Should I Raise Rent?
Whether or not to raise rent is really a matter of personal philosophy. We have investors that rarely if ever, raise the rent once they have a good, low-maintenance, timely-paying tenant. They rather take the monthly hit than risk losing one to two months of rent and spend the to clean, rehab, and remarket the property. Others raise it annually, even if just by one or two percent, to ensure that their property continues to cashflow in the face of inflation, increasing property taxes, and other expenses.
What we at 24 Hour Property Management recommend is not to get attached to one way or the other, but to examine each renewal in a vacuum and to use data to drive your decision making. We conduct a market analysis to see what the going rate of a property is, and that coupled with the tenant’s history, we make a recommendation to our clients about raising rent for the next term. However, the decision is ultimately theirs. Make sure your agent or property manager is providing the data you need to make an informed decision.
A couple of things to consider. For those that do not like to raise the rent, they usually bring their rent up to the market when they get a new tenant. But what if a tenant never leaves. It’s an extreme example, but we inherited a tenant that didn’t have rent raised in 17 years and they were almost $1500 under market. And on the other hand, for those that always raise the rent, is it worth the expenditures and losing a good tenant over what sometimes is $300-$600 a year?
Contact 24 Hour Property Management, Inc.
If you have questions about what 24 Hour Property Management might recommend in your situation, or if you have any questions at all please contact us so that we can answer your questions and advise you. You can reach us seven days a week at 949-409-8585 or you can check us out on the web at 24hourpm.com.