Tenant is unhappy with the rent increase

Kar Sun · 2022-06-22T14:47:29-07:00

I have a tenant that pays on time and keeps place clean. I also offer him a desirable place to live that is being taken care of. To me nice tenant is not the one who expects me to subsidize their rent. I provide a service and a roof and that is why I have responsible tenants that I chose to have a professional relationship with. The place has lot of very desirable amenities and has a great location.. He has been with me for 3 years and I have only raised rent $125 in all these years and last year there was no rate increase. However, things have changed. I have expenses, taxes and other costs that must be covered as otherwise I will be in negative.. Also, there is a lot of demand. I sent a very nice letter to a tenant stating the data and a comparison rate with the market properties. In my market rental properties went up 124%. The hike is $400. Small apartments in my area go for the same as my discounted rate for him. But the place is spacious and is a townhouse. He is highly unhappy. He calls it is a money grab. He is saying that he is under duress if he decides to stay as summer is a busy season for him. Well, the contract ends end of summer and the rate increase letter went out prior to that. There is no rent control in my state. And in my state I do not even have to send rent increase letters. This tenant makes 300K in income. I have been nice responding to his texts but it makes me think if I actually want to keep dealing with him. He states that my property is not worth the increase. Well, my property is in such a location and condition that it is difficult to find anything similar. It is also a business. Any one wants to share a relevant experience? Please do not bother to send me points on how to write letters to tenants; mine was very much to a point with all the data, comparison photos, prices....I just think if as a business person himself he does not value my business why should I renew the contract especially now he says he is under duress.

Kar Sun

OP

Member since 2021 · 402 posts · 277 votes

4y

Quote from @Branden Yang:

Why are you basing your investments on other people? Unless your property is bad, I would just raise it twice if he complains. Go get a property manager or something because I don't know why you have a single-unit building. You could probably get a 4-8plex with the money you could get from your townhouse.

My goal is to get a passive income I can accept with a low maintenance property and low maintenance tenant. I have no plants to sell the property and will most likely keep it in the family. It is not my goal to upset the tenant and to raise it so high that it is out of reach. He is financially able to afford it plus the market demands it. I discounted my rate since he is a long term tenant. I am also a small time investor. I do not think I can do more units at this point and I am good with that decision. I am a first generation American and started out pretty late with investing. But better late than never. I also have a full time job.

1 Reply

Peter Albanese

Springfield, IL · Member since 2009 · 33 posts · 31 votes

4y

Maybe its time to just give them notice of the rent increase when the lease expires and give them time to find another place.

1 Reply

Bruce WoodruffPro Member

Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes

4y

You know what to do here. This is a business and you are additionally being kind enough to provide him with a roof over his head.

Stick to your guns and get a better tenant. I can't believe all the tenant whining nowadays.....

3 Reply

Branden Yang

Member since 2022 · 42 posts · 10 votes

4y

Quote from @Kar Sun:

Quote from @Branden Yang:

Why are you basing your investments on other people? Unless your property is bad, I would just raise it twice if he complains. Go get a property manager or something because I don't know why you have a single-unit building. You could probably get a 4-8plex with the money you could get from your townhouse.

My goal is to get a passive income I can accept with a low maintenance property and low maintenance tenant. I have no plants to sell the property and will most likely keep it in the family. It is not my goal to upset the tenant and to raise it so high that it is out of reach. He is financially able to afford it plus the market demands it. I discounted my rate since he is a long term tenant. I am also a small time investor. I do not think I can do more units at this point and I am good with that decision. I am a first generation American and started out pretty late with investing. But better late than never. I also have a full time job.

Well, if you can find another low maintenance property that cashflows more, would you sell it? Getting a low maintenance tenant is also good, but unless your income is 1.5x or 2x your expenses, I recommend getting more properties, but with higher unit counts. If you got a good property manager, you wouldn't worry about the property, instead you can just retire easily. If you have a full-time job, just spend an hour or two finding deals. I'll find you one if you want to be a partner.

1 Reply

Jay HinrichsBusiness Member

Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes

4y

not sure why you have to go to all that length to justify your position.

in my mind someone making 300k a year is a complete idiot anyway if they are renting instead of buying specially since your units are only 500k.. thats crazy not to buy and to throw money away on rent.. but thats his problem not yours and maybe your really doing him a favor and he will realize he is a fool not to put himself in this position as he could be an owner with locked in payment and no one telling him what to do with the property or how nice it is etc ec.

rents are softening in some markets right now and in others still rising.. I am sure you will get it worked out.

myself tenants that never call me I leave them alone but admittedly maximizing rents to me are not a priority when rents are a very minor part of what we do.

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4 Reply

Kar Sun

OP

Member since 2021 · 402 posts · 277 votes

4y

Quote from @Jay Hinrichs:

not sure why you have to go to all that length to justify your position.

in my mind someone making 300k a year is a complete idiot anyway if they are renting instead of buying specially since your units are only 500k.. thats crazy not to buy and to throw money away on rent.. but thats his problem not yours and maybe your really doing him a favor and he will realize he is a fool not to put himself in this position as he could be an owner with locked in payment and no one telling him what to do with the property or how nice it is etc ec.

rents are softening in some markets right now and in others still rising.. I am sure you will get it worked out.

myself tenants that never call me I leave them alone but admittedly maximizing rents to me are not a priority when rents are a very minor part of what we do.

He is a divorced man that has to pay alimony and child support.

At this point in his life he does not need to buy.

But he does want to have an upscale property to rent.

He is also a public figure that does a lot of travel.

0 Reply

Kar Sun

OP

Member since 2021 · 402 posts · 277 votes

4y

Quote from @Branden Yang:

Quote from @Kar Sun:

Quote from @Branden Yang:

Why are you basing your investments on other people? Unless your property is bad, I would just raise it twice if he complains. Go get a property manager or something because I don't know why you have a single-unit building. You could probably get a 4-8plex with the money you could get from your townhouse.

My goal is to get a passive income I can accept with a low maintenance property and low maintenance tenant. I have no plants to sell the property and will most likely keep it in the family. It is not my goal to upset the tenant and to raise it so high that it is out of reach. He is financially able to afford it plus the market demands it. I discounted my rate since he is a long term tenant. I am also a small time investor. I do not think I can do more units at this point and I am good with that decision. I am a first generation American and started out pretty late with investing. But better late than never. I also have a full time job.

Well, if you can find another low maintenance property that cashflows more, would you sell it? Getting a low maintenance tenant is also good, but unless your income is 1.5x or 2x your expenses, I recommend getting more properties, but with higher unit counts. If you got a good property manager, you wouldn't worry about the property, instead you can just retire easily. If you have a full-time job, just spend an hour or two finding deals. I'll find you one if you want to be a partner.

No, I would not sell the property. It has doubled in value and there is no way I can find something like this now. If I had to buy now my rent would be very high. The property cash flows but I need to bring it to market and I have some expenses for this property that need to be covered.

0 Reply

Jay HinrichsBusiness Member

Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes

4y

Quote from @Kar Sun:

Quote from @Jay Hinrichs:

not sure why you have to go to all that length to justify your position.

in my mind someone making 300k a year is a complete idiot anyway if they are renting instead of buying specially since your units are only 500k.. thats crazy not to buy and to throw money away on rent.. but thats his problem not yours and maybe your really doing him a favor and he will realize he is a fool not to put himself in this position as he could be an owner with locked in payment and no one telling him what to do with the property or how nice it is etc ec.

rents are softening in some markets right now and in others still rising.. I am sure you will get it worked out.

myself tenants that never call me I leave them alone but admittedly maximizing rents to me are not a priority when rents are a very minor part of what we do.

He is a divorced man that has to pay alimony and child support.

At this point in his life he does not need to buy.

But he does want to have an upscale property to rent.

He is also a public figure that does a lot of travel.

how do you know he does not need to buy sounds like he certainly needs to buy that way he would not now be facing a 400.00 a month increase to pay for shelter.. all these folks that rented through the super low interest rates if they had half way decent credit and incomes that did not buy sure missed the boat all this talk of renting is better blah blah blah.. its just throwing money down the toilet paying off someone else's home and nothing to show for it at the end of the day.. then being subject to the whims of the landlord LOL.. But then again I bought my first house when I was 19 and have never rented .. owned hundreds of rentals though and boy I just sit there and look at these people paying 1k a month rent for a house they can buy for 60k and have a payment of 250.oo never quite got it.. and buying in good solid markets in the US that are actually in demand you get rich on appreciation while your tenant pays your houses off. But then again I am building new construction in 3 markets and my sole job is to steal great tenants from landlords and make them proud owners LOL.. although to be fair most of my product is 2 nd or 3rd move ups. I signed on one today sale price 750k and the folks were putting 400k down from what i saw on the Hud interest rates were not affecting them.. But I go back to why are you even trying to justify yourself its your property do what you want no need to go to all this work proving comps etc etc.. at least I would not do that.

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2 Reply

Matthew CrivelliBusiness Member

Lender · MA · Member since 2021 · 1k+ posts · 1k+ votes

4y

Quote from @John Underwood:

I would not do a $400 increase to a good tenant. I'd do maybe $75 to $100 at most in one year.

I would agree with you! If you have someone renting your home that has really been great, its not worth the risk of losing them. You can go a little slower and keep them. This isn't a good tactic if you are desperate for the increase but I don't think its good to be in that type of way anyways.

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Peter Morgan

Rental Property Investor · West Des Moines, IA · Member since 2018 · 447 posts · 64 votes

4y

@Joe Villeneuve

Cost increases can suddenly come in many forms. Increasing property taxes or home insurance for example. I have seen in some places property taxes increasing as much as 30 to 40 percent suddenly. It may not be feasible always feasible to pass on this suddenly increased costs to tenants, in these situations would it make sense to sell and move to a market with lower property taxes? instead of holding on to a property where tenants shy away due to increasing rents.

1 Reply

Kar Sun

OP

Member since 2021 · 402 posts · 277 votes

4y

Quote from @Matthew Crivelli:

Quote from @John Underwood:

I would not do a $400 increase to a good tenant. I'd do maybe $75 to $100 at most in one year.

I would agree with you! If you have someone renting your home that has really been great, its not worth the risk of losing them. You can go a little slower and keep them. This isn't a good tactic if you are desperate for the increase but I don't think its good to be in that type of way anyways.

For me it is a good tactic because my rent is way, way, way under market value. I must bring it up to the market. Why not ask a gas station owner to lower the price? or your MD, or dentist, or your veterinarian? How about your trash collector? How about going to a grocery story and asking them why food went up at least 30% and why they do not want to keep it at 2019 prices? While you are at it ask your auto body shop owner why they charge $2000 to replace a bumper on a basic car that used to be $600? Try that and then we will chat. The landlord is not the one who creates price hikes. We are simply on the receiving end. Ask your politicians to stop lying about 8% inflation. It is at least 30%.

1 Reply

Kar Sun

OP

Member since 2021 · 402 posts · 277 votes

4y

Quote from @Jay Hinrichs:

Quote from @Kar Sun:

Quote from @Jay Hinrichs:

not sure why you have to go to all that length to justify your position.

in my mind someone making 300k a year is a complete idiot anyway if they are renting instead of buying specially since your units are only 500k.. thats crazy not to buy and to throw money away on rent.. but thats his problem not yours and maybe your really doing him a favor and he will realize he is a fool not to put himself in this position as he could be an owner with locked in payment and no one telling him what to do with the property or how nice it is etc ec.

rents are softening in some markets right now and in others still rising.. I am sure you will get it worked out.

myself tenants that never call me I leave them alone but admittedly maximizing rents to me are not a priority when rents are a very minor part of what we do.

He is a divorced man that has to pay alimony and child support.

At this point in his life he does not need to buy.

But he does want to have an upscale property to rent.

He is also a public figure that does a lot of travel.

how do you know he does not need to buy sounds like he certainly needs to buy that way he would not now be facing a 400.00 a month increase to pay for shelter.. all these folks that rented through the super low interest rates if they had half way decent credit and incomes that did not buy sure missed the boat all this talk of renting is better blah blah blah.. its just throwing money down the toilet paying off someone else's home and nothing to show for it at the end of the day.. then being subject to the whims of the landlord LOL.. But then again I bought my first house when I was 19 and have never rented .. owned hundreds of rentals though and boy I just sit there and look at these people paying 1k a month rent for a house they can buy for 60k and have a payment of 250.oo never quite got it.. and buying in good solid markets in the US that are actually in demand you get rich on appreciation while your tenant pays your houses off. But then again I am building new construction in 3 markets and my sole job is to steal great tenants from landlords and make them proud owners LOL.. although to be fair most of my product is 2 nd or 3rd move ups. I signed on one today sale price 750k and the folks were putting 400k down from what i saw on the Hud interest rates were not affecting them.. But I go back to why are you even trying to justify yourself its your property do what you want no need to go to all this work proving comps etc etc.. at least I would not do that.

I know because he told me so a little while back. Did I not say I like to have a relationship with my tenants? Fairness is not a natural right. Sorry, I found your writing hard to read so I cannot really respond appropriately.

0 Reply

Michael Deering

Rental Property Investor · Lehigh Valley, PA · Member since 2017 · 200 posts · 191 votes

4y

You've gone above and beyond. One of the few things worse than losing a great tenant is losing money in your business.

5 Reply

Bruce WoodruffPro Member

Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes

4y

I would feel bad for this poor tenant, but I'm too busy enjoying a good glass of scotch....

5 Reply

Matt M.

Specialist · Easton, PA · Member since 2018 · 1k+ posts · 2k+ votes

4y

Quote from @Kar Sun:

Quote from @Donna M.:

I meant the lease may say he has to notify you in writing if he plans to pay the higher rent and stay 60 days prior to the end of the lease term.

Yes, he has to return a form to me by July 1 and either accept it or decline it. The problem is that he texted me and said that if he accepts it will be under duress because he has to travel. Duress is a legal term. I do not want to have a tenant who stays under duress. I need to have a tenant who loves the property and enjoys living there. That is how I chose my tenants.

0 Reply

Jay HinrichsBusiness Member

Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes

4y

Quote from @Kar Sun:

Quote from @Jay Hinrichs:

Quote from @Kar Sun:

Quote from @Jay Hinrichs:

not sure why you have to go to all that length to justify your position.

in my mind someone making 300k a year is a complete idiot anyway if they are renting instead of buying specially since your units are only 500k.. thats crazy not to buy and to throw money away on rent.. but thats his problem not yours and maybe your really doing him a favor and he will realize he is a fool not to put himself in this position as he could be an owner with locked in payment and no one telling him what to do with the property or how nice it is etc ec.

rents are softening in some markets right now and in others still rising.. I am sure you will get it worked out.

myself tenants that never call me I leave them alone but admittedly maximizing rents to me are not a priority when rents are a very minor part of what we do.

He is a divorced man that has to pay alimony and child support.

At this point in his life he does not need to buy.

But he does want to have an upscale property to rent.

He is also a public figure that does a lot of travel.

how do you know he does not need to buy sounds like he certainly needs to buy that way he would not now be facing a 400.00 a month increase to pay for shelter.. all these folks that rented through the super low interest rates if they had half way decent credit and incomes that did not buy sure missed the boat all this talk of renting is better blah blah blah.. its just throwing money down the toilet paying off someone else's home and nothing to show for it at the end of the day.. then being subject to the whims of the landlord LOL.. But then again I bought my first house when I was 19 and have never rented .. owned hundreds of rentals though and boy I just sit there and look at these people paying 1k a month rent for a house they can buy for 60k and have a payment of 250.oo never quite got it.. and buying in good solid markets in the US that are actually in demand you get rich on appreciation while your tenant pays your houses off. But then again I am building new construction in 3 markets and my sole job is to steal great tenants from landlords and make them proud owners LOL.. although to be fair most of my product is 2 nd or 3rd move ups. I signed on one today sale price 750k and the folks were putting 400k down from what i saw on the Hud interest rates were not affecting them.. But I go back to why are you even trying to justify yourself its your property do what you want no need to go to all this work proving comps etc etc.. at least I would not do that.

I know because he told me so a little while back. Did I not say I like to have a relationship with my tenants? Fairness is not a natural right. Sorry, I found your writing hard to read so I cannot really respond appropriately.

ya two points one your tenant is an idiot to make 300k a year and still rent.

and you owe the tenant no explanation or at least I would not go to great lengths to justify anything i did with my property within the laws of the land. Spent to many years as a developer getting beat up by planning commissions and neighbors to give a flying you know what :)

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4 Reply

Kar Sun

OP

Member since 2021 · 402 posts · 277 votes

4y

Quote from @Jay Hinrichs:

Quote from @Kar Sun:

Quote from @Jay Hinrichs:

Quote from @Kar Sun:

Quote from @Jay Hinrichs:

not sure why you have to go to all that length to justify your position.

in my mind someone making 300k a year is a complete idiot anyway if they are renting instead of buying specially since your units are only 500k.. thats crazy not to buy and to throw money away on rent.. but thats his problem not yours and maybe your really doing him a favor and he will realize he is a fool not to put himself in this position as he could be an owner with locked in payment and no one telling him what to do with the property or how nice it is etc ec.

rents are softening in some markets right now and in others still rising.. I am sure you will get it worked out.

myself tenants that never call me I leave them alone but admittedly maximizing rents to me are not a priority when rents are a very minor part of what we do.

He is a divorced man that has to pay alimony and child support.

At this point in his life he does not need to buy.

But he does want to have an upscale property to rent.

He is also a public figure that does a lot of travel.

how do you know he does not need to buy sounds like he certainly needs to buy that way he would not now be facing a 400.00 a month increase to pay for shelter.. all these folks that rented through the super low interest rates if they had half way decent credit and incomes that did not buy sure missed the boat all this talk of renting is better blah blah blah.. its just throwing money down the toilet paying off someone else's home and nothing to show for it at the end of the day.. then being subject to the whims of the landlord LOL.. But then again I bought my first house when I was 19 and have never rented .. owned hundreds of rentals though and boy I just sit there and look at these people paying 1k a month rent for a house they can buy for 60k and have a payment of 250.oo never quite got it.. and buying in good solid markets in the US that are actually in demand you get rich on appreciation while your tenant pays your houses off. But then again I am building new construction in 3 markets and my sole job is to steal great tenants from landlords and make them proud owners LOL.. although to be fair most of my product is 2 nd or 3rd move ups. I signed on one today sale price 750k and the folks were putting 400k down from what i saw on the Hud interest rates were not affecting them.. But I go back to why are you even trying to justify yourself its your property do what you want no need to go to all this work proving comps etc etc.. at least I would not do that.

I know because he told me so a little while back. Did I not say I like to have a relationship with my tenants? Fairness is not a natural right. Sorry, I found your writing hard to read so I cannot really respond appropriately.

ya two points one your tenant is an idiot to make 300k a year and still rent.

and you owe the tenant no explanation or at least I would not go to great lengths to justify anything i did with my property within the laws of the land. Spent to many years as a developer getting beat up by planning commissions and neighbors to give a flying you know what :)

I do not disagree. All these commissions are nothing more but corrupt bodies that suck the money out of the people.They are not on people side. I am sure they were intended with good thoughts at the start but all these commissions need to be disassembled at this point.

1 Reply

Kar Sun

OP

Member since 2021 · 402 posts · 277 votes

4y

Quote from @Theresa Harris:

What is their rent? $400 is a big increase. Of course $400 on a $2500 rent is different than on a $1000 rent. It doesn't matter how much he makes, what matters is what comparable units rent for. If he's a good tenant and pays on time, keeping it a bit under market is not a bad thing.

Gas prices have little to do with rent. Have insurance, taxes or other costs gone up? Are other units renting for more than they did a year ago?

How much he makes is super important. Are you not using your tenant's income as a variable to decide whether they are qualified to live at your property or not or not? What is important to you? Have you had a chance to read what I wrote when I stated that my rent is waaaaay below the current market rate? In this "new" economy everything matters and must be taken into the account. I am not the one causing all this destruction of a dollar as a currency.

1 Reply

JD MartinBusiness Member

Moderator

Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 17k+ votes

4y

My thoughts:

1. You set the table for expectations. A $400 increase in one year on places below 2k is over 20% rent hike. I've been doing this a long time and I don't know too many landlords that would present that to a current, paying tenant. Naturally you can do what you want - it's your property - but expecting the tenant to see your point of view on a rent increase that high is laughable.

2. Don't be surprised if you find "the market rate" isn't what you think it is. This is one of those BS terms that's always bandied about as if there's some grand council determining what prices should be. "Market rate" is an always moving target, either up or down, because "the market" is only what someone else is willing to pay for what you have and you won't know what they are willing to pay until you offer it up and find someone to pay it. It's pretty easy to determine a range for things - perhaps 95% of all places like yours rent between $1600-2000, for example - but there's no exact science or figure. You might feel like you're still $200 below "market rate" but you have no way of knowing this for sure other than to kick this tenant out and try to rent it for the extra $200.

3. If you are so certain that you are below market rate, you should kick this tenant out and rent it at what you believe is market rate. There's no good reason to leave money sitting on the table, especially now that you have an adversarial relationship with the current tenant.

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Kar Sun

OP

Member since 2021 · 402 posts · 277 votes

4y

Quote from @JD Martin:

My thoughts:

1. You set the table for expectations. A $400 increase in one year on places below 2k is over 20% rent hike. I've been doing this a long time and I don't know too many landlords that would present that to a current, paying tenant. Naturally you can do what you want - it's your property - but expecting the tenant to see your point of view on a rent increase that high is laughable.

2. Don't be surprised if you find "the market rate" isn't what you think it is. This is one of those BS terms that's always bandied about as if there's some grand council determining what prices should be. "Market rate" is an always moving target, either up or down, because "the market" is only what someone else is willing to pay for what you have and you won't know what they are willing to pay until you offer it up and find someone to pay it. It's pretty easy to determine a range for things - perhaps 95% of all places like yours rent between $1600-2000, for example - but there's no exact science or figure. You might feel like you're still $200 below "market rate" but you have no way of knowing this for sure other than to kick this tenant out and try to rent it for the extra $200.

3. If you are so certain that you are below market rate, you should kick this tenant out and rent it at what you believe is market rate. There's no good reason to leave money sitting on the table, especially now that you have an adversarial relationship with the current tenant.

Thanks for sharing your thoughts.

1. Your opinion is your opinion. If the tenant does not see how much they have to pay for gas nowadays, cannot see the staggering inflation, and not able to see that the similar properties are renting close to a 3k that is sort of not my problem. The demand for my property is high.

2. Your assumption is wrong. I researched the market before I sent my letter. Even with my hike I am still below the current rental prices. Have you actually read my posts? The demand for my property is high.

3. This is a business. I will find someone else if I have to. I also have a full time job so I am not worried to search for the right tenant. I just need one that appreciates the service and the place I provide. I am not holding anyone to stay. The tenant chose to be emotional and upset. But this is business. Nothing personal. I call the shots in this case. Not the tenant.

2 Reply

Joe VilleneuvePro Member

Plymouth, MI · Member since 2013 · 13k+ posts · 19k+ votes

4y

Quote from @Peter Morgan:

@Joe Villeneuve

Cost increases can suddenly come in many forms. Increasing property taxes or home insurance for example. I have seen in some places property taxes increasing as much as 30 to 40 percent suddenly. It may not be feasible always feasible to pass on this suddenly increased costs to tenants, in these situations would it make sense to sell and move to a market with lower property taxes? instead of holding on to a property where tenants shy away due to increasing rents.

Yes

0 Reply

Henry T.

Member since 2022 · 1k+ posts · 1k+ votes

4y

I had one for 15 years. Fantastic tenant and person. But property taxes became so out of control I had to do a significant raise. I still kept her under market, only a little. It was a 22 percent raise. She immediately sent notice that she would be leaving. Her grown kids were still living there, one with baby. I think she took it as an opportunity to say bye to her kids, and for them to get it together. I accepted the possiblility that she would leave, giving me the opportunity to do a much needed rehab. After the rehab I was able to increase the rent 75 percent. Even though the place looked like crap and there was some damage, and she made no effort to clean, I didn't hesitate to return the damage deposit in full. I hated to do that increase on her, but I had no choice. I could not take these increases any longer and do nothing. Like someone said, If I had often raised by a little, consistantly, maybe she'd still be there. But 15 years of no paint, old carpet, etc, is not good. But it all worked out for the best in my case. And really, I think it was an excuse that helped her get out of her kids bumming off of her. All None of my business of course, but I hope she's doing well. I don't know if this info helps. I'm more strictly business these days. These were the days when your lease was one page, and you were able to have an understanding with your tenant. I think today is awful. Tenants unions and city councils are all about how to screw your landlord, and my 30 page lease reflects all of that nonsense. I miss those old days before "just cause', there's nothing "just" about it if you're the owner. Protect yourself. Raise regularly. Don't explain or give any info that can be used against you. Today it's Shut up and do your job.

3 Reply

Joe VilleneuvePro Member

Plymouth, MI · Member since 2013 · 13k+ posts · 19k+ votes

4y

Quote from @Kar Sun:

Quote from @Branden Yang:

Quote from @Kar Sun:

Quote from @Branden Yang:

Why are you basing your investments on other people? Unless your property is bad, I would just raise it twice if he complains. Go get a property manager or something because I don't know why you have a single-unit building. You could probably get a 4-8plex with the money you could get from your townhouse.

My goal is to get a passive income I can accept with a low maintenance property and low maintenance tenant. I have no plants to sell the property and will most likely keep it in the family. It is not my goal to upset the tenant and to raise it so high that it is out of reach. He is financially able to afford it plus the market demands it. I discounted my rate since he is a long term tenant. I am also a small time investor. I do not think I can do more units at this point and I am good with that decision. I am a first generation American and started out pretty late with investing. But better late than never. I also have a full time job.

Well, if you can find another low maintenance property that cashflows more, would you sell it? Getting a low maintenance tenant is also good, but unless your income is 1.5x or 2x your expenses, I recommend getting more properties, but with higher unit counts. If you got a good property manager, you wouldn't worry about the property, instead you can just retire easily. If you have a full-time job, just spend an hour or two finding deals. I'll find you one if you want to be a partner.

No, I would not sell the property. It has doubled in value and there is no way I can find something like this now. If I had to buy now my rent would be very high. The property cash flows but I need to bring it to market and I have some expenses for this property that need to be covered.

All the more reason to sell. Your property is bleeding money with every dollar increase in property value (and thus equity). As your equity increases in "face value", it decreases in "actual value"...and loses potential cash flow by not maximizing the buying power of your equity.

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Kar Sun

OP

Member since 2021 · 402 posts · 277 votes

4y

Quote from @Joe Villeneuve:

Quote from @Kar Sun:

Quote from @Branden Yang:

Quote from @Kar Sun:

Quote from @Branden Yang:

Why are you basing your investments on other people? Unless your property is bad, I would just raise it twice if he complains. Go get a property manager or something because I don't know why you have a single-unit building. You could probably get a 4-8plex with the money you could get from your townhouse.

My goal is to get a passive income I can accept with a low maintenance property and low maintenance tenant. I have no plants to sell the property and will most likely keep it in the family. It is not my goal to upset the tenant and to raise it so high that it is out of reach. He is financially able to afford it plus the market demands it. I discounted my rate since he is a long term tenant. I am also a small time investor. I do not think I can do more units at this point and I am good with that decision. I am a first generation American and started out pretty late with investing. But better late than never. I also have a full time job.

Well, if you can find another low maintenance property that cashflows more, would you sell it? Getting a low maintenance tenant is also good, but unless your income is 1.5x or 2x your expenses, I recommend getting more properties, but with higher unit counts. If you got a good property manager, you wouldn't worry about the property, instead you can just retire easily. If you have a full-time job, just spend an hour or two finding deals. I'll find you one if you want to be a partner.

No, I would not sell the property. It has doubled in value and there is no way I can find something like this now. If I had to buy now my rent would be very high. The property cash flows but I need to bring it to market and I have some expenses for this property that need to be covered.

All the more reason to sell. Your property is bleeding money with every dollar increase in property value (and thus equity). As your equity increases in "face value", it decreases in "actual value"...and loses potential cash flow by not maximizing the buying power of your equity.

Thanks for the advice. At this time I have no plans to sell. The property is in a great location, great shape, updated, low maintenance and near my residence. Too many pluses. It is am A class property. It does cash flow and I can use it to acquire more RE since I have the equity in it. I prefer to use the other people money and not worried about debt on the invested properties.

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Joe VilleneuvePro Member

Plymouth, MI · Member since 2013 · 13k+ posts · 19k+ votes

4y

Quote from @Henry T.:

I had one for 15 years. Fantastic tenant and person. But property taxes became so out of control I had to do a significant raise. I still kept her under market, only a little. It was a 22 percent raise. She immediately sent notice that she would be leaving. Her grown kids were still living there, one with baby. I think she took it as an opportunity to say bye to her kids, and for them to get it together. I accepted the possiblility that she would leave, giving me the opportunity to do a much needed rehab. After the rehab I was able to increase the rent 75 percent. Even though the place looked like crap and there was some damage, and she made no effort to clean, I didn't hesitate to return the damage deposit in full. I hated to do that increase on her, but I had no choice. I could not take these increases any longer and do nothing. Like someone said, If I had often raised by a little, consistantly, maybe she'd still be there. But 15 years of no paint, old carpet, etc, is not good. But it all worked out for the best in my case. And really, I think it was an excuse that helped her get out of her kids bumming off of her. All None of my business of course, but I hope she's doing well. I don't know if this info helps. I'm more strictly business these days. These were the days when your lease was one page, and you were able to have an understanding with your tenant. I think today is awful. Tenants unions and city councils are all about how to screw your landlord, and my 30 page lease reflects all of that nonsense. I miss those old days before "just cause', there's nothing "just" about it if you're the owner. Protect yourself. Raise regularly. Don't explain or give any info that can be used against you. Today it's Shut up and do your job.

When a flight attendant is giving instructions for emergency just before takeoff, and they start to talk about the oxygen mask, why do they say to put yours on first...then your children? Same reasoning applies here.

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Tenant is unhappy with the rent increase

Tenant is unhappy with the rent increase

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