I have a property that I bought with tenants in place. They had lived there 7 years and were great tenants. I raised rent to $1050/month and they signed new 2 year lease. They are wonderful tenants, never pay late, rarely hear anything from them. I believe I could be getting $1300-1350 for this property. I know there is tremendous value to long term, great tenants. I wanted to get some feedback on what you guys think is too much of a break in price for long term tenants. Where do you guys draw the line as far as raising the price and risking having to deal with new tenants and possible issues with higher turnover? How much of a loss in potential rent income are you willing to take to keep great tenants in place?
Remember these are not the only great tenants out there. Sometimes we get sucked into ease of use in exchange for making money and working harder for it. Don't forget, in the end real estate is a business and our goal is to maximize the bottom line.
So from someone that has owned hundreds of properties I believe 15-20% discount off rents for this type of situation is too much.
Having said this, the great thing about this being a business is you are still in charge. And to you that may not be such a huge discount.
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