YoY Rent % increase

[Mani Swagath]

Hello,

How much should be the typical YoY % increase in rent for single family homes ? I hear 5%, is that a safe figure to use as general guideline ?

TIA

[JD Martin]

For good tenants, I allow them to re-up at the same rate for a second year with my approval. I'd rather foresake a few percentage points of rent in order to keep good people. By doing so, it also puts them slightly behind the rent curve (I'm already slightly below market anyway), so when the second year is up they have even less incentive to go somewhere else, assuming they still want to rent.

For poor renters, or a place that is just coming open due to normal attrition, I review the market and price/re-price accordingly. I may come down on rent if the neighborhood has deteriorated somewhat (hopefully not, and I'll likely sell if it goes that way), or go up by double-digit percentages if I am too far out of whack in an area. So I really don't think there's a formula here. If your market is overbuilt, and there are vacancies everywhere, what would lead you to believe that you can just tack 5% or similar on every year?