Is my rent increase policy too generous?

[Carl Graff]

I only have two rentals and this is my current formula for annual rent increase for current renters.

The greater of 4% or 1/4 the difference between current rent and Zillow Estimate not too exceed California AB 1482 which is capped somewhere between about 7% and 10%

A concrete example:

Current Rent $2937

Zillow Estimate $3592

4% = $3054

1/4 Zillow Diff = $3101

5% base + 6% CPI cap at 10% = $3231

In this case the increase would be $3101

Note my rentals are EXEMPT from AB 1482 but I do honor this because I believe it is the right thing to do. Of course if they decide to leave I would try to get the Zillow estimate of $3592 for new renters 

Your thoughts?

Thanks,

. Carl

[Bruce Woodruff]

"Note my rentals are EXEMPT from AB 1482 but I do honor this because I believe it is the right thing to do. Of course if they decide to leave I would try to get the Zillow estimate of $3592 for new renters"

So old tenants deserve some sort of break but new tenants don't? Odd logic. But if you believe it's the 'right thing to do' to keep your rents lower than what the market would bear, why bother with all the formulas? Just lower them all and leave them there so you can feel good about yourself.....