reasonable rent increase, is there an average percentage? : ezLandlordForms

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Cynthia H

started a topic over 12 years ago

I'm an Ohio Landlord. I have 4 houses, all are month-to month at this time. I want to have all the leases begin and end at the same time, and think June 1st, 2012 would be perfect. What is a common, reasonable rent increase? One tenant is Metro housing, and pays only $100 of the $625. She's been with me 3 years, with no increase. The others are between 1 1/2-3 1/2 years, all without a rent increase from me. taxes, insurance, trash and water have all increased, so I feel it's time. Is 15% too high? I was thinking about 5-8%. Thanks! C.

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Juan R

said over 12 years ago

I'm a Las Vegas landlord of a 3 bedroom, 2 bath SFR in Solera Anthem-a beautiful planned community in Henderson, Nevada- just outside of Vegas. The house has a new fridge, washer, dryer, and all built-in appliances, and an attached 2-car garage. My renters are 3 senior ladies and 1 small dog. The house is now 5 years old; based on previous poor service from a realtor to show the house and find suitable tenants, we had rented the house for 1 year at below-market rent of $ 850/month. We have a negative cash-flow on the property at this rent. It is time to renew their lease, and I decided to raise the rent to $900/month--which is still low rent for the house and location. For a rent increase of $50 more in rent, that is only $12.50/week for 3 adults + 1 dog. This rent increase is only 5 1/2% of the current rent of $850; I am hoping that my renters stay to renew the lease. But you never know what to expect from tenants. I think that a rent increase of 5% to 8 % is a justifiable, reasonable amount.

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Cynthia H

said over 12 years ago

Thanks, Chery & Juan. I hope your renters realize they've had a good deal, and are still getting a good deal! Negative cash flow is NOt fun! I've decided to raise my Metro girl's rent only $10, and the rest 4-7%, enough to bring them closer to real vaule, and keep them happy. Then next year I plan on raising it 2%. i read up on a site called Bigger Pockets, and learned alot!! Cynthia

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Mikee L

said almost 12 years ago

Reasonable rent increase is 2.5%. This is very general and each situation is influenced by market conditions, quality of tenant(s) and how much risk factor the Landlord is willing to take. If the house/apartment has a mortgage and you need the rental income to cover that cost, then it might be better to be conservative and be slightly under market. If your able to sustain tenants moving out and you want to raise rent to market value, then you might be inclined to raise the rent to market and possibly risk losing a tenant. It's a balance of Landlord needs and market value. When I 1st became a landlord, I was very conservative and rented under mkt... but after a few years I began inching up the rent on the average of 10.00 to 25.00. I am still below mkt, not as much, but renting the rent in small bits is less of a shock and more difficult in large chunks.