It is quite easy to justify rental increases in a good economy when jobs are plentiful but do we have any landlords who are holding out on rental increases as the New Year approaches?
I guess in the end it all really depends on the demand for your units and if your m-t-m tenants realize they are in a good situation they will accept the rental increase but if they think they’d be better off elsewhere they they will leave.
What are some of the reasons that you all will be giving m-t-m tenants for the rental increases in this economic climate?
We have three long term tenants who are paying significantly below market rent. We are going to raise their rent amounts in March or April of next year. By that time, we will have owned our building for two years and people should also be recovering from some of the expense of Christmas giving by then. I’m not worried one bit that any of these people will leave because even with the increase, they will still be significantly below market rent. So they can’t go anywhere else and get a better deal on an apartment. I’m not going to give them specific reasons why it’s going up. I don’t need to give justification for more money. As long as our price is comparable to or below market rent, we’ll be fine.
We seem to be getting a little pricing power here in Ohio lately. Rentals still seem to be in high demand and the number of available units is relatively low. It would be an exaggeration to say that I can raise the rent very much, but I am slowly raising it and seem to be successful so far. The bad economy has created a lot more renters and the quality of renters is also improving.
The market sets the rent. You don’t.
Find out what other landlords in the area are charging for rent, then adjust your rents, if need be. Vacancies cost, to be sure, but if you can get 10% more on a property with no deferred maintenance, take the risk.
One year lease agreements at market. 15-20% more for mtm contracts; 5-10% more for 6 month lease agreements.
I bet you’ll be good with the results.