Rent Increase 2023??

Question

I am going into my first lease renewal and wondering how many are increasing rent from 2022-2023?

I’m not expecting the tenant to stay more than 2-3 years. Since it was a remodel right before they did have to deal with some issues at the beginning so I have decided to stay at current rates.

Theresa Harris · Answer

Where some of my rentals are there is a cap on increases, so I've been increasing it the max every year (which is $25-35 a month on rents of $1350-1600).  It is important to have annual increases in rent, even if they are small.  They add up over time and your costs are going up.  Plus it gets the tenant used to the increases.  Few people will move over a small increase.

Austin Cook · Answer

Thanks all for the advice. I have looked at rates and fall in the top percentile of what it could rent for based on the size and location. median rates may have raised but I haven't seen the max rents increase at the same amount with a compression toward the top end.

Ultimately, I'm getting, research your area making sure you are still competitive and watch the increase in expenses and raise accordingly.

Nathan Gesner · Answer

From what I've read, rent rates in Nashville have increased by more than 10% in the last year. You could increase your tenant 5% and they would still be below average.

Better yet, don't listen to statistics and averages. Study your market and really understand the value of your specific property, then charge what it's worth.

If you feel these tenants were burned by the early hiccups, let them move out and start fresh with someone else that won't experience the hiccups and is willing to pay market rate.

Dan H. · Answer

I raise every year except for some rents when their were Covid eviction moratoriums.  I let my best tenants pay a little under market rent, my mediocre tenants have rents near market, and when I have bad tenants, their rent increase puts their rent above market rate to encourage them to become someone else PIA.

My costs increase  constantly.  Insurance, maintenance/cap ex, property tax, miscellaneous cost all increase.   If I do not raise the rent my cash flow will decrease.  My goal, that I have been pretty good at achieving, is to increase cash flow.

Good luck

Mike Dymski · Answer

I increase based on market rates, not time.  I am increasing a lot right now...just to continue to catch up from the large market increases over the past few years.  Maintenance, materials, insurance, property taxes, and interest rates have all skyrocketed as well; so, need the revenue to cover them.  The government increased the money supply by Forty percent...the new "F" word...and this is the result.

Ray Hage · Answer

You definitely need to raise rents every year to an extent. If your are already at the max, maybe just a small increase just to keep up with the expenses. Most people won't move over a $25-50 rent increase. It is too much of a headache to move even if it is a small studio you're renting out.

Jay Thomas · Answer

It may be a good idea to consider keeping the rent at its current rate for the lease renewal, especially considering the initial issues the tenant faced due to the remodeling.

John Teachout · Answer

With existing tenants I always raise the rent but typically a small amount. Lately, we've had huge increases in property taxes due to higher tax assessments. Some of my properties have doubled or tripled in price according to the local tax assessor even if they haven't in reality. When taxes increase by over $100 per month it doesn't work to do a $20 per month rent increase. Also, when I increase the rent I typically provide an explanation. The crazy market has been difficult for everyone.

Eric Gerakos · Answer

Know what current rents are for rentals in your area and charge that. I raised my rents an average of $200.00 month this year to keep up with market increases. Operate your rentals like a business.

Rent Increase 2023??

Most Popular Reply