Title says it all, our rental is coming up on one year with these (Excellent) tenants and it looks like they want to stay. From both sides, renters and landlords, what do you expect in the way of annual increase on residential property?
Three bed one bath full unfinished basement, nice yard, car port, very nice lockable shed etc. Very popular trendy neighborhood for young people and families (Ferndale, SE Michigan)
Thanks for any input.
What are the going rates around you?
My landlord keeps rent low. The place is paid for many times over, she likes to have the pick of the litter when filling it in, and hates finding new tenants. She doesn't increase rent often if at all. In the past (different places), I've agreed to an additional $100 a month. I've also left over an increase of $25 a month--the $100 increase brought it to a still below market value price. The $25 increase took it past market value.
I would ask an additional ~ 5% due to the market, but be prepared to negotiate down to no increase because they're good tenants.
When I was renting, in "commercial" rentals i will call them it was generally ~$100 a year, in the owner rented places I never had it go up if we were both happy. I did handy man stuff, kept the place up etc.
If they're excellent, stay put, keep them happy.
Years of experience as a landlord speaking here-nice, responsible tennants who are appreciative, and will not trash the place= priceless. Jack up to fair market value when they leave. The above is, of course, an opinion.
It's totally dependent on the tenants inhabiting the place I feel. I've had the same tenants in my rental house for going on 6 years, and I only raised the rent 1x and it was only for a pretty large property tax increase that I swallowed for 2 years.
In return, they treat the place like they own it personally, the husband does all of the minor handyman fixes that drive landlords NUTS, and they are genuinely nice people. They are so nice, that they actually are in the process of buying the home from me in a couple months, so it all works out.
In my experience, it wasn't worth the extra potential hundred dollars a month to open the door up to gamble on whether or not scumbags will trash my place.
wheelsmithy wrote: If they're excellent, stay put, keep them happy. Years of experience as a landlord speaking here-nice, responsible tennants who are appreciative, and will not trash the place= priceless. Jack up to fair market value when they leave. The above is, of course, an opinion.
Completely agree.
I have the best tenant I could ever ask for and have not increased the rent in the last three years. She pays very month no later than the 25-26th of the previous month, keeps the place clean and never calls me.
A steady paying renter that doesn't trash the place is worth more to me than a few hundred extra dollars a year. We charge less than market value for the area, but we have strict move-in rules (first/last month rent up front before moving in). The up front cost usually weeds out the flakes, but it also makes it harder to rent out. We're have all three properties rented right now and no plans for an increase.
If you have good tenants, that pay on time, I wouldn't raise it every year. Maybe every 3-5 years. Our rental, the rent went up when the tenants changed. The longest stretch was 3 years.
I've never had the price adjusted on any place I've ever rented. Every contract I ever had went month to month with 30 days notice for leaving after 1 year. I've stayed in rentals for years with a month to month contract and never any adjustment. I've never been a E36 M3 head renter either though, and I've always gotten the majority of my deposit back.
I only have commercial rental units, and our tenants pay per square foot. We have an ~3% annual increase built into our multi-year leases. It's all over the map on renewals, based on any additional construction costs (ie, new carpet or paint) and such.
Thanks guys.
Like many of the others commenting so far, when I was a landlord, once I found good tenants, I kept rents on the low side with increases only when I was coming in a bit below market, but I also made it clear that appreciated them being considerate, keeping an eye out for problems, taking good care of the place, helping out with keeping the yard nice, etc. 
I wouldn't make any hard and fast promises like no rent increases ever, but good renters can be hard to find, so I'd say keep them happy, and let them know that you are thankful. Yearly renewal is a good time to a bit of searching around and see where you fall in terms of your local market. Just as an example, if comparable places in your neighborhood are going for $1800-2200/month, and you are getting $1800 or $1900 with good tenants, stay put. If you are getting $1500/month or $1200/month with good tenants, might be time for an increase.
The place we rented in Knoxville actually decreased the rent by $75 per month after a year just to keep us there. They loved us. I have not had a rent increase in the two years we've been in the house here in Texas.
Never seen a rent increase as long as I've been renting. I'm usually renting from the owner.
Is the rent increase worth the risk of loosing a great tenant and getting stuck with a bad one? A big part of my plumbing work is repairing and remodeling apartments and other rental property. I get to hear all the horror stories and see what was left behind. Almost never go in the apartments with good tenants. Once in a while I'll get to replace their water heater or fix a dripping faucet.
Man. We had a landlady in Seattle who was enamored with keeping up with market rate. 1st year $100 per month. She was asking us to sign for our three year which would have been $500 above what we started at.
F that city. I'm now buying a 3500 sq ft 4 bed three car garage for 600 less a month than she wanted.
We were perfect tenants. Had one mess up with our bank early on for a late payment, but in the end I was fixing stuff for her in her house. Her husband was diagnosed with late stage cancer.
Long story short. Don't raise it so high you lose good tenants. Our landlady sold the house rather than turn it to new tenants. She did so at a poor time of the year and probably made $50-75k less than she could have got in a hot season.
You'll need to log in to post.
