Tenant Rent Increases in Alpharetta
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James JonesPro Member
Investor · Collierville, TN 38017 · Member since 2017 · 589 posts · 445 votesFor good long-term tenants I keep increases modest, usually 3-5% a year, even if market rent is higher. A reliable tenant who pays on time and takes care of the place is worth more than squeezing every dollar and risking a turnover.
That said, I do check market comps every renewal. If a unit has drifted way below market, I'll do a bigger bump but give plenty of notice and sometimes phase it over two renewals so it doesn't feel like a shock. I manage rental property in Memphis too, and the same approach holds up there, different market, but the logic of retention over maximization travels.
The math that keeps me grounded: one vacancy plus turn costs (cleaning, paint, lost rent, re-leasing) usually wipes out a couple years of aggressive increases. Curious what others in Alpharetta are seeing on the comp side right now though.
5 Replies
- 4moStephen QuesinberryBusiness MemberReal Estate Agent · Cumming, GA · Member since 2016 · 226 posts · 157 votes
Hey Joe, I’m an owner in a few different submarkets: Forsyth just north of there, Gainesville, Athens, Commerce, so not specifically Alpharetta. I’d say it really depends on the asset and location. It’s all situational based on current rents versus true market rents.
As a general rule of thumb, my preference is to prioritize occupancy and resident retention. Keeping a property slightly under market can actually be a strong strategy because residents don’t feel pressure to leave, and vacancy plus turn costs are usually your biggest expense.
That being said, if I’m materially below market, I’ll be more aggressive on increases. I usually try to find a balance where the resident still feels they’re getting fair value while the property continues moving toward market over time.
I also think consistency matters. Smaller steady increases tend to be received much better than trying to make a huge jump all at once after years of no movement.
Cornerstone Real Estate Partners - Real Estate Broker · Nashville, TN · Member since 2022 · 163 posts · 87 votes4mo
Joe, good question. I manage rental properties in Nashville so I can share what is working for us on renewals and how we think about the rent increase decision. The principles apply across markets even though the specific numbers will vary between Alpharetta and Nashville.
Our general approach is to increase rents 3 to 5 percent annually on long term tenants, but we never set that number in a vacuum. Every renewal starts with a current market analysis. We pull comparable active listings within a half mile radius, look at what similar units rented for in the last 60 to 90 days, and compare that to where our tenant is currently priced. That tells us the gap between what they are paying and what the market would bear with a new tenant.
Here is the math that drives the decision. A vacancy costs you the lost rent during turnover, the make ready expenses to get the unit rent ready again, the marketing cost, and the screening and onboarding time. In Nashville right now, a typical turnover on a single family rental runs $3,000 to $5,000 when you add up paint, cleaning, minor repairs, and 2 to 4 weeks of vacancy. So if you are debating between keeping a good tenant at $50 below market or turning the unit for full market rate, the turnover cost usually makes the rent increase the smarter play as long as it is reasonable.
What I would not do is hit a long term tenant with a $200 per month increase all at once just because the market moved. If the gap between their current rent and market rate has gotten wide, spread the increase over two renewal cycles. A $100 increase now and another $100 next year is easier for the tenant to absorb and dramatically reduces the chance they leave over it.
Timing matters too. Give your tenant 60 to 90 days notice before the lease expiration. The earlier you communicate, the more time they have to budget for it, and the less likely it feels like a surprise. We include a brief explanation with every renewal offer. Something along the lines of property taxes increased by this percentage, insurance went up by this amount, and market rents in the area have adjusted. Most reasonable tenants understand that costs go up and they expect some annual adjustment.
The tenants you want to keep are the ones who pay on time, take care of the property, and communicate when there is an issue. For those tenants, I would rather be slightly below market and keep them for five years than push to the absolute top of market and risk losing them over $25 a month. Tenant retention is the single most underrated factor in long term rental profitability.
One more thing. Check your state and local laws on rent increase notice requirements. Georgia and Tennessee do not have rent control, but there are still statutory notice periods you need to follow for month to month tenants versus lease renewals. Make sure your increase is legally compliant before you send the renewal letter.
- 4moJames JonesPro MemberInvestor · Collierville, TN 38017 · Member since 2017 · 589 posts · 445 votes
For good long-term tenants I keep increases modest, usually 3-5% a year, even if market rent is higher. A reliable tenant who pays on time and takes care of the place is worth more than squeezing every dollar and risking a turnover.
That said, I do check market comps every renewal. If a unit has drifted way below market, I'll do a bigger bump but give plenty of notice and sometimes phase it over two renewals so it doesn't feel like a shock. I manage rental property in Memphis too, and the same approach holds up there, different market, but the logic of retention over maximization travels.
The math that keeps me grounded: one vacancy plus turn costs (cleaning, paint, lost rent, re-leasing) usually wipes out a couple years of aggressive increases. Curious what others in Alpharetta are seeing on the comp side right now though.
- Real Estate Broker · Atlanta · Member since 2024 · 1k+ posts · 604 votes3mo
@Joe Mark Alpharetta is usually a high demand market, so I would first look at the current rental comps to determine what, if any, the rent increase should be. However, if you already have good tenants who pay on time and take care of the property, tenant retention would be my first priority.
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