Is it foolhardy to raise rent now?

Question

My operational costs have been increasing substantially for over last one year and was considering increasing rents this summer.Would it be too risky to raise rents during this pandemic situation?

Theresa Harris · Answer

Talk to your tenants and explain that costs have been going up.  If they are still working and have enough lead time (3 months given the current situation), it should be fine.

Nick Rutkowski · Answer

@Kumar Gaurav

No, it’s what you have to do to keep up with costs. However, don’t be naïve and think there might not be conflict or situation. Be prepared!

Kumar Gaurav · Answer

@Vladimir Massillon

Thanks everyone for the feedback.While I understand landlord needs to tread carefully  increasing rents but I would like to know if any of the state governments are limiting landlords from increasing rents? where can I find that information?

Vladimir Massillon · Answer

Something to keep in mind, you do run the risk of going viral for the wrong reason when the tenants post your rent raise on social media, and they will. Especially if one of those tenants works in the Frontline or is elderly. Not saying you should run your business out of fear, but it is a real world component to consider

Nathan Gesner · Answer

I have stopped increases for April/May but will fire them up again in June. If anyone balks, they can move and I'll rent it to someone else at market rate because the demand is still strong.

Chris London · Answer

60+ days before the lease is due I re-run the comps. I make the decision about what to do with rent based on what the market will bear.

Stephen Jones · Answer

@Joe Villeneuve

I agree with Joe.

Michael King · Answer

Generally I'm not raising rents. I don't want to be considered heartless given the current climate, especially when my tenants are still paying rent on time (except for one of them). I can only imagine going to court with a tenant (for whatever reason), and them telling the court I raised the rent in the middle of China flu.

Joe Villeneuve · Answer

Raise them.  If you're tenants have been paying the rent, they will pay the raised rent.  However, give them about a 2-3 month heads up.

Kenneth Garrett · Answer

@Kumar Gaurav

Be careful on raising rents today.  If your unit is under market rent then it makes sense, but if you are at your market rent then be cautious.  The cost of replacing your tenant is expensive.  Repairs/paint, time could cost a months rent plus $2000 (estimate) repairs and paint).  If you raise rent $50 and the tenant leaves it definitely wasn’t worth it.  That’s a total of $600 of new income and it could $3000 plus to replace the tenant.  Not worth it.  You need to balance this especially in today’s environment.

Is it foolhardy to raise rent now?

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