Property Manager · Denver, CO · Member since 2021 · 667 posts · 587 votes
2y
We raise once per year, generally. Taxes, insurance, and HOA typically increase so raising rent to cover those costs is not unreasonable. Keeping the increase just under market to keep a good tenant usually works out fine too.
You should be raising the rent every year so that the tenants are used to it. Most of my rentals are in areas with caps on rent increases and it doesn't even keep up with inflation, so I raise it the max I can on most of my properties (which was 2% this year) because my expenses go up each year.
Investor · Austin, TX · Member since 2021 · 9k+ posts · 5k+ votes
2y
This depends on the scenario and what kind of investor you are.
I like to keep rents sustainable, not high enough to where I will have high turnover, not low enough to where I can easily replace a tenant for higher rent.
Property Manager · Denver, CO · Member since 2021 · 667 posts · 587 votes
2y
We raise once per year, generally. Taxes, insurance, and HOA typically increase so raising rent to cover those costs is not unreasonable. Keeping the increase just under market to keep a good tenant usually works out fine too.
Rental Property Investor · Los Angeles, CA · Member since 2017 · 2k+ posts · 5k+ votes
2y
I used to do it every 2-3 years. I never wanted to be that landlord that raises it $20 every year. I'd rather do $50 once every couple of years.
Then the rent increase moratorium came, rent control was instituted, mandatory lease renewals, security deposit reductions, inability to evict for things like unauthorized pets and people not on the lease living in the unit, all happening at a time when my taxes are going up, my permit fees are going up, my insurance is going up (or being non-renewed), and everything else is going up, and I'll likely be increasing rent around once a year.
The more the government "helps" renters, the more I need to offset that extra risk and costs.
We raise once per year, generally. Taxes, insurance, and HOA typically increase so raising rent to cover those costs is not unreasonable. Keeping the increase just under market to keep a good tenant usually works out fine too.
What you mean by just under market? like $50 below or a few hundreds ?
Property Manager · Lansdale, PA · Member since 2021 · 826 posts · 1k+ votes
2y
I would analyze the rental rates in your market annually at a minimum to get a feel for where you compare to other rentals. This doesn't mean you should raise rent every year as you need to factor in your tenants track record.
If you are under market value even with a good tenant, I would look to increase rent to catch up to the market. Thinking from both the landlord and tenant perspectives, a gradual increase annually would be preferred instead of a 10%+ increase the following year to further try and catch up with the market.
How often you will raise rent for you tenant and how much?
If you have a good tenant will you raise his rent if the market rent went up?
Will you raise his rent to market rent or keep it below market rent to incentive him to stay?
We always keep up with the market and we only rent to good tenants, so that isn't part of the equation for us. If you are keeping up with market rates and providing your tenants with good service, you are doing just fine. We don't discount rent just because a tenant pays on time- that's their job and we expect them to do it, just like they expect us to take reasonable care of maintenace.
Investor · Fairfax, VA · Member since 2015 · 1k+ posts · 801 votes
2y
taxes, insurance, and maintenance costs go up every year. Inflation is the real deal and it impacts residential the investors the most with these costs. You have to keep up with the market at the very least.
We raise once per year, generally. Taxes, insurance, and HOA typically increase so raising rent to cover those costs is not unreasonable. Keeping the increase just under market to keep a good tenant usually works out fine too.
What you mean by just under market? like $50 below or a few hundreds ?
It would depend on what the cash flow is and what the market looks like, but around $100 or more. However, every situation is different so I hesitate to give you a number.
How often you will raise rent for you tenant and how much?
If you have a good tenant will you raise his rent if the market rent went up?
Will you raise his rent to market rent or keep it below market rent to incentive him to stay?
We always keep up with the market and we only rent to good tenants, so that isn't part of the equation for us. If you are keeping up with market rates and providing your tenants with good service, you are doing just fine. We don't discount rent just because a tenant pays on time- that's their job and we expect them to do it, just like they expect us to take reasonable care of maintenace.
What about if tenants take care of maintenance and repairs and hardly ever call you? Will you still raise their rents to market value?
How often you will raise rent for you tenant and how much?
If you have a good tenant will you raise his rent if the market rent went up?
Will you raise his rent to market rent or keep it below market rent to incentive him to stay?
We always keep up with the market and we only rent to good tenants, so that isn't part of the equation for us. If you are keeping up with market rates and providing your tenants with good service, you are doing just fine. We don't discount rent just because a tenant pays on time- that's their job and we expect them to do it, just like they expect us to take reasonable care of maintenace.
What about if tenants take care of maintenance and repairs and hardly ever call you? Will you still raise their rents to market value?
We don't allow tenants to do any repairs or maintenance beyond raking leaves or weeding. Yep, always market rates 100% of the time, no favors. We offer excellent service and have no trouble finding and keeping good tenants. They're everywhere.
How often you will raise rent for you tenant and how much?
If you have a good tenant will you raise his rent if the market rent went up?
Will you raise his rent to market rent or keep it below market rent to incentive him to stay?
Yearly, each case is different, great tenant never hear from them, I leave them alone.
Even if market rents went up $1000 extra ?
I am unsure that full rent in Bob Steven’s Cleveland market is $1000. No way the rents are increasing that much.
Cost go up every year. My escrow (tax and insurance) has increased ~$200 on each property over the last couple of years. Maintenance/cap cost also have increased ~10% in the last year.
Most of our tenants received 10% increases. We gave one of our tenants a $800/month increase (more than 10% increase). They are a preferred tenant and we keep the preferred tenants slightly under market rent. They were already at our maximum below market rent so they had their rent raised the same as their market rent increased keeping them a few hundred dollars below market rent. They did not complain at all as they recognize their rent is below market. They also know my standard reply to unwarranted complaints is that they can leave at end of their lease. That usually limits complaints to legit items and not complaining for a market rent increase.
Most of our tenants will receive 10% rent increase this year.
Those that do not increase rent would be better off using a property manager. Managing tenants and their rent is a primary role of the property manager regardless if the property is self managed.
Rental Property Investor · San Francisco Bay Area · Member since 2022 · 1k+ posts · 1k+ votes
2y
It depends on the situation. For my multi-unit in the Bay Area, there's rent control so it's been raised every year to the maximum allowable percent. In previous years it was 1 to 2% a year. The max was 3.6% in 2023.
For SFH in Bay Area I raised it 10% this year - this is going into my second year renting it. They're very under market (renting to family members).
For SFH#1 in Indianapolis metro area, I kept the rent the same for 2 years in a row since they're great tenants. I raised it 6% this year because my property taxes went up significantly - I communicated this with them and they were fine with it. They're slightly under market. For SFH#2 my property management company generally raises it 3% a year.
Rental Property Investor · Grand Prairie, TX · Member since 2018 · 2k+ posts · 2k+ votes
2y
@Justin Brin
I raise rent every year. $50-$100. But keep them on average $100-$150 below market rent if they’re good tenants. Average rent is $1900 for my properties.
Used to be once a year. But it depends. Seattle passed a law that you must give 6 months notice before a rent increase. Now my Seattle properties get a rent increase every six months. Essentially they get a rent increase the day they're writing their last increase. I'm just following the law for Seattle. Other cities once a year.
I’m in Chicago and I raise my rents by 5% each year. I disclose this to my tenants when they move in so that it doesn’t come as a surprise and then remind them 2-months before their lease is up. I’ve never had any complaints.