Rent Increase? Or not? That is the Question

[Victor Hernandez]

Hello BP!

So I'm currently in a duplex doing a house hack. My tenants have been amazing no issues and they always pay on time or early. However they are coming up on the end of the lease in about 2 months. Rents in my area have gone up but not by much. So my question is do I offer them a renewal without raising rents? ( my thought on this is to keep them because I know what kind of tenants they are while keeping them happy) or Raise rents but puts be at risk of losing these great tenants?

To give more content the side I'm currently in I've been renovating ( brand new everything) and once I finish in about 2-3 Months will be for rent for about $400 more than what they are paying now. 

Thank you for any advice or help in advance 

Thanks BiggerPockets!

[Glen Wiley]

It is a good idea to raise rent every year, even if it is a small amount. For example, if you raised rent by $25 a month that is not likely to trigger them moving but it does help control the gap that could develop between your rent and market rates.

Each year you skip widens the gap and makes it harder to close and more likely to trigger a move. $400 is tough to recover in one change without triggering a move.

I have learned the hard way that I really should not skip rent increases every year, even if they are small.