Good tenant in underpriced unit
Hello,
I have a multifamily house in NJ and one of the units is a 3 bedroom apt that has been occupied by the same tenant for about 7 years. The apt is rented for about 1400 and the tenant takes care of putting out trash to curb for whole building. The market rent today is probably over 2k. What would you do with a good tenant that has such an underpriced unit? I don't have the stomach to just raise the rent $600 in 1 year.
Most Popular Reply
Just because a tenant is solid doesn't mean they shouldn't be closer to market value rent. Are you afraid that if you raise the rent, they will start to trash the place? You have to break down the numbers for them so they understand.
"Look, Steve the tenant. Over the past 7 years my insurance has increased 65% and property taxes another 20%. I need to raise your rent X amount in order for me to continue to be profitable. I hope you'll understand and if you can find a house of this caliber that is listed for less than what I am bumping you up to, then please bring it to me and I am willing to listen to what you find because you have been such a valued tenant to me over these past 7 years"