Wife doesn't want to increase rents
Rental Property Investor · San Diego, CA · Member since 2018 · 27 posts · 36 votes
Wife doesn't want to increase rents
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I see mostly replies that are not local to CA/San Diego. This implies that they likely do not know the nuances of the local market.
First I value good tenants and let my good tenants get slightly below market rent, but you asked to justify the opposite which is very easy to do.
- In CA, duplexes are rent controlled state wide (5% + CPI, capped at 10%). If your rents get below market rent, it may never be possible to get the rent to market rate with the existing tenants.
- There is no better way to get rid of an undesired rent than to raise the rent above market rent and have them give you notice. This by-passes any claims of retaliation, discrimination, etc. Prior to rent control, this is how I got rid of every tenant that I wanted to get rid of that was current on their rent.
- COVID has identified new risks. in particular regulations that in effect result in not being able to get bad tenants out of your unit for lease violations (except as related to health and safety), non-payment, etc. Look up the anti eviction moratorium that was passed by the San Diego County Board of Supervisors. It was the most stringent in the nation. It allowed tenants to break any part of lease, not pay, do damage to the unit and you could not evict (only eviction exception was for health and safety). Fortunately this regulation expired last month. However, increased risks deserves increased profit to compensate for the increased risks. These anti eviction rules are likely to result in significant rent increases over the next few years.
- Home prices in San Diego rose ~25% county wide in the last year. To have rents increase the same as the property increase would result in a ~25% rent increase. That would be illegal on your units. The rent increases always lag the property increases. However, this is another indicator that rents are going to go up a lot in the near term.
- CPI in the last year was highest in many years. local wages have gone up significantly. skilled tradesmen (especially plumbers) have increased their costs significantly. Material cost similarly have increased significantly. Plywood has risen ~300% since pre-Covid. This implies your expenses are higher than the previous owner paid last year.
- Political climate and the COVID anti eviction rules indicate that politicians are significantly more tenant friendly than LL friendly. This implies that regulations could come at any time further limiting rent increases. What would you do if there was a rule passed indicating that even at tenant turnover you were limited in the rent increase? If you have a below market rent for a good tenant, but have to place a new tenant that inherits the rent base of the existing tenant then you are supplementing a new tenant of unknown quality.
- In part due to rent control, reduced rents even on non-commercial MF (4 units and less) does affect the value of the property if you need to exit for any reason. I recognize the appraisal will be set based on comps, but what a buyer will pay will take into account the current rents because of the difficulty in raising the rents (cash for keys, rehab extensive enough tenant cannot occupy, move in immediate family). Buying a multiplex with reduced rents will affect new buyer's cash flow/profit and is sure to be reflected in the price the RE sells for.
I gave out 6 maximum allowed rent increases this year having never given that size rent increase previously. Only one tenant gave notice and with the max increase she was still over $500/month below market rent. My point is I expect rents to rise a lot more than the 3% to 5% you are considering due to the increased cost of RE, the newly identified risks associated with providing residential housing, the high CPI and associated wage increases, etc.
I suspect if you raised the rent only 3% to 5%, your tenant may feel fortunate.
As indicated, I let my best tenants get a bit below market rent, but you should not let them get significantly below market rent. I have tenants that I could give max allowed rent increase and they would still be below market rent and it is not easy to catch back up with the market rent.
The rent increase you are considering (3% to 5%) should occur to protect your investment.
Good luck
117 Replies
- Member since 2020 · 984 posts · 1k+ votes5y
Originally posted by @Jeff S.:
@Account Closed I agree with you and I disagree too. I expect to get the best rates when I borrow money because I pay my bills and I have a history of being financially responsible. For borrowers with sketchy credit and a history of failure it is a different story both from a lender's point of view and that of a landlords.
The thing is I bought these places and paid for them through hard work and if I want to let people live there for free that is my right. If I want to give the houses away that is my right too. That is why we become independent so we can afford to do what we want.
This is what you wrote:
"My thought is a great tenant deserves a better price than one that is high maintenance. If you can show them you appreciate them as good tenants and that they are a little under market then they won't be looking for a better deal elsewhere."if you want to give your entire property to your tenant then that is your prerogative, but certainly not a great business model for investors who want to maximize profits.
My answer to your post does not pertain to your willingness to give away your rental profits. My post pertains to your statement above that is also stated by other investors where you said, "TENANTS DESERVE".
Then, you answered with, "I EXPECT TO GET THE BEST RATES". I also totally disagree with your saying that you 'exoect" the best rates when you borrow money. I've been dealing with loans for more than 50 years and virtually every time I try to get a loan from a lender I did business with, previously, I find better rates by shopping.
Just this past March, I purchased a 6-unit apartment building and had to $1.5 million loans with chase bank. I called chase bank for my new property and Chase had the worse rates at 3.9% with a prepayment penalty of 5-5-3-2-1, or something like that. I shopped and found Luther Burbank Savings, a bank I never heard of, got the loan for 4.2% with a 1.7% penalty for the first year and that loan was amazing. But, NO EXPECTATION for getting the best rate from any lender.
But, this post is not as much about 'expectation'. It is about my asking why so many investors, including the OP, why does so many landlords think tenants 'deserve' discounts or perks.
- 5yBruce WoodruffPro MemberContractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
Originally posted by @Genny Li:
If she wants to donate to a charity, donate to a charity. Your property isn't a charity. It's that simple.
She doesn't get it. They'll be out of business in 5 years with her in charge....
Originally posted by @Bruce Woodruff:
Originally posted by @Genny Li:
If she wants to donate to a charity, donate to a charity. Your property isn't a charity. It's that simple.
She doesn't get it. They'll be out of business in 5 years with her in charge....
I didn't read all the replies, just gave my immediate answer. But ouch, this is a hard one.
And reading through...oh my. What a thread disaster.
I'm glad my husband and I are on the same page. I just think through my reasoning aloud as I plan to raise the rent by $560. lol. (Only about $400 in reality since I'll be including utilities...) I waited a really long time until that was true. Can't do anything unless you're together.
Don't have to both be involved. My husband can't do anything handy to save his life. Brilliant man, but the absentminded professor type. I came home to a broken dishwasher that he had let overflow over and over in the kitchen while I was gone because he didn't really register the water and just mopped it up without telling me.
Originally posted by @Dan H.:
Originally posted by @Account Closed:
We raise the rents 3% to 5% every year to attempt to keep up with inflation. Every year, in California, your property taxes increase 1%, water doubled and tripled in the past few years., the prices for materials and contractors has more than doubled.
You are running a business and it is not about being generous. Every business that is operated like a business raises their prices every year to keep up with increased costs. One more important reason we raise rents every year is so tenants actually expect to get an increase notice. If you don't raise rents you will have serious problems making a good profit when you sell the property because buyers want properties with the highest rents, obviously.
One thing a very wise man told me 48 years ago was that if I wanted to have a good relationship with my wife I needed to keep her out and away from my business and since that day my wives (all 3 of them) never had a say in what I did. Sorry, but I don't understand why married people think they have to have their spouse's approval for everything they do. I own several apartment building in Los Angeles county, several homes in several states and I never ever asked my wife whether or not I should buy or sell a property and because I never involved my wife she already has the expectation that I don't involve her in my business affairs. I don't need my wife's input nor do I need her approval with the exception of during the night.
Maybe, your wife is putting up some of the cash, or you are pulling cash from the family's retirement money and you need your wife's approval. In that case, just agree with your wife for now, buy the property and send a few rent increase notices with you think it is appropriate and I can't understand why any woman on this planet would not like a little more free cash to spend at Nordstroms and that brings up another small subject about how my wife and I discuss money and other issues. We ride bicycles about 100 miles every week and almost every week we stop at Nordstroms so my wife can get bag loads of Shiseido makeup. My wife tries to tell me how much money she spends and I always tell her that I don't want to know. I know she spends about $500 to $700 every month on makeup and I don't want to know if she pays $3000 for a purse. I respect my wife's decisions in regards to her ability to avoid spending more that she should, or more than we can afford and my respect for her avoids arguments.
I buy properties without asking my wife and I don't want my wife to ask for my approval when she wants to buy something.
I've been married to my current wife for 23 years and only had maybe 2 or 3 minor issues that lasted less than a few minutes.
>One thing a very wise man told me 48 years ago was that if I wanted to have a good relationship with my wife I needed to keep her out and away from my business and since that day my wives (all 3 of them) never had a say in what I did. Sorry, but I don't understand why married people think they have to have their spouse's approval for everything they do.
This made me laugh. Starts off looking like sage advice to a happy wife then you indicate you have had 3 wives (not exactly a ideal relationship with each wife). I do recognize later you indicate wife #3 has lasted 23 years, but by the time I read that part I already had my laugh.
My wife and I are partners in our property investments. She does most of the interaction with the tenants. I do most of the interaction with the contractors. I also do most of the number analysis and she does most of the book keeping. It works well for us because we have complimentary strengths. We each agree on rent increases. It used to be that she advocated lower increases than I did, but now we are mostly in sync on the rent increases.
We both believe good tenants deserve to be a bit below market rents. We do not want any of these tenants to be able to move into a unit at similar price that has just had a tenant turn over flip (clean, etc). We recognize tenant turnover takes work and costs money. We also realize, regardless of how thoroughly we screen, that there is some risk placing a new tenant. So we believe financially we benefit from letting the better tenants be a little under market value. The pretty good tenants we keep at market rent. The poor tenants we raise their rent above market which typically results in the tenant giving notice and us replacing the poor tenants. We currently have zero poor tenants.
Note with rent control limiting the rent increase, the rent has to be near market rate for a legal rent increase to be able to raise the rent noticeably above market rent.
Come on. I always take marriage advice from people with 3 spouses. They're the experts. So much experience. Looool.
I also love the advice of don't question her wasteful spending and she won't have a reason to question anything you do!
She is, of course, only hanging with him after she got citizenship merely because something better didn't happen to come along, because she very well knows he is doing the same. Besides, he was old when she met him, and bluntly, young girls don't choose old men without a good reason.
- Member since 2020 · 984 posts · 1k+ votes5y
Originally posted by @Jim K.:
Originally posted by @Account Closed:
Originally posted by @Jim K.:
Originally posted by @Account Closed:
Originally posted by @Jim K.:
Originally posted by @Account Closed:
Originally posted by @Dan H.:
Originally posted by @Account Closed:
We raise the rents 3% to 5% every year to attempt to keep up with inflation. Every year, in California, your property taxes increase 1%, water doubled and tripled in the past few years., the prices for materials and contractors has more than doubled.
You are running a business and it is not about being generous. Every business that is operated like a business raises their prices every year to keep up with increased costs. One more important reason we raise rents every year is so tenants actually expect to get an increase notice. If you don't raise rents you will have serious problems making a good profit when you sell the property because buyers want properties with the highest rents, obviously.
One thing a very wise man told me 48 years ago was that if I wanted to have a good relationship with my wife I needed to keep her out and away from my business and since that day my wives (all 3 of them) never had a say in what I did. Sorry, but I don't understand why married people think they have to have their spouse's approval for everything they do. I own several apartment building in Los Angeles county, several homes in several states and I never ever asked my wife whether or not I should buy or sell a property and because I never involved my wife she already has the expectation that I don't involve her in my business affairs. I don't need my wife's input nor do I need her approval with the exception of during the night.
Maybe, your wife is putting up some of the cash, or you are pulling cash from the family's retirement money and you need your wife's approval. In that case, just agree with your wife for now, buy the property and send a few rent increase notices with you think it is appropriate and I can't understand why any woman on this planet would not like a little more free cash to spend at Nordstroms and that brings up another small subject about how my wife and I discuss money and other issues. We ride bicycles about 100 miles every week and almost every week we stop at Nordstroms so my wife can get bag loads of Shiseido makeup. My wife tries to tell me how much money she spends and I always tell her that I don't want to know. I know she spends about $500 to $700 every month on makeup and I don't want to know if she pays $3000 for a purse. I respect my wife's decisions in regards to her ability to avoid spending more that she should, or more than we can afford and my respect for her avoids arguments.
I buy properties without asking my wife and I don't want my wife to ask for my approval when she wants to buy something.
I've been married to my current wife for 23 years and only had maybe 2 or 3 minor issues that lasted less than a few minutes.
>One thing a very wise man told me 48 years ago was that if I wanted to have a good relationship with my wife I needed to keep her out and away from my business and since that day my wives (all 3 of them) never had a say in what I did. Sorry, but I don't understand why married people think they have to have their spouse's approval for everything they do.
This made me laugh. Starts off looking like sage advice to a happy wife then you indicate you have had 3 wives (not exactly a ideal relationship with each wife). I do recognize later you indicate wife #3 has lasted 23 years, but by the time I read that part I already had my laugh.
My wife and I are partners in our property investments. She does most of the interaction with the tenants. I do most of the interaction with the contractors. I also do most of the number analysis and she does most of the book keeping. It works well for us because we have complimentary strengths. We each agree on rent increases. It used to be that she advocated lower increases than I did, but now we are mostly in sync on the rent increases.
We both believe good tenants deserve to be a bit below market rents. We do not want any of these tenants to be able to move into a unit at similar price that has just had a tenant turn over flip (clean, etc). We recognize tenant turnover takes work and costs money. We also realize, regardless of how thoroughly we screen, that there is some risk placing a new tenant. So we believe financially we benefit from letting the better tenants be a little under market value. The pretty good tenants we keep at market rent. The poor tenants we raise their rent above market which typically results in the tenant giving notice and us replacing the poor tenants. We currently have zero poor tenants.
Note with rent control limiting the rent increase, the rent has to be near market rate for a legal rent increase to be able to raise the rent noticeably above market rent.
Laugh all you want about being married three times. A high percent of people in this world don't have the jewels to say they made mistakes and they are so full of fear they would rather bear the pain of living with someone rather than bearing the pain of breaking up.
For my first wife, I will be a man and admit that I married her because I had sex with her and thought marriage was the right thing to do. So, I crossed my fingers and about 10 years later realized that I was deeply in love (or desired) a beautiful American-Japanese girl 10 years younger than myself. I went to shrinks to try to stay with my wife, but there was no way I wanted to live with her for another. I gave my wife two houses that were paid off, $800 per week for support for 10 years vs. the $400 for 5 years I was supposed to pay and 10 years ago purchased her a house in Idaho because she was broke.
Unfortunately, my gorgeous, sexy and fun 2nd wife was a drug addict and I sill love her as much today as the day I met her. For our divorce, her own attorney knew how bad her drug problem was and the court gave her only $240,000 in cash and I got every property. The court told me to keep her $240,000 and pay her a little at a time. So, invested her money into apartment buildings and because she got off drugs I gave her a house worth $900,000, today. So, today, she has $2.5 million in equity from the apartment building, a $900k house and because we manage the apartment buildings we pay her $7500 per month.
My third wife is a gorgeous Filipina, 22 years younger than myself, weighs only 85 pounds and looks like she is not one day older than 18-years old. She gets up at 5 am every morning and takes care of business until midnight on many nights.
I am not embarrassed about admitting that I would rather make changes when I have to vs. being afraid to make changes.
You have your wife do the books? That actually makes me sick. My father was totally nuts and he had my mother handle paying all the bills. One day he came home earlier than usual, received a few phone calls and found out he was $20,000 in debt when he thought he had tons of cash in the bank.
I was only about 5-years old at the time and can remember the fights and trauma. This is what I say about someone having their wife to the books. First, don't get upset when your wife makes serious mistakes, but since you don't do the books you will never find the mistakes. Second, there is nothing better than doing the books yourself so you can set up systems that work the best and so you have hands-on knowledge about everything that pertains to the business.
Here is a short story about wives should not do the books even when they claim that are bookkeepers when that are not. I purchase a 27-1/2 acres piece of land to build a house on and hired a grader to create a pad and a driveway. The orignal contract was for $30,000 and when the grader hit a solid rock hill the price increased to $60,000. The grader's wife sent invoices for progress payments and as I made payments I notice his wife wrote that I owned $5,000 less than I actually owed. I called his wife several times, sent several statements with my calculations and we argued so much she slammed the phone down on me as she kept telling me how educated she was and how arrogant and stupid I was. I called her husband and he was made at me. So, I went to the job, showed him the math and paid him his $5,000.
I own a fairly large plumbing company, construction company with licenses for 8 specialty trade, do large jobs like building hotels and underground utilities for many cities, own several apartment buildings, own real estate in several states, have no bookkeeper in my office, do all the books myself with the exception of payroll done by a part-time secretary, work in the field 6 days a week and the only thing my wife does is she manages the properties, collects rents and makes bank deposits.
A wife should be a wife and not a business partner. She should be free to help and not feel guilty if she wants to be a house mouse, stay home and polish her nails. A man should be able to handle everything without having to be told he is stupid and without putting himself in a position where he has to have his wife's permission to purchase a different and more-expensive roll of toilet paper.
Can't stand it when I do business with someone and after my sales pitch they tell me they have to talk with their wife. If her opinion was so important then why the ... didn't you have her at our meeting in the first place. I get phone calls where I quote $69 to clean a drain and a man, if you want to try to call him that, tells me he has to talk to his wife. That raises the hair on the back of my neck.
I have absolutely zero interest in your love life and this very much includes descriptions of your women's build, weight, level of pulchritude, and the sort of coitus you have with them, Jack. Can you bear that in mind and limit related TMI passages in your contributions going forward.
According to your post, it appears you found my story interesting enough for you to read my entire post. Maybe, I should have shortened the posted and pasted some pictures.
You are right and I do get carried away. But...be thankful that I don't put my wives' pictures on my avatar like one post had with a beautiful woman he married in Okinawa.
Sad to say that every time I change wives I marry one 10 or more years younger and as some people say, "pretty soon I will be dating sperm".
But...since none of this interests you, even though you read this far, I personally find there is a huge correlation in regards to the dynamics of relationships. A biography about Henry Ford mentioned that he and other famous rich people were successful because they had high sex drives. Sorry! I hope the truth is not offensive. Even if it does, I find that having a high sex drive, riding a bicycle more than 100 miles every week, going to the gym or working out at our place every day and getting up at 5 am seven days per week makes us much better equipped to make better decisions and to be more prosperous. Sorry, again! No fat or moss growing on our butts! Being active is exciting. Excited people (in general) are happy people. Happy people are more productive and prosperous.
I can't imagine a man being successful real estate business (any business, really) and he is afraid to leave. I may be totally wrong, but I know I would be the most miserable person on earth if I had to ask my wife for her opinion regarding whether or not to do a business deal with the exception of being married to a woman who has more real estate experience than I have and then I would be afraid to marry someone who called me 'stupid' every time I make a mistake. So, that ain't going to happen!
Is any of this related to investing in real estate, or do I like to ramble on, forever.
tic nerv
I can't find a single meaningful and honest response to this that won't get me banned.
You need to chill out, relax, smoke a good one and have just a little fun with every forum. It gets boring when people talk only about business and it is interesting to hear other people's stories and philosophies. When it comes to learning about how to do business I think it is super critical to know how successful (and maybe even unsuccessful) people function, think and even to know their personal problems and relationships is critical. It is like getting deep inside someone's head. I love to know everything I can find out about people when it comes to business and this help to gage ourselves and set benchmarks. I like to see the picture on avatars when people include their spouse. A picture is worth a million words and one single picture can often tell more about a person they they know about their self.
LOL, OK, So where's your profile pic of your golddigging teenage-looking Filipina giving you a lapdance for a dollar, Jack?
This post is okay with me because that is exactly the type woman I love. Nothing wrong wrong with a woman who love money, loves life and does for a man what he wants. The problem with a high percent of people is they have so much fear about being honest about what they like and they are so inhibited they choke their self to death.
Don't worry! My wife is hot and I am not offended. The way I met my wife was she was talking to one of my employees who was interested in her, but he kept telling me she had a boyfriend. She came to the United States about 5 or 9 nears before I met her and she ran away from the man who she married and brought her here. She had a 3-year old child from another person and she ran away from him, was on her own and was working at an auto part store.
Since my employee refused to ask her for a date, I met her at the donut shop and I was filthy dirty with cob webs on my hat because I work underneath a lot of homes. I asked her to borrow $2 and I new she was having a rough time with money. She thought I was a bum and she loaned me the $2. I always tell her that the $2 was the best money she ever invested.
- Member since 2020 · 984 posts · 1k+ votes5y
Probably get banned, but here are two pictures taken in Las Vegas about two years after I met her.
Let me state my piece of mind and I promise this will be the last post (on this thread) about the subject of my relationship.
My wife is literally from a jungle on the Island of Cebu in the Philippines. She graduated from high school and went to college for two years. Her parents grow food for a living and have a few cows and pigs.
Virtually, every American woman in the United States brags about the men they meet, about the nice car they drive and about the money he has. Every American woman prefers to marry a man with money and many marry men because of the money. So, there is nothing wrong with my wife, or any Hispanic or person from any country wanting or preferring a man who has the most money.
But, as I said in my previous post, I met my wife when she was buying coffee at a donut shop in the United States. I asked her to borrow $2 and she handed me the money.
Overall, regardless of what anyone writes on the internet, my wife blows just about every woman I ever met with it comes to being faithful, fun, honest and she gets up at 5 am every morning and works until midnight 6 days per week. She is seriously on top of her game when it comes to taking care of the two children we raised and both children are currently in college to get Phd's for math and the other for some sort of manufacturing of drugs )or something).
Say what you want about being a gold digger, but we live in a commercial building on concrete floors with zero furniture with the exception of mattresses and when she shops for clothing she does buy some Guess clothing, but she is super frugal and loves to purchase shirts and items for as little as $3.
- 5yBruce WoodruffPro MemberContractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
What a great thread....! What was the original topic?
Originally posted by @Account Closed:
Probably get banned, but here are two pictures taken in Las Vegas about two years after I met her.
Let me state my piece of mind and I promise this will be the last post (on this thread) about the subject of my relationship.
My wife is literally from a jungle on the Island of Cebu in the Philippines. She graduated from high school and went to college for two years. Her parents grow food for a living and have a few cows and pigs.
Virtually, every American woman in the United States brags about the men they meet, about the nice car they drive and about the money he has. Every American woman prefers to marry a man with money and many marry men because of the money. So, there is nothing wrong with my wife, or any Hispanic or person from any country wanting or preferring a man who has the most money.
But, as I said in my previous post, I met my wife when she was buying coffee at a donut shop in the United States. I asked her to borrow $2 and she handed me the money.
Overall, regardless of what anyone writes on the internet, my wife blows just about every woman I ever met with it comes to being faithful, fun, honest and she gets up at 5 am every morning and works until midnight 6 days per week. She is seriously on top of her game when it comes to taking care of the two children we raised and both children are currently in college to get Phd's for math and the other for some sort of manufacturing of drugs )or something).
Say what you want about being a gold digger, but we live in a commercial building on concrete floors with zero furniture with the exception of mattresses and when she shops for clothing she does buy some Guess clothing, but she is super frugal and loves to purchase shirts and items for as little as $3.
Well, based on her t-shirts, she obviously loves America and also loves the Dodgers. She's OK in my book.
Oh, and as for the original topic, I don't care if a tenant is good or bad. I implement automatic annual increases for the maximum amount I can for ALL of my units. Not implementing increases is one of the most common mistakes among new landlords. If someone decides to leave because of that, it actually makes me money in the long-run because the rental amount will be marked to market and it increases my pool of buyers should I ever decide to sell down the line.
- Member since 2020 · 984 posts · 1k+ votes5y
Originally posted by @Tony Kim:
Originally posted by @Account Closed:
Probably get banned, but here are two pictures taken in Las Vegas about two years after I met her.
Let me state my piece of mind and I promise this will be the last post (on this thread) about the subject of my relationship.
My wife is literally from a jungle on the Island of Cebu in the Philippines. She graduated from high school and went to college for two years. Her parents grow food for a living and have a few cows and pigs.
Virtually, every American woman in the United States brags about the men they meet, about the nice car they drive and about the money he has. Every American woman prefers to marry a man with money and many marry men because of the money. So, there is nothing wrong with my wife, or any Hispanic or person from any country wanting or preferring a man who has the most money.
But, as I said in my previous post, I met my wife when she was buying coffee at a donut shop in the United States. I asked her to borrow $2 and she handed me the money.
Overall, regardless of what anyone writes on the internet, my wife blows just about every woman I ever met with it comes to being faithful, fun, honest and she gets up at 5 am every morning and works until midnight 6 days per week. She is seriously on top of her game when it comes to taking care of the two children we raised and both children are currently in college to get Phd's for math and the other for some sort of manufacturing of drugs )or something).
Say what you want about being a gold digger, but we live in a commercial building on concrete floors with zero furniture with the exception of mattresses and when she shops for clothing she does buy some Guess clothing, but she is super frugal and loves to purchase shirts and items for as little as $3.
Well, based on her t-shirts, she obviously loves America and also loves the Dodgers. She's OK in my book.
Oh, and as for the original topic, I don't care if a tenant is good or bad. I implement automatic annual increases for the maximum amount I can for ALL of my units. Not implementing increases is one of the most common mistakes among new landlords. If someone decides to leave because of that, it actually makes me money in the long-run because the rental amount will be marked to market and it increases my pool of buyers should I ever decide to sell down the line.
Nice post. Thank you!
Now, here is a nice-looking couple not shy to show off their picture together. I like this one. Very nice!
@Zachary Jensen. Every year my husband tells me not to raise rents and every year I completely ignore him and do it anyway. I am always slightly under market and have never lost a tenant over a rent increase. I usually raise 3 - 5 % annually. I don’t have any sort face to face conversation with my tenants. I just send them notice 2 months in advance.
- Real Estate Agent · Commerce CIty, CO · Member since 2018 · 127 posts · 78 votes5y
@Zachary Jensen if you dont raise the rent they may assume you are wealthy and generous and begin to ask for thing such as upgrades, leniency on rent, sub leasing etc.
- Member since 2020 · 984 posts · 1k+ votes5y
Originally posted by @Heidi M.:
@Zachary Jensen. Every year my husband tells me not to raise rents and every year I completely ignore him and do it anyway. I am always slightly under market and have never lost a tenant over a rent increase. I usually raise 3 - 5 % annually. I don’t have any sort face to face conversation with my tenants. I just send them notice 2 months in advance.
My kind of girl. Very smart. Good common sense. Single??? Just joking!!! Thank you very much.
But...I love it when I increase the rents and tenant move. Suppose you have a unit renting for $1500, you raise the rent $50 and the tenant moves and then you get a tenant who pays you $1650 per month. I love this when owning multi-unit properties because not in less than one month by the tenant moving you just earned
Rent increase $150 x 12 months = $1800 per year. This is not a lot of money, but $1800 for some Shisiedo at Norstroms evey year is seriously sweet. No, I don't personally use Shiseido because I'm already too wrinkly.
Suppose, you own a 4-plex or more units and today for most properties the Gross Multiplier is 18+
So, when your tenant moved you just earned
Additional Gross Income of $1800 per year X Gross Multiplier = $32,400 is the amount you can add to the price for your property if you want to sell it PLUS
At the end of the first year you earned $32,400 + $1800 from additional rent = $34,200
Now, lets look at this if you buy 4 units, increase the rents $150 for 4 units the day you buy the property, increase the rents $50 every year and I will assume you are currently cash flowing not less than $200 per unit.
You are going to be FILTHY RICH since you have the common sense to increase rents! Don't know??? I did some crimes in my youngers years I will never write about, but never felt 'dirty' about earning good honest money like in the chart below.
- 5yBruce WoodruffPro MemberContractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
Dude, when you start a thread, you should check back in and let everyone who took the time to respond, know how its going....
Originally posted by @Jim K.:
@Account Closed
Uh-huh. And people says chivalry is dead...
It's very obviously a business transaction on both sides. I would feel really sorry for her if it wasn't, for being married to a user. She came out of a miserable existence with a very poor future. No blame on her. It's how she could escape. Given what she came from, putting up with him probably isn't a terrible price to pay, and many East Asian-born men treat women so terribly that even he might be tolerable.
@Jack Orthman my lowest cash flowing unit is $500 a month. Turnovers do not scare me at all because my properties are maintained and it’s an opportunity to raise the rents again. I rarely have turnovers though. I find it interesting that some get all touchy feely with their tenants. Late? Thank you for letting me know. Just to remind you the late fee is $50 plus 10% per day. Guess what….they are only late once. My only problem is finding more units to buy.
- Member since 2020 · 984 posts · 1k+ votes5y
Originally posted by @Genny Li:
Originally posted by @Jim K.:
@Account Closed
Uh-huh. And people says chivalry is dead...
It's very obviously a business transaction on both sides. I would feel really sorry for her if it wasn't, for being married to a user. She came out of a miserable existence with a very poor future. No blame on her. It's how she could escape. Given what she came from, putting up with him probably isn't a terrible price to pay, and many East Asian-born men treat women so terribly that even he might be tolerable.
I love your post!
I will be in Columbus Ohio on Saturday morning with my entourage and will leave on Wednesday morning. Going there to visit my son who just started at Ohio State and since I am an old cheap bas..rd I will get a cheap hotel near the college. Anyone interested is hanging out for a few hours and we can meet at some cheap restaurant (A JOKE). I will bring my tablet, can connect to my office PC if Columbus has internet and if I can figure out out my tablet turns on and am willing to show, discuss, exchange and drink until the first person falls on the floor (3 jokes and I don't drink).
I almost never read nor answer private messages because I don't want to get started with committing to time that is short and I apologize.
If interested in meeting send a pm and I will try to access BP.
I am going to look at some multi-unit properties and do some math, but I am not serious about buying due to my being 71-years old, but if I did see something I should not refuse I may be up for the challenge.
- Member since 2020 · 984 posts · 1k+ votes5y
Originally posted by @Heidi M.:
@Jack Orthman my lowest cash flowing unit is $500 a month. Turnovers do not scare me at all because my properties are maintained and it’s an opportunity to raise the rents again. I rarely have turnovers though. I find it interesting that some get all touchy feely with their tenants. Late? Thank you for letting me know. Just to remind you the late fee is $50 plus 10% per day. Guess what….they are only late once. My only problem is finding more units to buy.
Everything you are doing sounds great and makes good business. Sounds like you are a tough girl?
- Laveen, AZ · Member since 2016 · 584 posts · 528 votes5y
Originally posted by @Zachary Jensen:
I'm just about to close on my first rental property (house-hacking a duplex in a small town outside of San Diego, CA). The previous Landlord raised rents 3-5% every year on this property, so it is currently rented for market rent to some great tenants who have taken good care of the place. My wife is a wonderful person and very generous. As a result, she doesn't want to continue increasing the rents on a yearly basis. I could really use some help making the case for the importance of yearly rent increases. I understand that property taxes increase on a yearly basis and that any maintenance costs also go up on a yearly basis. What are some of the other reasons for maintaining regular annual rent increases?
I see you got many replies but let me add 2 and a half cents here:
Remind your wife tenants are not your friends. They don't care about you or what you're going through. Only themselves. When something breaks, you will be expected to fix it. There won't be no "aww shucks we can wait for a new A/C since you never raised our rent".
You didn't buy investment properties to make things easy on tenants. There's other ways to help the less fortunate with housing.
You need to increase those rents to fund capital expenditures. No tenant will let the roof leak on their bed because you kept the rent low.
One day you will NEED to raise the rent. And when you do, you will get a fight. I've seen this happen. Tenants will retaliate by nit picking a variety of things for you to fix since you're raising rent all the sudden.
Tenants talk. "Hey Larry you just moved in and leased for 900? Well I only pay 750 haha for the same size apartment hahaaa". Now Larry wants to know why you charge so much and wants the same price as Fran. And if not, Larry will retaliate and make things difficult for you.
If you and your wife ever split up, she will want half, and want rents increased. Hopefully that never happens but, for real.
Originally posted by @Genny Li:
Originally posted by @Jim K.:
@Account Closed
Uh-huh. And people says chivalry is dead...
It's very obviously a business transaction on both sides. I would feel really sorry for her if it wasn't, for being married to a user. She came out of a miserable existence with a very poor future. No blame on her. It's how she could escape. Given what she came from, putting up with him probably isn't a terrible price to pay, and many East Asian-born men treat women so terribly that even he might be tolerable.
Note the importance he repeatedly places on being properly validated every day. There's no reason to ever accept being put in your place by your wife if you can dig deep enough into the armpit of the Third World to find a woman who will kowtow to you every day. And the very worst sin she might commit...how dare she, in her vapid femininity, presume to question ANY of the business decisions he makes in his eighth decade?
- Homeowner · Abington, MA · Member since 2017 · 75 posts · 29 votes5y
I'm not sure if this has been said:
But your wife may be on the right track. If you truly have great tenants who aren't planning on leaving any time soon. Don't raise the rent. I know you'll be missing out on 3-ish% each year. But you know what costs you 8%? 1 month in vacancy.
HOWEVER
I would absolutely point out to them that you are waiving the fee for THIS renewal due to their good nature and that the "world is in a crazy place" and you don't want to lose a great tenant.
Some people abuse your kindness, some wont.
Just don't skip the following year and don't double up. - New to Real Estate · Charlotte, NC · Member since 2019 · 7 posts · 3 votes5y
@Zachary Jensen in Portland Oregon, where I am presently, there are pretty drastic limitations on when you can increase the rent. Inside city limits you are only permitted to increase rents by a very low percentage each year, HOWEVER when you do so, you’re required to pay the tenant a relocation fee in the ballpark of 3-4K should they wish to move out.
This has incentivized landlords scared of paying this to not increase rents, and, next thing you know it’s 5 years later, you’re 30% under inflation/tax/market rates and can’t do **** about it. I’d expect the politics of your area to closely follow suit if they haven’t already. Moral of the story being - if you don’t do it today you won’t be able to catch up tomorrow.
- 5yAJ ShepardPro MemberReal Estate Syndicator · Portland, OR · Member since 2014 · 453 posts · 312 votes
Originally posted by @Robert Feiler:
@Zachary Jensen in Portland Oregon, where I am presently, there are pretty drastic limitations on when you can increase the rent. Inside city limits you are only permitted to increase rents by a very low percentage each year, HOWEVER when you do so, you’re required to pay the tenant a relocation fee in the ballpark of 3-4K should they wish to move out.
This has incentivized landlords scared of paying this to not increase rents, and, next thing you know it’s 5 years later, you’re 30% under inflation/tax/market rates and can’t do **** about it. I’d expect the politics of your area to closely follow suit if they haven’t already. Moral of the story being - if you don’t do it today you won’t be able to catch up tomorrow.
I agree that if you can raise rents doing so sooner as opposed to later is very good advice. One thing that we do is offer a month to month rental agreement (forced notice) or they can negotiate that price down if they sign a lease. This does a couple things, sets the expectation that your property is worth more. Allows for the tenant to believe they are getting a good price and it sets the expectations at the end of the term that the rent will be raised again. Hopefully this process also keeps more tenants because you can adjust down to market rent that will keep a good tenant in the unit.
Second to comment on Portland, Or laws. If you know how to operate in them, they are actually fair. 10% per year is not an unreasonable amount of rental increase without having to pay fees or relocation costs. (If you want to raise rent above this, you pay relocation costs to relocate the tenant, however there are 10+ exceptions you can use) As long as you know what the costs are, you have to build it in to your budget. So perfect example of how Gov is driving prices of doing business up which in turn makes the property more valuable. Good investors find ways to mitigate these costs and capitalize on the appreciation within the market. Also drives out the competition from the marketplace because everyone else has comments like above. Knowledge is power and business is about knowing more than the next person and putting that knowledge into action. There are deals everywhere, you just have to be willing to invest your time and effort to find them and perform. - New to Real Estate · Charlotte, NC · Member since 2019 · 7 posts · 3 votes5y
@AJ Shepard 100%
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