Do You Raise Rents Every Year? Why Or Why Not

[Randall Kates]

I am thinking about raising rent on a year old rehab that I have a tenant paying $1200 monthly for! I am thinking of charging $1225. He is a Foreign Exchange student who is in his Sophmore year so I am thinking of upping it every year thoughts?

[Bettina F.]

Yes!  Yes!  Yes!  I raise rents every year, on their anniversary.  I don't care if you are Mother Teresa, you are getting a rent raise notice.  Below market rents equals money lost forever.  The tenants are not going to appreciate the bargain you are giving them.  Eventually you be losing money so you will be forced to give a LARGE rent raise that will be seen as unfair by the tenants.

Train your tenants to expect a 3-5% rent raise (depending on your market) every year.  They will pay without a peep.