What's the useful life of a tenant?
Hello, my question is how long will the average person rent an apartment for? I suppose a lot of that has to do with age, profession, and amount of tenants in one unit, and other factors? But generally speaking is there a certain amount of time?
Say 3 years on average?
The reason I ask is that I've been looking at an apartment building. The law in the province it's in dictates that you can only do a 2% rental increase per year. However, the rents are a little low right now. You can re-rent them at market rate after someone leaves or gets evicted. So my though is that if the average rental time someone rents for is say 3 years before moving on, then within 3 years I could re-rent at least most of the units at a higher rate without having to evict anyone or break leases.
Any advice on how to proceed in a situation like this where the law dictates that you can't raise rent over 2% per year? You could raise them to market rates but you'd have to do it in a way that keeps the building cashflowing in the mean time? I suppose just gradually re-renting as people move at the market rate would be the way to go?