Forum Replies Created
-
AuthorPosts
-
an
Participant[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.
Participant[quote=The-Shoveler][quote=spdrun]I suspect another 25 basis points and the economy will be entering the deflationary sh!tter.[/quote]
From the way I understand it The fed will be back to aggressive mode to cool the dollars rise.But anyway regardless it will still be Game ON for ReFi’s[/quote]I’m defintely having my finger on the trigger. Current rate is 1/8% higher than my rate.
Participant[quote=spdrun]
Don’t forget about other costs of turnover like paint, extra cleaning, maintenance & repair issues, etc.
If maintenance is needed, it can be done anyway. Paint is cheap. And I’m happy to do everything myself so labor is “free.”[/quote]Time is not free.
Participant[quote=spdrun]Why raise prices in any business to reflect increased costs of doing business? It’s a business, not a charity last I checked.
If the tenant gets pissed off, then they know where the door is.[/quote]No one is saying it’s a charity. But there’s a cost to raising prices. I don’t think it’s worth the hassle of vacancy and time to find new tenants, hosting open house/showing the place, etc. All of those are cost too. Those are the cost you don’t see until your tenant move out. Increasing rent will increase their likelihood of moving.
Participant[quote=livinincali][quote=AN]You can do that, but you’re increasing the risk of your renter moving. You have to decide for yourself whether paying for vacancy, cleaning, maintenance is less than the extra rent you get. Sometime it is, sometime, it isn’t. You might think 1-2% hike is far from unreasonable, but it doesn’t matter if it reasonable or not. It’s all about if that’s enough to make your tenant move or not.[/quote]
1 month of vacancy is 8.3% of the total annual rent. It takes 2.8 years before you break even on a 3% increase in rent if increasing the rent results in the tenant moving out. Obviously it all depends on how inconvenient it is for the tenant to move and if they might already have plans of moving. Some people will just pay the extra $25-50 month, some will look at at other options and still decide to stay. Some will just move because they don’t like the principal or were just looking for an excuse to move anyways.[/quote]Yep, you’re just increasing your risk of having vacancy by raising rent. How much risk, only you can guess depending on your relationship with your tenant. But it’s definitely an increase compare to not raising rent.
Participant[quote=spdrun]It’s absolutely part of the cost of doing business. And should be accounted for via rent hikes to preserve profitability. If renters don’t like it, they’re free to move out. Point being that a 1 or 2% rent hike per annum is far from unreasonable.
5 to 10% every year in this market would be unreasonable, but a per cent or two is completely fair.[/quote]You can do that, but you’re increasing the risk of your renter moving. You have to decide for yourself whether paying for vacancy, cleaning, maintenance is less than the extra rent you get. Sometime it is, sometime, it isn’t. You might think 1-2% hike is far from unreasonable, but it doesn’t matter if it reasonable or not. It’s all about if that’s enough to make your tenant move or not.
Participant[quote=spdrun]Condos also have HOA fee hikes to deal with. You tend to have a 5-10% hike in HOA fees every few years, if not more often.[/quote]That’s part of the cost of doing business. Renters don’t care.
ParticipantI agree, every situation is different and you have to deal with rent increase differently based on the renter pool. I signed a 5 year lease with my tenant. They take a great care of the place, pay on time, and don’t bother me. Even after 5 years, I don’t intend to increase their rent. It’s a you scratch my back, I’ll scratch yours type of thing. With a condo though, the renter pool tend to be more transient, so the likelihood of them staying 5+ years is slim anyways.
ParticipantSince your tenant have been good, definitely raise it 3-5% seems fair. You’re still below market, so it’s unlikely the tenant will move. If they move, they’ll have to pay for moving cost, having hassle of moving, and paying more rent. So, they will probably stay. If your tenant is trouble some, increase rent to market value or slightly more.
ParticipantDecember 12, 2014 at 9:48 AM in reply to: If you are going to write a letter asking to buy people’s home….. #781023ParticipantLoL, $500k isn’t even enough for my house in the ghetto, much less yours in that swanky zip code.
ParticipantWell, Carlsbad is technically its own city. So, they can create business centers and court businesses independent of San Diego. So, it wouldn’t surprise me if they will as they grow. Same can be said about San Marcos too with CSU San Marcos.
Participant[quote=spdrun]
So let’s nationalize the entire American banking system!
Wouldn’t be a bad idea to kick the Wall Street scum to the curb.[/quote]Maybe then, the line to talk to a teller will be as efficient as the lines at the DMV.
ParticipantSD is not at the same point as LA, but it’s definitely heading in that direction. Just look at all the high rises going up in UTC and Sorrento Valley. The traffic pattern says it all. Heading into Sorrento Valley in the morning is hell but heading out is pretty easy.
-
AuthorPosts
