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Critsmcgee
join:2011-12-02

Critsmcgee to hortnut

Member

to hortnut

Re: how to nicely ask tenants to increase their rent ..

said by hortnut:

said by Critsmcgee:

What's the though process behind that? Property taxes go up each year and someone needs to pay it. You expect someone to eat the increased operational costs? Would you do that to your bank or employer?...

.
One has to be careful about generalizations. The PNW took a big hit and only now is recovering. Costs in my area have been the same or have decreased since the start of the Great Recession in 2008. Property Taxes actually went down here. In 2008, values of homes took a huge hit and rentals also went down. There are 26 units in 13 buildings and the Condo fees have been the same, until this year.

I own rentals in 6 states. That's a lot of area to pool data from. Property values went down but tax rates went up which resulted in a net increase. Funny how that works.
rody_44
Premium Member
join:2004-02-20
Quakertown, PA

rody_44

Premium Member

This renter was in the unit for the last two years, Didnt home values go up in pretty well all areas in the last two years?
Critsmcgee
join:2011-12-02

Critsmcgee to rody_44

Member

to rody_44
said by rody_44:

Actually how the landlord does it is very area dependent anymore. High demand lets you get away with a lot more. What doesnt change is while 150 a month is a lot of money. 2750 is a lot more and with two wage earners earning 100,000 plus a year its kind of like a insurance policy against that 2750.

Works the same in all 6 states I rent in. Maybe there are some rare states/areas out there. I've not run into them. I also network on other boards with landlords to collaborate on stuff. But hey what do I know right?
rody_44
Premium Member
join:2004-02-20
Quakertown, PA

1 edit

rody_44

Premium Member

Shit i know some areas where the landlord has to waive the security deposits or give the first month free just to get someone to move in. There is that many vacant properties.

hortnut
Huh?
join:2005-09-25
PDX Metro

hortnut to rody_44

Member

to rody_44
said by rody_44:

This renter was in the unit for the last two years, Didnt home values go up in pretty well all areas in the last two years?

Here only moving upward slightly. It has only been since September things are moving upward, but nowhere near the bubble of 2007.

datguy11
@verizon.net

datguy11 to inGearX

Anon

to inGearX
said by inGearX:

i like this couple very much

Be glad with what you have,, not worth loosing a tenant you like.. Ive had tenants that i liked and didnt raise rent for 3 years... Not worth loosing a great tenant.. and having no tenant and taking a chance with the next one.

So my advice, no raise or a very little raise.. You want to keep em right?

You are making money right?

Like the saying.. the devil you know....

IowaCowboy
Lost in the Supermarket
Premium Member
join:2010-10-16
Springfield, MA

IowaCowboy to Critsmcgee

Premium Member

to Critsmcgee
Then you have to think do you want to go through the tenant friendly eviction process if they refuse to leave when the lease expires.

I've heard it's very difficult to evict someone in Massachusetts. A guy at Home Depot told me he knew a landlord who got stuck with deadbeat tenants who were not paying for a whole year before they were gone. The whole year was spent fighting the housing courts.

Sometimes you just offer them $1,000 to leave. They accept the money, they've given up their right to an eviction hearing and you change the locks/shut off the utilities.
rody_44
Premium Member
join:2004-02-20
Quakertown, PA

3 edits

rody_44 to hortnut

Premium Member

to hortnut
NE US has moved pretty dam much in the last couple of years. My brotherinlaw bought a house in 2011 for 245,000 in North Wildwood. He tells me its value is 398,000 as of 2 months ago. Of course we also had that where everyone was building to rent out here in pa. Even top notch places are offering deals to get good renters in. The house he bought in wildwood is a three story with a 2 bedroom apartment and a efficiency on the first floor. He lives on the main 2nd and 3rd floor house and rents the 2 bedroom apartment and efficiency out. He is cleaning up on that deal. Its 2 blocks from the beech. He does them different tho. The efficiency is rented by the week and the apartment by the season. He doesnt do the hardly making money tho.

His apartment building is a 21 unit apartment house in Delaware County Pa. Again at that spot. Not near the hardly making any money. It was a fixer upper deal and he fixed it up as he went. Somewhere around 400,000 to buy the place in 2010 and they are 1250 a month for 1 bedrooms. He keeps one vacant all the time and has a handy man in one.

He bought a big house in Philadelphia and turned it into a half way house. 60 beds at 75.00 a week. Being a halfway house its about half cash and half government paying people.

Assorted single homes he purchased around Pa.

As you can see im not sure im buying most do it at low profit. He lives in Wildwood and fishes all day on his 500,000 dollar boat.

IowaCowboy
Lost in the Supermarket
Premium Member
join:2010-10-16
Springfield, MA

IowaCowboy to rody_44

Premium Member

to rody_44
said by rody_44:

Shit i know some areas where the landlord has to waive the security deposits or give the first month free just to get someone to move in. There is that many vacant properties.

Or allow pets, including pit bulls. Cats can be a nightmare as they like to scratch woodwork.

Finding places that take the furballs is difficult.

raellynow
@optonline.net

raellynow

Anon

Pit bulls are a insurance liability.

I love LOVE people who want to put in there 2 cents because XYZ works in YZX area blah blah...

Ya so costs are going up, yet I see many MANY areas were profits are going *down* due to people coming in, having no idea what they are doing (alot going OUT of biz in a few years sometimes the first) yet driving prices down. Your perfect world of prices go up everything follows does not follow suit.

If you want me to get a CPA to find out the EXACT number of hours of rent lost... well lawl.

OP still loses money, that is the point...

and if you bother to read everything, I said how fast can the unit be filled... if the unit can be filled in a week, that is alot different than 1-2 months...

Anonymous_
Anonymous
Premium Member
join:2004-06-21
127.0.0.1

Anonymous_ to inGearX

Premium Member

to inGearX
check your area for rent control

someareas have them

inGearX
3.1415 9265
join:2000-06-11
New York

inGearX to garys_2k

Member

to garys_2k
said by garys_2k:

said by inGearX:

please help me see it objectively .. and craft it in a nice way so they would not see it hostile .. and would want to say OK

So, was this a drive-by post or are you going to respond to the questions and suggestions asked here?

sometimes i am not able to get any mobile data :/ .. traveling outdoors..

thx mate
inGearX

inGearX to umwutlol

Member

to umwutlol
U
said by umwutlol :

said by microphone:

What services are the management company even providing? Apparently they aren't handling lease renewals?

I would write a letter that both expresses how important they are while dropping the rent increase news in it.


Dear Mr. X,

Can you believe it? It is already time to discuss your next lease renewal! I want to thank you for choosing to live at xxxxx and greatly value and appreciate your tenancy.

As you might expect, operating and maintenance costs are constantly increasing. Therefore we will need to ask for a modest increase in your rent to help continue the high quality of service you have come to count on. Effective x/x/x, we will be raising your rent by $xx to the new amount of $xxxx.xx per month.

We have enclosed some paperwork for you to sign for the upcoming lease. Please let us know your decision in writing as soon as possible. If we don't hear from you by xx/xx/xx, we will assume that you want to xxxxxxxx.

Thank you again for choosing to live at xxxxxx. We look forward to another great year serving you!

Again, grammar is not correct, sounds like they are on a game show... I would lol if I got that letter TBH... no offence... operation costs went up $150 a month? ya okay... again these people DEAL with money... it's as simple as, going market rate is X so it's time to keep in line with market rate.

OP who just gave us another drive by topic it would seem... is paying someone to do something... this should be in the scope of things...

mate sorry had no net .. great outdoors..
inGearX

inGearX to Sparrow

Member

to Sparrow
said by Sparrow:

said by inGearX:

per condo book .. they can do what they want ..

looks like ssme tenatts .. it is $350 every year + NEW rule: 2x maintainance fees!!

we 20+ tenants are suing them .. it will be aahistorical benchmark for thousands of other priperties..

Ah, OK. Didn't realize it was a condo. So it's not an "application" fee, but an increase is maintenance fees?

Is the double maintenance fee being paid ONLY by tenants or are owners who live in the units also being charged by the "new rule" of a double fee? Some condo boards vote to increase maintenance fees of only units that are rented as opposed to owner-occupied. That "new rule" better be allowed and must be documented and added as an amendment. You may want to look for any "special risk" clauses in the original offering plan. These are the laws that govern NY condos: »codes.lp.findlaw.com/nyc ··· /RPP/9-B

So the developer owns and runs the management office as well?
Does the developer still own the rental units that are facing the increase?
How many units are there and how many are owner-occupied?
How many are rented and how many are vacant?

Used to work for developers in the city - one owned 82 buildings in NYC and the 5 boroughs by the time I left.

Yes, a lawyer may be able to help, but the first place to look is the condo documents, condo declaration, bylaws and the offering plan. If there are no rules set down, it may be allowed. The Board of Managers is required by law to have copies of all documents available for inspection.

just the owner is made to pay 2x maintainance for every 1 or 2 year lease signed :/

they just did that out of the blue! why not 3x.. or 4x next year ..

yes .. owners gor together .. looking into legality .. seems to be grey area!

thanks mate!
inGearX

inGearX to rody_44

Member

to rody_44
said by rody_44:

Thats a double edged sword, Sure its only 5 percent. But its that 5 percent you are willing to lose a good paying tenant over. The may feel the same. Ide either do it in person and feel them out or not do it at all. That 5 percent gets lost quick on a vacant unit or even worse a nightmare of a tenant. Good tenants know they are good tenants and they already left you know how they feel last year. You more than likely have a decision to make. In person you at least have the option of backpeddling. A letter more than likely just forces them to make a decision than and there. You may not like that decision and as you yourself said, its only 5 percent.

you are right ..

i would pay them a visit .. if i was not traveling on other side of the world ..

hmmm a phone call might be due .. good advice from u and everyone!
inGearX

inGearX to IowaCowboy

Member

to IowaCowboy
said by IowaCowboy:

$650 application fee, I suspect this may be a sublet. Most landlords have a no subletting clause in their lease.

I've lived in the same unit for the past 13 years with only two rent increases (knock wood). Reason: good tenants that pay on time are worth their weight in gold. You can price a good tenant out and end up with one that trashes the unit, doesn't pay and you spend the good part of a year going to court trying to evict them.

true be that!

i pick them most carefully .. its hard ..
inGearX

inGearX to Termites

Member

to Termites
said by Termites :

The smart way to do this is have a automatic Cola adjustable in the lease.

but it is a new lease ..
inGearX

inGearX to Critsmcgee

Member

to Critsmcgee
said by Critsmcgee:

said by IowaCowboy:

I've lived in the same unit for the past 13 years with only two rent increases (knock wood). Reason: good tenants that pay on time are worth their weight in gold. You can price a good tenant out and end up with one that trashes the unit, doesn't pay and you spend the good part of a year going to court trying to evict them.

Your situation is unique to just you. A good landlord will do increased annual like clockwork. It's a business not a charity. Costs go up each year and you have to increase rent to compensate for that fact. No increase for a few years means the landlord is losing money and now needs to find a new tenant or continue to lose money. No matter how 'good' a tenant is they aren't worth losing money over.
said by rody_44:

Thats a double edged sword, Sure its only 5 percent. But its that 5 percent you are willing to lose a good paying tenant over. The may feel the same. Ide either do it in person and feel them out or not do it at all. That 5 percent gets lost quick on a vacant unit or even worse a nightmare of a tenant. Good tenants know they are good tenants and they already left you know how they feel last year. You more than likely have a decision to make. In person you at least have the option of backpeddling. A letter more than likely just forces them to make a decision than and there. You may not like that decision and as you yourself said, its only 5 percent.

Is a tenant really going to spend hundreds or even thousands to move? Do they have the cash to secure a new lease before recovering the security from their old unit? Can they find a place cheaper then their current rent plus 5%? Most of the time they can't or they'd move anyways. The bond between tenants and landlord needs to go both ways. If there's no give and take it's going to go south fast. I wouldn't call them a 'good' tenant if they don't understand cost increase and that means their rent does as well.

you are right ..

and i am just trying to pull the rent up a bit to where the market is ..

i made sure to check what the prices are .. and i am 15% bellow ..
inGearX

inGearX to dodanumbers

Member

to dodanumbers
said by dodanumbers :

Anyone who says they would never eat the increase I think never had a unit sit empty.

OP wants to up the rent $150 a month on a $2750 unit.

$150x12 months = $1800 a year increase.

18.3 months right now to = one month of lost rent at $2750.

So, up the rent, say they leave, yes people will leave, yes they have the money if we listen to the OP.

if that unit sits empty ONE month... it is a 18 month lose even at the new rental price.

Now depending on how fast units will be taken in the area, good money might say leave it be this year, inform them that they are *not* getting the annual increase this year because they are good tenants or whatever, then next year hit them. If they feel they are getting a deal odds are they will stay, and again, we went over the pay off times if they do leave and the unit sits empty.

yes i had my unit sit empty for some days .. to find good tenants ... it is a serious loss ..

hmmmm see here .. i am trying to undertand what to do ...

i did not increase last year ..
Critsmcgee
join:2011-12-02

Critsmcgee to inGearX

Member

to inGearX
said by inGearX:

i made sure to check what the prices are .. and i am 15% bellow ..

You can't afford to fall too much further behind the market. As you've seen operational costs will continue to go up and you can only increase rent so much each year without getting new tenants. If you want to be nice tell them you're only increasing the rent by what your operational costs are going up and that they'll still be 10% below going rate. You shouldn't have any issues there.

natedj
Elected
Premium Member
join:2001-06-06
Irmo, SC

natedj to inGearX

Premium Member

to inGearX
Why not just ask for a 6% increase with a statement saying that it would not increase for three years?

If they stay, then you'll get your increase and they will anticipate an increase in the next few years and most of all, you get to keep your "good tenants"
If they decline (which I doubt) since they are already getting a good deal and moving is also an expense and an inconvenience for them, then you should bring your rent up to the market prices and start screening new tenants.

The bottom line is this, if you need to have the increase, then there should be no pussy footing around asking for it. Ask for it and if they decline then search for someone willing to pay it. If you don't need the increase (and you're not influenced by what "the market" is telling you what you should charge) then you should leave will enough alone. If you're making money its okay to leave a little money on the table to keep good tenants.
18189353 (banned)
join:2014-10-28

18189353 (banned) to raellynow

Member

to raellynow
said by raellynow :

If you want me to get a CPA to find out the EXACT number of hours of rent lost... well lawl.

OP still loses money, that is the point...

Your point was it's more expensive to raise rent and lose a tenant then get a new one. That point was proven WRONG. In the long run raising rent or finding a new tenant make more profit. You need to factor in everything to get your ROI. I know it's tough to see a loss as positive but sometime you need to lose to win. Like the old saying goes: "You have to spend money to make money".

FYI: No need for a CPA. I've worked in finance for almost 20 years now.

fifty nine
join:2002-09-25
Sussex, NJ

fifty nine to inGearX

Member

to inGearX
said by inGearX:

i like this couple very much .. they make 100k + each in finances.. no complaints and they pay on time ..

...

i want to increase theur rent .. its more about HOW i say it ..

This is why I hate telling people how much I make. I have moved for $50 rent increase, my money is valuable.

I agree with nunya about the management company, they are raping you.
18189353 (banned)
join:2014-10-28

1 edit

18189353 (banned)

Member

said by fifty nine:

said by inGearX:

i like this couple very much .. they make 100k + each in finances.. no complaints and they pay on time ..

...

i want to increase theur rent .. its more about HOW i say it ..

This is why I hate telling people how much I make. I have moved for $50 rent increase, my money is valuable.

The OP isn't basing an increase of the tenant's income so that's actually irrelevant information. The OP's overhead went up so he needs to pass the costs along. He'll find someone else if the current tenant's don't want to pay as the rent will be 10% below market rate. The tenant gains nothing by moving in this case.

You moved over a $50/month increase? It would cost me more then that to move. Even with friends helping and using a friend's truck. My time is money so requiring me to pack and move is a HUGE expense. The OP's tenant's make ~$50/hour each or $100/hour together. There's no way they can move for less then 18 hours of their time.

fifty nine
join:2002-09-25
Sussex, NJ

fifty nine

Member

said by 18189353:

You moved over a $50/month increase? It would cost me more then that to move. Even with friends helping and using a friend's truck. My time is money so requiring me to pack and move is a HUGE expense.

In NY City you typically don't keep a lot of stuff in your apartment, well some people don't and I didn't. So moving wasn't hard at all, nor was it expensive. The truck cost less than $100 and the new place I found actually had lower rent.

robbin
Mod
join:2000-09-21
Leander, TX

robbin to inGearX

Mod

to inGearX
said by inGearX:

said by Termites :

The smart way to do this is have a automatic Cola adjustable in the lease.

but it is a new lease ..

Why is it going to be a new lease. Normally you do not need to write a new lease for a rent increase.
18189353 (banned)
join:2014-10-28

18189353 (banned)

Member

said by robbin:

said by inGearX:

said by Termites :

The smart way to do this is have a automatic Cola adjustable in the lease.

but it is a new lease ..

Why is it going to be a new lease. Normally you do not need to write a new lease for a rent increase.

Each year the tenant gets a new lease unless you do a multi-year lease which is very uncommon for residential leases. You don't raise rent any other time but at renewal time so the new lease includes the increase. Without a new lease the existing lease converts to month to month typically.
67845017 (banned)
join:2000-12-17
Naperville, IL

67845017 (banned)

Member

I just do an addendum.
18189353 (banned)
join:2014-10-28

18189353 (banned)

Member

said by 67845017:

I just do an addendum.

That would work as well. I couldn't imagine going to court then having to reference a 5 year old lease with 4 addendum's for example. Some government agencies won't accept an addendum either so for me I have to do new leases each year to cover myself.

IowaCowboy
Lost in the Supermarket
Premium Member
join:2010-10-16
Springfield, MA

IowaCowboy

Premium Member

said by 18189353:

said by 67845017:

I just do an addendum.

That would work as well. I couldn't imagine going to court then having to reference a 5 year old lease with 4 addendum's for example. Some government agencies won't accept an addendum either so for me I have to do new leases each year to cover myself.

Especially in Massachusetts, where the housing courts tend to favor the tenants. It can be nearly impossible to get a tenant out around here.