Just a little background, I signed this tenant in early spring. Since it was a slow time of year, I had the apartment advertised as a rent special of $950/month until August 1st, then renewing as a year lease at $1050/month. We signed a lease until August 1st with those terms, and she has been a great tenant. Always pays on time, easy communication, keeps the place clean, and even does some raking and landscaping.
My tenant has now asked if I could not increase rent, stating her yard work as a reason for keeping it the same. The yard work is negligible in my opinion. My first thought is to compromise and only increase her rent by $50 per month. What would you do? Would you stay firm with the original agreement or negotiate with a good tenant to keep them happy and in place?
I'd probably make some compromise. Quality tenants are the key to success. If you miss 1 month due to turn over you have eaten up 9.5 months of that increase and you may end up with a crap tenant.
As Jacob said, how much money would you lose with a turn over? If you told her you were doing the $100 discount for the summer, then she knew about it. If you only go up to $1000, then put it in writing what she has to do for yard work and follow up as that includes shoveling sidewalks, steps and driveways in the winter.
@Nicholas Rice keep her at the lower rate give her very clear expectations of the landscaping standards.
It’s a tough call. My guess: if you fail to negotiate, she’s wont leave.
One option, reduce 25 bucks so the tenant feels like, ‘they won.’
To your success!
@Jacob Sampson Great point and I completely agree, I'd hate to end up with a worse tenant if she decided to move.
Raise the rent as how you agreed to it. If the things she does isn’t needed or costly for you to hire out just state that to her.
Compromise is nice however. But I’d probably bump it to 1,050 to sign a year lease as agreed.
If it is a single family sje is suppossed to be doing the yard right?. I would stick with what you said. If she has added landscaping you could give her something for that and make it clear that anything she wants reimbursed should be pre approved. Spring is slow by you?
It depends on what your minimum cash flow goal is for that door and what your market will allow. If you are at it with where she is now, KEEP HER. ~ The End
@Nicholas Rice she signed a lease knowing it would go up, this isn't a random increase. She is probably asking because it never hurts to ask. Is the new rent market rate? Would it be very difficult getting a new tenant? I would tell them sorry but the rate is what is average for that apartment in that market and you cannot afford to pay the overhead at the lower rate
@Colleen F. It's a duplex, and there was no expectation of yard work. I questioned whether or not I should reimburse her after she asked if she could plant some flowers, but she never asked so I didn't think anymore about it. Also, I should clarify: I posted the apartment for rent in January and signed this tenant on March 1st. So more of a slow winter I guess.
Sounds all suggestions are worth considering.
@CJ M. That's a good way to look at it. The duplex does cash flow more than I planned.
@Bryan Devitt Its pretty close to market rate either way and she does have pets that I charge a monthly fee for so that makes up the difference too. Clean pets so far I should add, so I don't foresee major repairs down the road. I could easily fill the apartment with the leasing being up August 1st. That would be a great way to explain it about not being able to afford the overhead!
@Nicholas Rice with all the information provided, $50 wouldn’t break the bank. Sell it as a middle ground between $950 and $1050 with final amount at $1000. Quality tenants are key to success in this business. She clearly cares for the unit, so if I were you, I will consider the request, though partially and go for $1000 a month.
I really appreciate all of your responses, thanks for all of the great advice!
I ended up going with my gut and compromising to a $50 increase. She's happy and so am I. I'm pretty sure she would have stayed had I increased the full amount, so next time I think I'll harden up and stick with the original agreement.