Increasing Rents without losing tenants

[Gerardo Dominguez]

Hello BP'ers!  I need your advice.  I have a tenant whose lease is expiring soon.  So far she's been a great tenant so I don't want to lose her.  However, I also want to increase the rent to get it closer to market rate.  She's currently @ $850 and market is ~$900.  I was thinking of raising her to $875; about 3% increase.

Based on your previous experience, is this a reasonable increase?  If not, how high should I increase the rent?

Thanks in advance!

[Kim Meredith Hampton]

@Gerardo Dominguez I would check out your local comps to see what the homes are renting. Good to have backup numbers ready when she balks. In Florida the rents have went up a lot over the last two years, so have had this same issue with quite a few of our tenants. I usually look at how the tenant takes care of the property, do they pay their rent on time, and have we had any complaints or problems? If all is good, I usually will work with them on the increase. Better to have a good tenant than a vacant property that we need to turn!