Renter changes mind and stay at low rent?

General Landlording & Rental Properties
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Renter changes mind and stay at low rent?

Marci Stein
Rental Property Investor · New York, NY · Member since 2011 · 956 posts · 510 votes

My tenant of 2 years gave notice to vacate ,  so I offered her a lease at 900 a month , which is $200 less than her current rent. ( she’s alone now, and  I was afraid of a vacancy. ,) but She said no renewal . 
So i advertised the house and got many people interested for $1100 . 
but now because of Covid , she wants to stay  for 900  . 
she’s a great tenant , but I’ll lose 

$ 2400 a year  in rent with her lower rate 

Would it be unreasonable to ask her for more , maybe 1000, even though I sent her the new lease for 900? Nothing signed yet . 
Thanks 

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Robert Crowley
Rental Property Investor · Great Mills, MD · Member since 2014 · 21 posts · 13 votes
6y

She said "No" to your offer of reduced rent. I don't think you owe her anything after that, legally or ethically. Explain that after that, you advertised the place and have interest from people at her current rent. She can rent at the current rate and save the time, labor, and expense of moving.

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  • Stephen J DavisBusiness Member
    Rental Property Investor · Houston, TX · Member since 2017 · 529 posts · 467 votes
    6y

    You made a decision based on fear. "I was afraid of vacancy." Please do not ever do that again. Fear leads to the dark side. LOL. I would not let her stay. Get her out and get someone in there that will pay full rent. This will eliminate your fear when you see how easy it is to lease your property at full price. Good luck.

    1Reply
  • Theresa HarrisPro Member
    Member since 2019 · 15k+ posts · 11k+ votes
    6y

    @Marci Stein  What does your contract say?  Tell her the $900 rent was only a stop gap until she moved out on XXX day.  If she wants to extend her stay, the price will be $1100 which is market value and what you had planned to rent it for and advertized it at.

    0Reply
  • Daniel Y.
    Investor · Henderson, NV · Member since 2016 · 227 posts · 86 votes
    6y
    Originally posted by @Stephen J Davis:

    You made a decision based on fear. "I was afraid of vacancy." Please do not ever do that again. Fear leads to the dark side. LOL. I would not let her stay. Get her out and get someone in there that will pay full rent. This will eliminate your fear when you see how easy it is to lease your property at full price. Good luck.

    Sorry, nerd side stepping in. You forgot one part in your quote. Fear leads to anger, anger leads to the dark side ;)

    I do agree with Stephen. If they wanted to go in the first place, let them go.

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  • Robert Crowley
    Rental Property Investor · Great Mills, MD · Member since 2014 · 21 posts · 13 votes
    6y

    She said "No" to your offer of reduced rent. I don't think you owe her anything after that, legally or ethically. Explain that after that, you advertised the place and have interest from people at her current rent. She can rent at the current rate and save the time, labor, and expense of moving.

    2Reply
  • Marci Stein
    OP
    Rental Property Investor · New York, NY · Member since 2011 · 956 posts · 510 votes
    6y

    I very much appreciate this feedback I want to add it is really difficult to find a good tenant in that area which is why I excepted the lower rent , partially out of fear , the other part realty of tenant pool . 

    but I will not sign off on the renewal. Thanks!

    0Reply
  • Craig Sloan
    Member since 2018 · 200 posts · 123 votes
    6y

    Give her the option to stay for $1,100.  If she stays, you retain a good tenant, if not maybe you will find a better one.  Either way you should get $1,100 for the rent. 

    0Reply
  • Justin Schaefer
    Real Estate Investor · Mukwonago, WI · Member since 2017 · 76 posts · 16 votes
    6y

    @Marci Stein what about thanking her for being an awesome tenant, but also firmly explaining that you had already advertised the unit at the higher price, and had a taker. Maybe tell her that you're business has got to move on now, but say that you would love to have her stay, and if she is going to stay, that that is now what the price is going to be.

    And on a separate note, yes that was fear. Don't do that again, LOL!

    0Reply
  • Mary M.
    Rental Property Investor · Portland OR · Member since 2018 · 2k+ posts · 3k+ votes
    6y

    Offer her the place at 1k/mo. This will keep this good tenant and increase the rent. 

    Remember that vacancy is the killer of profit.  Plus you have no idea what the next tenant may bring. 

    1Reply
  • Jhon Restrepo
    Member since 2019 · 56 posts · 22 votes
    6y

    Go for 1k , better devil u know that the one u dont know, especially in a rough area.

    0Reply
  • Nathan GesnerBusiness Member
    Moderator
    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
    6y

    Any time you present an offer, I recommend a deadline. You offered, the tenant rejected it, so move on and find a new renter that will pay you market rate.

    You need to save up a reserve so you can stop making decisions based on fear.

    Your new tenant will pay $200 more than your current tenant was paying. That's an extra $2,400 a year. Save up that extra amount and you'll have a reserve capable of sustaining you for two months of vacancy.

    The DIY Landlord Book4.7243 Reviews
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    1Reply
  • Mark F.Pro Member
    Rental Property Investor · Elgin, IL · Member since 2016 · 326 posts · 270 votes
    6y

    @Marci Stein I'd compromise, let her know that since she declined you had listed the property for $1100 a month and you have several people interested in it at that rate, even show her the listing/responses if you'd like to show her you're not bluffing. Tell her at this point you'd come down from that rate and she can stay but rent will be $1000 a month, she will accept it or not and move. You will save the turn over costs (paint, cleaning, minor repairs, carpet cleaned, etc) and will most likely be a wash for the year all said and done plus you already know the tenant, how she pays, how she takes care of he property and more times then not that is better then the unknown....

    Just my thoughts.

    Mark

    0Reply
  • Marci Stein
    OP
    Rental Property Investor · New York, NY · Member since 2011 · 956 posts · 510 votes
    6y

    Thanks everyone for your insight-  it’s so helpful and that’s why I love bigger pockets!

    0Reply
  • Marci Stein
    OP
    Rental Property Investor · New York, NY · Member since 2011 · 956 posts · 510 votes
    6y

    Update - She can’t pay more than 900 and is planning to move. I am fine with that she’s not worth losing 2400 a year . Thanks to everyone who helped me see that

    1Reply
  • Michael Robbins
    Property Manager · Henderson, NV · Member since 2018 · 501 posts · 317 votes
    6y

    Did she provide a written notice to vacate?  If so, then I believe you are in a strong negotiating position because you can state that you already placed the home on the market at the $1100 rate.  You may not be able to require her (or not want to in order to be reasonable during this difficult time) to move due to covid but maybe keep her on month to month.  

    0Reply
  • Diane Sibilia
    Member since 2020 · 1 post · 1 vote
    6y

    just a thought , you are not losing 2400, just a potential, how much for move out , reprep property time and cost,  and lookers are not keepers, you know her history, offer m2m for now and screen lookers, how much of loss can be written off? due to disaster?, just a month of tenant overturn negates loss,if rerent at 1000/m, how much could you loose if bad tenant comes in

    1Reply
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