I am new to being a landlord. I have 3 properties that I purchased this year. How often do you raise rents? Every year? By how much? When do you give notice of rental increase? I would appreciate if all of you with rentals can give me an idea of when/how much/how often you raise rent.
Thanks - Lynne (newbie)
Lynne,
I normally adjust to the market every year. The exception to this is the property that I bought and got the tenants with it. The market rent for that property is about $750 and, when I got it, they were paying $600…I’ll raise that one every 6-9 months until it’s up to market…I usually only go $25 at a time (they don’t make a ton of money).
I usually give them 45-60 days notice.
Keith
Well if the tennants are on a yearly lease then you have to wait till the lease is up to raise rents. If they are on a yearly lease, i recommend you lease state the tennant has to give you 60-90days notice on renewal so you can give them plenty of time to inform them of the rental increase or find a new tennant.
If they are renting monthly, you can do it as you want. I do not recommend monthly rentals but some people like them. I have heard horror stories on how its harder to evict someone on a month to month lease.
Raise rents accordingly. If your expenses are not increasing and cashflow is fine, go with a small rental increase, if the tennants complain, tell them your expenses increased, they know insurance and taxes increase yrly and you need to pass it on.
I have a tri-plex that i plan on raising the rents about $150 a month on each unit. But I can because in my neck of the woods, rents are increasing from $100-300 a month now because of condo converisions and my tri-plex is very well maintained. Plus my insurance policy just went up about $2800 a yr so I need to cover that expense and i know my taxes will increase next yr at least $800… SO I need to create about an extra $3600 a yr to play it safe.
I know my tennats will hate it,but i have to pay the bills, however since I live in FL, I now plan on having a generator at my rentals which will make the tennants happy I know if we have another bad hurricane season with 10day power outages…
i usually make modest adjustment about every 15-24 months. particular if they are a good tenant; trying to get an extra $35/mn is not worth loosing a good tenant. The flip side is you can not let people get too far behind the market rate either. most of my tenants never stay more than 2 years so when it turns over that is when I make my big rent jumps.