[quote=AN][quote=carlsbadworker]You are justified to raise rents after 3 years. But I wouldn’t do it personally if the rent is still 10% within the market price. The tenant may not move because the 3% increase, but psychologically, they may want to get back their money by calling your more for small issues and delay the needed maintenance.
You can ask them to sign a contract instead. I read that the contract is not really enforceable in CA but at least psychologically you get them more committed to stay.
But I would raise rents even if they are perfect tenants after 5 years (unlike AN)…but I will always price it under the market (e.g. 5-10% if they are perfect tenant). In fact, 10% under market is my threshold. I will try to keep it between 5-10% below market for perfect tenant.[/quote]But flu’s rent is currently only 7-8% under market rent. Time and stress is not free. What you said in your first paragraph is the reason why I wouldn’t raise rent on a good tenant who don’t bother you.
I currently have a tenant who signed a 5 year lease with me. At the signing of the lease, it was market rent, but right now, it’s probably about 10% below market. When the lease is up, I don’t intend to raise the rent, since it has been pretty hassle free. So, I say a few hundred dollar a year is a worthwhile price to pay for having a hassle free tenant. I general rule is, don’t raise rent on good tenants. Raise rent to market price with new tenants and raise rents for bad tenant to get them to move.[/quote]
My labor is cheap… Look at how long I’m taking to fix my timing belts on my audi… Lol…
In all seriousness, I see the arguments both are making on this and I kinda go back and forth on this too.
In the bay area, this is a no brainer. I would increase the rents simply because well, everyone there is use to the insanity of the rental/housing market there..
For the other rental elsewhere in SD, the tenant pool isn’t as good and currently I have a good tenant, so for that I’m fine with keeping things as is.
For this particular one, however, not sure… It’s in high demand, there won’t be a problem with the tenant pool, turnarond is probably less than a month, and I’m slightly inclined to think the current one won’t be moving. Anyway, I can think about it some more.
