I have an upper end condo in Los Angeles that rents towards the top of the market. I'm always concerned about raising the rent as the transaction costs in time & money are severe to lose the tenants - since it's a higher end place it takes longer to rent, then there's agent costs & new paint/rehab...
Any advice on how to avoid the fear/lack of leverage I often feel when raising the price - or what to be thinking about?
Get used to doing annual increases. Even if some of them are only $20 a month, it a) gets you and the tenants accustomed to increases, b) it adds up over time and I'm betting your expenses have increased, c) few people are going to move over small rent increases and d) from b and c the small changes over several years ensures that you are keeping up with market value.
Investor · Tampa, FL · Member since 2019 · 1k+ posts · 1k+ votes
3y
Research market trends, and consider the value your property provides, if you see that they could get a similar property for a lower rate then I wouldn't raise the rent.
Get used to doing annual increases. Even if some of them are only $20 a month, it a) gets you and the tenants accustomed to increases, b) it adds up over time and I'm betting your expenses have increased, c) few people are going to move over small rent increases and d) from b and c the small changes over several years ensures that you are keeping up with market value.
Research market trends, and consider the value your property provides, if you see that they could get a similar property for a lower rate then I wouldn't raise the rent.
Thx - doesn't seem lower rent option avail, but good input.
Get used to doing annual increases. Even if some of them are only $20 a month, it a) gets you and the tenants accustomed to increases, b) it adds up over time and I'm betting your expenses have increased, c) few people are going to move over small rent increases and d) from b and c the small changes over several years ensures that you are keeping up with market value.
Thx - yes, seems small amount of increase in a relative sense.
I have an upper end condo in Los Angeles that rents towards the top of the market. I'm always concerned about raising the rent as the transaction costs in time & money are severe to lose the tenants - since it's a higher end place it takes longer to rent, then there's agent costs & new paint/rehab...
Any advice on how to avoid the fear/lack of leverage I often feel when raising the price - or what to be thinking about?
I have an upper end condo in Los Angeles that rents towards the top of the market. I'm always concerned about raising the rent as the transaction costs in time & money are severe to lose the tenants - since it's a higher end place it takes longer to rent, then there's agent costs & new paint/rehab...
Any advice on how to avoid the fear/lack of leverage I often feel when raising the price - or what to be thinking about?
Thanks in advance for any input!
we always run turnover numbers and go from there-
for example a typical turn is $1000-2500 depending on the unit and time that the tenant was in the unit, then weigh that with where you were in the market when you rented it. for example when covid hit we all had too low of rents so the next turns could have a larger hit in rent increase anywhere and if not it made sense to turn the unit and get larger market rate.
so if we feel like the specific house is under value based on the market- so lets say it is $100 lower than it should be, we just charge between $20-30 extra per month as it financially doesn't make sense to turn and we feel that $30 a month is less than $7 per week as an increase and we dont get push back as that is a very minimal amount of money to come up with. its all how you sell it, when you say its less than $7 per week increase we find that it always makes our tenants sit back and see that its not reasonable what were asking. 99.99% of ours do not give us grief over this method but of course theres always that .1% : )
of course this in consideration that you have a nice unit and a great tenant, if the tenant is not good then all best are off.