I have a tenant who will finish their second year this summer. I didn't raise rent last year. I know the market dictates that I do raise this year; just trying to decide how much.

thanks

We are in the same boat. With the new tax appraisals we will be forced to raise several properties as their leases end. We know there is room for raises based on local rents, but we have such great tenants that the risk of losing them is making us really think hard about how to do it. We know there is nothing else nicer for the new rate they will have, but it usually takes us 2 months or so to find qualified tenants, so a measly $25/month isn't typically worth it. Lose 2 months for $300? Has never made sense to us. We do raise every rent with new tenants & plan to start going month-to-month as leases end so that we do have more latitude to raise as things change.

With the increase in taxes, most need to go up at least $50/month - a couple of single family houses with long term tenants are really undervalued, so some of them should go up $100-200, but not sure how to make that more palatable.

We will have a tax bill of around $7K extra this year & need to recoup it somehow. I'm hoping they will stay because our properties are really nice. Normally I would be afraid that some would leave & buy, but that's almost impossible here now with the super low inventory of decent houses on the market.

There are 2 sets of new apartments in town with more amenities (pool, granite, gym, etc) but their rents for 1/1 units are considerably higher & even their 2/1 units are more than our single family houses of similar size. So I'm not too concerned they will leave for those units.

Keeper of The Spirits said:

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((Market Rate - current rate)*12) - cost to release

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Ok. Interesting. What's captured in that "cost to release"? How do you factor in/calculate an estimate for vacancy during the relet period if a tenant balks at higher rent and doesn't relet? Historical time to lease?

I agree with comment above, I'm not losing $2-3k if I miss a month or incur fees for background checks etc just to get an extra 500-600 a year.

I usually estimate 2 months (1 to find tenant and make ready, 1 month split between the listing agent and leasing agent)

Keeper of The Spirits said:

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I usually estimate 2 months (1 to find tenant and make ready, 1 month split between the listing agent and leasing agent)

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So this means you have to be about 15% under market in rents before it makes sense to raise their rent.

Probably about right.

Agreed. Being slightly under market has always let us have pick of the litter tenants. Raising the rent very gradually to stay behind market has worked for us to keep good tenants.