Rent increase pacing
Hello all,
We have a few units in our small multi-family portfolio that we are considering raising rents outside of tenant turnover. I'm interesting in hearing from the collective experience on here if it's more palatable to the typical tenant to have their rent raised by say $5 or $10 each year, or at least double that every other year?
In other words, are small, more frequent increases met with less resistance than larger jumps at longer intervals?
Here in NY, our taxes and insurance (as well as other expenses) go up by a not insignificant amount every year, and we have to be mindful of this on our long-term tenants, lest our cash flow erode away. I know the cost of tenant turnover is a cash flow killer, but if we neglect minor rent increases to keep up with expenses, will the "sticker shock" of a big hike every other year create more turnover than a minor yearly increase?
Locally, it's not uncommon for landlords of C properties (like ours) to not raise rents on tenants during their occupancy, and to hike rates only upon turnover. All our tenants are on month-to-month agreements.
Thanks in advance!