How much do you increase the rent each year?

[Nathan Waters]

I'm sure this varies based on local market conditions, but how much are you typically increasing the rent by? I only do 12 month leases so its convenient to up the rent with each lease renewal. But what percentage does everyone else do? I'm looking at 2-3% as a target.

[Joe Splitrock]

@Nathan Waters I think this is driven by the local market rates. I watch Craigslist and Zillow to monitor rates. I generally keep my rate under market value to remove incentive to leave. If the tenant is good, I may not even raise rent. Vacancy and turnover costs are my largest expense. Raising rent will not guarantee someone moves, but it will cause them to shop around. Look at it this way, if your property rents for $1200 per month, one month of vacancy is the same as $100 lost per month over a year or $50 lost per month over two years. That doesn't include turn over costs or time to re-rent.