What is a good tenant worth?
I looked a duplex about a month ago, and have been meaning to ask this question since. This is an up/down duplex. Each unit is 3 bedroom, 1 bathroom. Already 100% rented.
The top unit rents for $575, could probably be raised to $600. Nothing really not note, it was a nice unit. The downstairs is nicer, and has a very long term tenant, he pays $465. His unit is certainly worth $600 a month. Let's say I'm wrong though, and it's only worth $575. That's $110 less or "loss". Before one screams raise the rent, here me out....
1. He's been there for 5+ years and doesn't want to leave. He's probably 60, and pending some catastrophic event, from what I can tell he wants to stay there till he dies.
2. He mows the yard with his own mower, which is a value of $500-$550 a year.
3. He takes immaculate care of the place, he tends a nice garden, planted rose bushes, a peach tree, all sorts of stuff. This house is in a C neighborhood, and it has the nicest yard on the street because of his efforts.
4. He loves the place and was there the entire time I saw his unit, talking about the whole thing. Really proud of his home.
5. On #4, he is a bit of a character. Type of guy that will talk your ear off. I'd have a property manager so it's not a huge deal to me, but just fyi.
So if I bought this, and lost $1320 in rent, got $500 back in value from lawn care, we're now talking $820. So what's a good tenant worth? Raise the rent to $575-600 (he'd likely leave as he's on partial housing assistance), raise partway and hope he stays, or leave as is and have a "good tenant"?