Monday, December 14, 2015

How to walk the tightrope of raising tenants’ rents

You likely find that the cost of operating your rental homes continues to increase year after year. Be it labor, insurance, or taxes … rarely do prices fall. And that’s not even considering a big expense, such a complete air conditioning system. So where does that leave you when it comes time to renew a tenant’s lease and raise the rent? It makes the decision even harder if you have a good tenant you’d hate to lose.  

We still live in a free market society; you can try to charge whatever you want. But to stay in business your rents do have to stay in line with the supply and demand in your area. What’s more, I’d rather have a good tenant who pays $1,200 a month than a problem tenant who pays $1,500.

Most tenants are honest, hard-working people who simply want a decent place to live. So run your rentals like a business that has customers. And if you want to keep good, long-term tenants who will not balk at a reasonable rent increase, be proactive.

That means inspect regularly, respond quickly, and be creative. Look at how to improve things throughout the year. Reward early payments, offer extra services like direct deposit, or tenant insurance. Even a gift certificate to a local pizza joint can go a long way.

Other good gestures, for example new paint or carpet or even a security system if they pay the monthly monitoring, could also assure tenants that they’re getting their money’s worth.  

Want more ideas on how to become a successful landlord?
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