patrick.net

good idea making them feel like they're getting something in return.

But I'm tempted to just raise it. If they move out I can easily replace with someone new who feels like they're getting a good deal.

In the end it is your property. If you are willing to risk losing known good tenants for some that might not be as good, then you can go for it. It would be nice to give them plenty of notice so they can find somewhere else if they don't like it...don't be a dick and give the minimum notice about the increase in hopes of keeping them trapped.

This is why inverters should not be allowed to by homes. They will take, take, take, away money from families with children and grow fat and rich. Now the family has to pick up and find another home in the same school district or take three hundred dollars from their budget. This is a perfect example of wealth redistribution.

and what about the $300 being taken from my budget each month?

like I said I'm not trying be greedy. It's just business.
at some point subsidizing someone else's lifestyle at your own expense goes beyond nice. It's just foolish.

If investors where not allowed to purchase homes for profit, the price of single family homes would not be the height they are today. More people would be able to afford a home of their own. One of the first questions on a psychological evaluation is, ( have you moved in the last year?). The reason they ask this question is because moving is traumatic and an extremely stressful event. This type of stress is constantly imposed on the American people and their children. It also destabilizes our communities by not allowing time for children to develop attachments to others or feel a sense of security knowing at any moment their life can and will change. It's no wonder so many adults have grown disconnected from their environment and the people around.

Toothfairy, you are not subsidizing your tenants lifestyle, your tenants are subsidizing your life style.

toothfairy says

and what about the $300 being taken from my budget each month?

like I said I'm not trying be greedy. It's just business.
at some point subsidizing someone else's lifestyle at your own expense goes beyond nice. It's just foolish.

Indeed, it IS a business. There's no arguing against that. While it is frustrating when a landlord raises the rent, "because the market is going up," and you know full well that the lower rent was still providing them profit, it is the way it is. GREED. Sadly, it is sort of the thing driving our entire economy. If the market will bear it, then you CAN crank the rents up. Since it is business, I guess that there is no real "right or wrong" to it. Anyone that rents and thinks that the landlord is supposed to be their friend is delusional.

Now, personally...
If $3k/month covers all expenses and you are still turning a profit, but you up the rent $300 because you can, you are a dick. Greed may grease the wheels of the economy, but it is still a wretched human trait.

Raise it 20%! Don't do any improvements, they shouldn't be renting anyway. If you got a look at their savings you'd be kicking yourself in the ass. They are living off of your equity and it needs to stop. Also, the higher rent will mean you get a better tenant than before. Studies have shown a high correlation between net worth and moral character.

Lastly, make sure you screw them on the deposit. They have socked away 10's of thousands living off your house, it only makes sense you get some of that back. Bastards. I wouldn't even tell them to leave. Just put down a "For Rent" sign in the front yard and let them figure it out. Be the landlord you know you can be.

By all means raise the rent. I suppose the worst that will happen is that your current tennants will find another place.

Its very simple, if they feel you are charging to much, they will up and leave...for sure.

Then you have to go through the process of advertising it again, taking time off work to show people, and for what, and extra $3600 a year, which if you miss one months rent, you are already down for the year all for nothing.

If it was me, and as you say they are good tennants, i would leave well alone, and continue at the present rate.

But hey, as you say "Its just a business" which is what your tennants may say as they close the door on the way out.

bmwman91 says

If $3k/month covers all expenses and you are still turning a profit, but you up the rent $300 because you can, you are a dick. Greed may grease the wheels of the economy, but it is still a wretched human trait.

What about when rents go down, but your monthly nut is still $3k. Should the tenant still pay you the 3k for the same reason? What about when you lose a tenant and then can't rent the place for 3 months, who pays for the monthly expense during that period? What's in it for them?

Andy S says

By all means raise the rent. I suppose the worst that will happen is that your current tennants will find another place.

Its very simple, if they feel you are charging to much, they will up and leave...for sure.

Then you have to go through the process of advertising it again, taking time off work to show people, and for what, and extra $3600 a year, which if you miss one months rent, you are already down for the year all for nothing.

If it was me, and as you say they are good tennants, i would leave well alone, and continue at the present rate.

But hey, as you say "Its just a business" which is what your tennants may say as they close the door on the way out.

As a business you have to think long term. Yes my 1 year profit could be wiped out by the turnover but the higher rent over the next 5 years will more than make up for it.

swebb says

What about when rents go down, but your monthly nut is still $3k. Should the tenant still pay you the 3k for the same reason? What about when you lose a tenant and then can't rent the place for 3 months, who pays for the monthly expense during that period? What's in it for them?

If rents in the are going down...you also don't necessarily have to do anything, unless the tenants start bugging you. I never once got my rent reduced because the landlord offered. I had to ask & negotiate. Obviously, renting involves 2 parties with opposing incentives for action. You can let the rent "float" and risk tenant turnover, or you can keep it constant and that can buy you, the landlord, a bargaining chip. "So you want lower rent because the local market is a little lower now? Well, keep in mind that I didn't raise it when the market was more expensive."

Anyway, once you are covering all costs and pulling 5%+ profit on top of that, it seems sleazy to crank the rent up more. But, as stated before, it IS just business, and most business is sleazy & not very nice. It's just how it is, regardless of whether or not someone is a dick for participating.

bmwman91 says

If rents in the are going down...you also don't necessarily have to do anything, unless the tenants start bugging you.

Imagine the tenant moves out. Now you have to put your $3k/month (costs to you) place on the market, but the market has dropped to $2,500 / month. Do you list it at $3k / month and hope the tenant will pay the above market rate because that's what it costs you? Or do you expect to be able to get market rate, even though it means you are losing money every month?

Another way to look at it is that the "how much it costs to maintain" line in the sand is arbitrary. I was renting a place that cost the landlord $1,000 more per month in PITI than I was paying rent (due to bad decisions on his part). Increasing the rent to that level would have sent me packing. But if the place was paid off, and his costs were only a few hundred per month in taxes...should he rent it to me for that?

Carolyn, what's an "inverter"?

swebb says

Imagine the tenant moves out. Now you have to put your $3k/month (costs to you) place on the market, but the market has dropped to $2,500 / month. Do you list it at $3k / month and hope the tenant will pay the above market rate because that's what it costs you? Or do you expect to be able to get market rate, even though it means you are losing money every month?

It ultimately depends on whether or not you want the tenant moving out. If you are signing a new lease with a new tenant, anything goes as far as I am concerned. I was focused on the "keeping the current tenant" side of the discussion. And, as long as toothfairy gives the current tenants ample notice of a rent increase so that they can decide what to do & find other accommodations, it's not a huge deal. If rents have gone up & the market is as hot as he is saying, he will have no issues finding someone else to pay a higher rent.

I see no issue with signing new tenants at the going market rate. Once a tenant is in, it is up to the landlord to determine whether to change the rent on them when the lease is renewed. If the landlord is going to raise the rent, then he owes it to the tenants to inform them in advance...lest he be branded a dick. I am sure that there is some minimum amount of time prescribed by law. Personally, anything less than 30 days is a dick-move.

Anyway, there's no point in arguing about whether or not I think that a landlord is a dick. Whether or not I think highly of them is largely immaterial in most cases. If it is just business, then how I feel about them as people shouldn't matter. In my experience, many of them are dicks, period. Despite that, it is still a better value than buying in the part of the BA that I am in, so I deal with it.

What is a good tenant that pays their rent on time every month, is in a stable financial position and take care of your place worth?

Get a bad tenant in there, that can't pay their rent or just chooses not to and stays in the house for half a year for free, completely screwing you.

But that's just me. A good, longterm tenant has a $$ value from turnover and risk. Determine what that value is.

You should charge whatever rent amount will make you the most, balancing the amount of effort you will expend and also balancing how long you will own the property.

The anti landlord posts are ridiculous. But I'd guess that's what realtor/troll OP was angling for.

dodgerfanjohn says

But I'd guess that's what realtor/troll OP was angling for.

lol

Is toothfairy a known / admitted realtor?

Maybe raise the rent 5% if you want to keep them but keep up with market rates.

Thats true not sure why the post says Oakland but this rental is not in Oakland its in the heart of silicon valley and I havent had a problem finding good tenants.

toothfairy says

Thats true not sure why the post says Oakland but this rental is not in Oakland its in the heart of silicon valley and I havent had a problem finding good tenants.

That is the location indicated by the zip code in your profile.