Raising Rent?
Ok so we are looking at a property where the current rent being charged is $325 per month. The going average for the area is $500-$550. Without using a property manager, purchase the property we would want to raise the rent to the average for the area. Can you tell me what the best processes you have found to be successful at this? Gradual increases? Instant increase?
Any help you can give would be greatly appreciated.
Thanks in advance!
Most Popular Reply
Some of what you can do may be dictated by law as well. If there is a rent control ordinance, you will be limited to a certain percentage increase every 12 months. The other thing to look at is the demand for units in the area where your property is. If it's in a desirable location, you will be able to get away with larger rent increases than something that is off the beaten path (depending on who your target market is).
If you were to increase rent by 10% annually, it would take you five years to get to market. If you are confident you could quickly re rent the unit, you may be better off giving them a big rent raise if it's legal. If you can get it rented within a month or so, you will come out ahead compared to your current situation.