Ocean Springs, MS · Member since 2017 · 71 posts · 32 votes
Hi everyone! We have a house we going to rent. We could get $1250/month. We have a couple that has rented from a family member of ours for the last 10 years. They’ve never paid late and kept the house immaculate. They want to move across town and inquired about renting our house. We would rent it to them for $1150/month because that is what they are used to paying. My question is would you take the $100/month loss to get a fantastic tenant with impeccable rental history? Thanks everyone in advance!
Hi everyone! We have a house we going to rent. We could get $1250/month. We have a couple that has rented from a family member of ours for the last 10 years. They’ve never paid late and kept the house immaculate. They want to move across town and inquired about renting our house. We would rent it to them for $1150/month because that is what they are used to paying. My question is would you take the $100/month loss to get a fantastic tenant with impeccable rental history? Thanks everyone in advance!
I will do it but with a normal new tenant process, sometimes is better give some rent reduction rather spend a lot of money on repairs, evictions later
Investor · Wakefield, MA · Member since 2016 · 107 posts · 71 votes
8y
I've kept one tenant at the same rent for three years for this exact reason. He's a great guy, never complains or asks for anything, pays on time and always helped out with snow shoveling. The lack of headaches or stress from my first ever tenant has paid for itself ten times over.
I screen and turn over tenants on a fairly regular bases due to the number of units I have. Rarely do I get a bad one and feel that 90% of tenants are good tenants. In my business those numbers would never warrant having to provide any tenant a discount. That $100 will come straight out of your pocket.
I hope your tenants appreciate your generosity but, based on my experience, they are highly unlikely to show any appreciation or even care.
If they wanted to rent from me I would very likely accept them but they would be paying $1250. I am not big on charity that negatively impacts my business unnecessarily.
Investor · Akron, OH · Member since 2016 · 2k+ posts · 4k+ votes
8y
Usually in those cases, especially if the property is bigger, nicer, in a better neighborhood, I would offer a temporary long term tenant discount say $50 more now and $25 month increase for next two years
Ocean Springs, MS · Member since 2017 · 71 posts · 32 votes
8y
Thank you all for the great advice! I was thinking it would be worth the loss to reduce the stress. I like your idea Jill about increasing the rent over the years!
Ocean Springs, MS · Member since 2017 · 71 posts · 32 votes
8y
Mike Cumbie that’s hilarious unfortunately that family member is my dad so it would be more often than thanksgiving!! He does know they’ve been looking to move across town though so hopefully no ill will towards me!!!!
Real Estate Investor · New York, NY · Member since 2014 · 32 posts · 38 votes
8y
Oh absolutely. Better a guaranteed 1150 than a tentative 1250. My tenants now are immaculate people. Like the worlds greatest tenants. They agreed to pay a very fair price and I am happy to take less because I know they will pay and take care of the place. Their lease is up in July I am going to freeze their rent in hopes they sign for another year.
"I am happy to take less because I know they will pay and take care of the place."
Funny thing is all my tenants pay on time, take care of their places, get rent increases every year without fail and I never give discounts for any reason. I have a standard 5-8% turn over annually and have the majority of my tenants 10 plus years.
Rental Property Investor · Brattleboro, VT · Member since 2015 · 204 posts · 174 votes
8y
have you had a conversation with them which leads you to believe they can't/won't pay $1250? if I were you I would start at your normal rent then you can make the decision to take a lower rent if they tell you that $1150 is there budget.
Investor · Saskatchewan , Saskatchewan · Member since 2017 · 311 posts · 233 votes
8y
If you choose to give a reduction, make it contingent on prompt pay and zero lease breaches. Example: reduction is applied to month 13 rent AFTER confirmation month 1-12 are spotless.
West Caldwell, NJ · Member since 2017 · 7 posts · 3 votes
8y
I purchased a two family in 2014 with an elderly woman living in one of the apartments in which she resided there for 20 years. Her rent was 525 with heat and hot water included. I raised her rent to 675, which is still 400-500 dollars under the going rate for a 3/1. Amazing tenant, took care of everything and paid rent a week early. I've built enough equity where I would like to take it out to purchase another multifamily but need to cover the loan by raising her rent. There is no rent control in the town and I am going to presenting her with a Notice to Quit for possession or rent increase of 375. This total is still less than the going rate in the city but am I just being greedy here? Thank you for everyones input in advance.
@Jill F. You would need to raise the rent $50/month minimum each of the next two years to keep up with the cost of living increases.
Oh gosh, I wish you could get that kind of rent increase in akron, ohio. But unless you started way under market you couldn't get it in akron, ohio. But hey you can probably whine and fill out a form and get your property taxes lowered.
Real Estate Investor · Naples, FL · Member since 2016 · 1 post · 1 vote
8y
Yes I would start off with rent below the market, that is not the most important factor for me. For me the most important factor is that you raise your rent every year! You do not do this to be greedy but to establish a pattern that the tenant understands, that this is a business that has expenses that goes up every year. They sound like great tenants, but you are a great landlord that response quickly to issues that comes up. When I raise the rent I never explain it, unless they ask. I raise my rent from $20-$75 a month. I hope this helps
I purchased a two family in 2014 with an elderly woman living in one of the apartments in which she resided there for 20 years. Her rent was 525 with heat and hot water included. I raised her rent to 675, which is still 400-500 dollars under the going rate for a 3/1. Amazing tenant, took care of everything and paid rent a week early. I've built enough equity where I would like to take it out to purchase another multifamily but need to cover the loan by raising her rent. There is no rent control in the town and I am going to presenting her with a Notice to Quit for possession or rent increase of 375. This total is still less than the going rate in the city but am I just being greedy here? Thank you for everyones input in advance.
Realtor/Investor · Moscow, ID · Member since 2016 · 28 posts · 16 votes
8y
@Joseph Gonzales - If she has lived there for 20 years it wouldn't it be kinder if you visited with her in person about this vs. just presenting her with a Notice to Quit? As far as your mortgage, I would think you could still take equity out but maybe a bit less than you had hoped? Just thoughts since you asked:-)