All Forum Posts by: Twannisha Jackson

Quote from @Theresa Harris:

First late 40s, early 50s is not older.  

Check the condition of the home relative to comparables as others said, I'm sure there is some work that is needed.  I'd go through the home and ask her what has been done recently (eg when was it last painted, what is the condition of the flooring, etc).  Then give her notice of what the rent will be and time to decide what she wants to do.  Also confirm that there are no restrictions on rent increases in your area.

Agreed, since when is late 40s, early 50s older?? 

We inherited tenants when we purchased a duplex a few years ago.  None were happy with previous owner.  It turns out, he NEVER responded to issues or requests for repairs (according to them).  He also probably did not care since he was putting it up for sale.  Both units were under market.  Condition of second unit was worse off than the front unit.  It's never easy to purchase property with existing tenants -- it is extremely difficult to do a thorough inspection with all of their furniture and belongs blocking your view and the quality of tenants is not guaranteed since you did not screen them.  I prefer to purchase empty properties.  We went through both units with a clipboard to make lists of what we saw was needed to be done and what the tenant claimed needed to be done.  Luckily, they had only been there less than a year and only a few months left on their leases.  I can only imagine the condition and what repairs would have been needed had they been there 10 years!  Most likely she will go if you raise the rent to $850 since she has been comfortable for years with low rent but like suggested, try doing some repairs, etc. before you mention raising the rent.  And don't let people surprise you.  We took care of all one tenant's issues, even repaired things not on her list, spent a good chunk of $$ on her unit including replacing an entire wood driveway gate that was not in the best shape but functional and all she did was complain about the workers "using her electricity" and asked if we were going to pay for the power they used.  That was our "thank you" for spending money making her living conditions better.  But that's okay, when her lease was up, she and her two sons left and we were ahead of the game in getting the unit ready for the next tenants.  So it was a win - win for us and no need for a thank you.  Any repairs/upgrades you do now will always be beneficial for getting it ready for the next round of tenants.  

@Twannisha Jackson

Communication is key.. if you are afraid to lose them, have a conversation with them and feel them out. If you are charging below market rent for a unit that deserves market rent, the tenant will quickly learn that they aren’t going to easily find a better deal. I have been able to raise rent as much as four hundred a month with no complaints because the tenant realized how good of a deal they had been getting.

That's a big price jump. I obviously don't know the tenant's financial situation but let's assume the tenant wouldn't be able to afford it (for the sake of conversation).

If you are fine with the tenant moving out, then raise it whatever you want. 

You can look at it from the perspective of what is the cost of the vacancy (rehab, marketing time, etc) and factor that into the rent increase. For example, the numbers might make sense just to raise to $650 and show that rents are actually $200 higher in the area.

ah....didnt see the "side by side" part..... that makes a bit more sense.

If she's been in there for 10-15 years and has been WAY below market for some time, you can bet that place has a TON of deferred maintenance, so be careful on what you think the "market rate" is for that unit. You can't use a newer, nicer comparable unit as your bench mark for what yours is worth in its current condition. If she leaves be prepared for some bigger costs getting it up to current market standards.

You need to raise it for sure... but go $850 and there is a good chance she will leave and you will need to spend some $$ getting it rent ready. Nothing wrong with that.... but be prepared for that outcome. 

Tenants know what market rent is...I've never had someone that didn't. They might not know it is $800 vs $850 for their unit, but they definitely know that $475 is at least $200-250 under market...so you probably don't need to do any educating there...

So depending on condition and strategy I'd either raise it to full market with her likely deciding to leave, at which point I rehab. Or I'd choose a reasonable number that she'll probably pay and helps me avoid needing to rehab for now. 

Just make sure your rents you are asking are in line with the market rents and go from there. To be more fair you can try to give her as much warning or heads up as possible for the price you'll be asking but it's not required. 

I'd also agree if you're going to bump the rent a lot and want to keep the tenant I would do some repairs/updates asap so she can see you at least care about her home and aren't a "Greedy landlord". 

Sounds like rents are very low and she's been there 10+ years so I see it unlikely you keep her as a tenant with that much of an increase as she is so used to paying such cheap rent but you never know for sure. 

Hi Twannisha, In my "experiance" I have never kept inherited tenants , and always increase the rent once I replace the tenant, but I make sure I expend money fixing the apartment to make sure I can charge market value rent, or above market value rents. 

If you're that concerned about scaring the tenant, show her the comps and the market rent for the area and explain how you need to be at X number.

Or you could just raise the rent without consulting her. It seems like you want to be fair, but make sure you numbers are accurate for the condition of the property. I've seen landlords throw out crazy rents for not-so-great properties.