Raising Rents

[Eric Bilderback]

Curious what people thought about raising rents.  I and a partner have a 6 plex locked up and rents are under market big time.  They are currently at 505-550 and should be 650 or so.  Would you advice immediately raising to market or do it incrementally, or only raise a few units.  I am leaning toward bumping them up to 600 now and then in six months or so go all the why up to market.  Anybody with some opinion on this would be welcome to leave their advice.

Thanks,

[Colleen F.]

@Thomas S.having read many of your posts I  have seen you  are a hard nosed landlord that is how you choose to run your business, glad it works for you.  You are also are in Canada so for multi-year tenants your starting rent sets the bar for rent control limiting your ability to increase later.  I see where that also probably colors your perspective. I know if I could only get 2.3%  increase I would likely routinuely increase at that rate if the market would bear it. 

However people who don't do it your way aren't just a  "hobby landlord"   The current poster is talking about how to raise to market not IF they should raise to market. There are good business reasons to control when you raise rent to market and how you do it.  Maybe they want short term to  control the number of units with vacancy, maybe they want to see which tenants they should keep. Remember market means people who can afford the place but are annoyed/ unhappy with your management will  also leave.   In my area market rent and the tenant pool is less in some seasons so by avoiding a vacancy at certain time I actually get more rent.  (my area is also not a huge city).

I agree below market rent doesn't do you or the tenant any  favors because it gives people a false sense of what they can afford and your business isn't optimally run.  However using the way you roll in increases as a strategy doesn't by definition make people a hobby landlord.....