ask the PM what market rent is. If you’re at or near mwrket increase rent $25-$50 (assuming $1,000-$2,000/mo rent) (call it a minimum of 2%.). If you’re below, raise it up, to at least within a few 10’s of dollars of market. They aren’t moving to pay the same. Good luck. 

Ps. I charge 10% more for MTM and 5% more for 2 years. (I don’t see the sense in 18 months.). That 5% more starting day 1 is the same as a 10% increase after a year but feels better to most tenants.