How is your rental business? and for the coming future?

[retire to nature]

I always inspect the house, just an informal walk in , say hello type of thing each year.
Didn't get to do it last year due to Covid., this year is a question mark as well.

I think it's better to raise the rent consistently 3% per year is more comfortable for tenants and actually pulls in more rent due to compounding than 6% every two years and is less likely to push them to move out.

Good idea, I haven't thought of the compound way. and informal walk in every year too.

 

[retire to nature]

I just want to mention. I put 2bed and 1 bath single family house for rent. I can tell it is so competitive now. I get at least 3-4 times more inquiries than before covid. It is because very hot area to sell, but I can tell why price went up.

Like my original thread, I was getting from $900 from the house, now zillow says $1045.

I have similar house collection $800 for 2 years, now I asked $50 up, she is not happy, but I am sure she would renew. But I am not sure If it is good to 1 more year renew.

But my concern is if it is ok to go this low 3-5% increase even though market is much higher and afraid property tax etc.

 

[retire to nature]

Hi All,

I started the thread one year ago guessing if too much increase in rent, how to catch the market value.

I had the family loss and pandemic so skipped a couple of years of increase, so I was already behind at that point.

I did increase about $50 around $800-$1500/month range home. Now about $100-$350 behind which means 25%-40% of their rent lower than market.

Also, talking about all the inflation scares me making more behind.

From my rental business experience, I dont do too low amount, because all bums were coming into my home.

Most of them making on time, maintaining house ok, too. I am still wishy-washy selling all to top market time or keep it forever and sell as is later.

Recent stock market scares me that housing maket would go down that way too. All media says it will keep increase the value. So I am a lazy ass to sell for now. I became a retiree mind set, since selling is another hard work too.

How are you guys handling your rent increase in this crazy time of pandemic and high inflation future time? How other property management companies are doing?

thanks.

 

[rodi]

We have great tenants that have been in place since 2014. They were paying market when they moved in. They are paying significantly below rent now because we haven't increased as much... but they maintain the place well and never miss a rent payment. We will do small increases each year going forward - but I suspect we won't get to market rate till they move out and we re-rent it. Good tenants are worth getting less than market rate.

 

[JDARNELL]

I never have really raised rates on existing tenants and I usually adjust when I turn over tenants. However this year I will be raising rents and I think they expect it. I will prepare a letter to let them know including that it is nothing to do with them but rather due to the increases I am having to pay in costs and current market conditions. I have one that may go but so be it. I appreciate him being there but I will find someone else if that happens.

 

[Starsky]

If we decide to raise the rent, I'll usually wait for a new tenant to do it. We tend to lag the market rates a year or two, so my raises are done to keep up with whatever is going on locally. My rents went up about 15% during COVID. My brother's San Diego rental went up over 30%! It's highly market dependent, but inflation has made increases inevitable everywhere. When the time comes, we depend on our property managers to advise us on how much to increase rent based on their local knowledge of the market [not Zillow]. We don't do it often, so it's been nice to give ourselves a raise this year.

 

[NgineER]

I usually increase rent when a unit turns over, but have occasionally raised rent while there is an existing tenant. I am/was at the upper end of what is tolerable for rent, so rarely have tenants that stick around for more than two years. We are trying to reduce that turn over and keep tenants longer in exchange for less turn over cost.

I use rentometer.com for setting rent prices. I often list it for a week or two and drop listed rent if there is not sufficient interest. We have not had more than a couple of weeks vacancy between tenants over the now 12 units and five plus years of renting. Having a 60 day termination notice helps with that also.

 

[l8_apex]

I usually increase rent when a unit turns over, but have occasionally raised rent while there is an existing tenant. I am/was at the upper end of what is tolerable for rent, so rarely have tenants that stick around for more than two years. We are trying to reduce that turn over and keep tenants longer in exchange for less turn over cost.

I use rentometer.com for setting rent prices. I often list it for a week or two and drop listed rent if there is not sufficient interest. We have not had more than a couple of weeks vacancy between tenants over the now 12 units and five plus years of renting. Having a 60 day termination notice helps with that also.

Thanks for that mention, I hadn't heard of rentometer before, nor was I aware of any similar website.

 

[Another Reader]

I use Zillow, Realtor.com and Hotpads for listings of competitive rentals. I watch to see how quickly properties are leased, whether inventory is increasing or decreasing, and whether rents are increasing or decreasing. I have one going up this week and I am undercutting a model match two blocks away that has been listed for over 30 days by $75. Put the coming soon listing up last week and have a lot of interest, without pictures.