Money vs. Sanity (Raising the Rent)

[Rose Stuart]

We have two duplexes, self-manage. We just bought a third property to live in. Rents have been going up and up and up. (Supply is also going up, but not fast enough to stop the rate of rental increase.) Our longest-term tenants have been riding the wave and sticking it out with us...rent started at $625/mo in '09 and last year they signed at $900/mo. Our philosophy has always been to closely track market values for rents, let the chips fall where they may. But we are looking at another possible lease renewal with them...market research says we should be shooting for $950-$1000/ month, but we are still unpacking from our own personal move two weeks ago. I can't find basic household stuff. We've been burning the candle at both ends to get the unit we just moved out of ready to lease, and if I lose these awesome tenants because of a rental increase at this particular moment in time, it will be the last straw that sends me over the edge. There is still so much work we need to do to get our own place in good working order. I think I know what I need to do...suck up the potential lost rent and re-assess next year. But what do I tell myself in the meantime about missing out on the potential lost income?

[Kyle J.]

Another option to consider is just let the lease expire and go month-to-month. That way you can raise the rent whenever you want and when it’s more convenient for you and you’re in a better position to deal with a move out (if that’s what they decide to do). Either way, I’d vote to delay the rent increase if I were in your shoes. No sense losing your sanity over a relatively small amount of money. Some times you can’t put a price on peace of mind.