To Raise or Not to Raise? : ezLandlordForms

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MelissaAndMartha O

started a topic almost 10 years ago

I know I learned in the past how to figure this out, but anyway…could someone tell me whether it is better to get rid of a longtime tenant who is paying $300 per month below market rent but have to spend about $6000 in upgrades or to keep the tenant. BTW, the tenant rarely calls for repairs. I would appreciate your responses. THX.

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Ross A

said almost 8 years ago

I recommend to keep your tenants and try to raise the rent. Many landlords think if the ask tenant to pay more, renters will terminate the lease right away. I understand, you don’t want to upset your tenant, but you desire or need the additional cash flow. $300 is a large sum and you shouldn’t raise rent on that amount in one step. So read this guide https://rentberry.com/blog/tenant-turnover.I t will help you to raise rent wisely.

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MelissaAndMartha O

said almost 10 years ago

Thank you. Everyone seems to be leaning toward keeping the long-term tenant. I am going to have to raise her rent some (still below market rate) and I'll provide limited upgrades. I know she would definitely leave if the rent is raised to market rate because she doesn't make enough money.

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Deborah M

said almost 10 years ago

I've had a long-term, excellent tenant who was paying below market rent. She asked about upgrades and I told her we'd be happy to consider the upgrades but to pay for them, we'd have to raise the rent to market rates...the choice was hers. She decided not to have the upgrades as she preferred the lower rent. We were willing to pay for upgrades to keep the tenant. If she moved, we would have upgraded anyway and raised the rent for a new tenant so giving her the choice was easy.

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MelissaAndMartha O

said almost 10 years ago

Great points. Thanks Jessica!

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Jessica W

said almost 10 years ago

I would suggest keeping your good tenant if at all possible. I agree with Derrick that you should discuss improvements with the tenant and how the rent could change if improvements were made and if they would be willing to pay a higher rent due to the improvements. If you do decide to make the upgrades and find new tenants when you figure out the cost of the upgrades also keep in mind the lost rental income for the time it takes to make the upgrades as well as the time it may take to get a new tenant once the upgrades are made.

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MelissaAndMartha O

said almost 10 years ago

Thank you Derrick!

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Derrick D

said almost 10 years ago

If they are a good tenant and are keeping the property in good condition you would want to keep them. If you make upgrade to the property it is likely that your tenant will be appreciative and if you strike a deal with them they may even be ok with paying a higher monthly price. I find keeping a great tenant is amazing but sometimes impractical. You really need to weigh your options, pros and cons.