Hello everyone,
What is a good way to raise rents without a sudden big increase in a short period of time. I have one tenant that was paying the previous landlord about $150 below market I just want to get them within $50 of market, because they clean the outside and inside of the property for me. Therefore I deduct $50/mth for this. Also is that too much for cleaning and garbage disposal.
Thank you, Youngone
Bump the rate $25-35 a month every 6 months until you are where you need to be. These are called “nuisances raises” because they are a nuisance but not a large enough one to make them pack up and leave.
Is this a multi-family? If so, $50 a month is probably fair if there is not a ton of work involved (remember, it’s only $12.50 a week and you would probably pay your kids more allowance than that to do the same chores!)…if it is not a multi-family, they should be cleaning up and doing the trash as part of their lease.
My 2 cents…
Keith
Thanks for the advice. I am going to give them a $20 increase next month with the new Monthly lease agreement.
You should have a lease. The lease should be 1 year. After the lease expires, always have them sign another 1 year lease. That is when you break the news that the rent is going up.
One year leases can be very ‘regional’. VERY few leases in this area are 1 year…most are 6 months and then convert to month-to-month. This is not to say you can’t have a 1 year lease but it is MUCH harder to get one here.
I purchased a property that already had tenants in it and it was below market rent. It had recently converted to month-to-month. I raised the rent $25 immediately. I talked it over with the tenant after I sent his notification. I just explained that he is below market, the rent raise was less than 5% and he had been in the house a year with no rent raises…he’s fine with it. Most tenants are reasonable. They understand that everything goes up. Be fair with them, give them plenty of notice (45 days at least), and they will normally respond accordingly.
Keith
Keith