RAISING RENTS A SUBJECT THAT NOBODY REALLY LIKES

If you own income property, the amount of rent collected has a direct bearing on the value of the entire property. Many buyers/investors look for properties that are renting under market to see the potentials if purchased. For those that rent apartment and homes and want to be charge a fair or a premium price, raising the rent may look easy but have consequences

LANDLORD THINKING

The owner wants either maximum return or fair return. That depends on the owner and his cap rate or return on investment strategy. This is different for everyone. Landlords that try to optimize their investment and command top dollar also have to keep the property up to above average standards both inside and outside of the units to demand that type of return.

LANDLORD ALTERNATE THINKING

For those landlords that prefer a steady long term return and are happy to have things run smoothly, those rents will be more lenient and the potential for both landlord and tenant to prosper stays on point. Everyone has incentive to make it work each one content in the part they play

RENTER THINKING

From the renters point of view, if they have been living in a place for more than a year and abiding by the rules etc, they would prefer to be left alone hoping that their payment history and conduct supports that. If they are targeted for an increase, then it is their hope it is a modest one allowing them to continue

POOR DECISIONS COST EVERYONE MONEY

Where it can get dicey is if a landlord raises rents without doing the homework and by doing so puts a strain on the renter and the renter ends having to move out, then perhaps this is a management style that needs to be examined. Having someone move out and then preparing the unit for someone else is costly

IS IT WORTH IT ....LANDLORD POINT OF VIEW

In addition, the loss of rent during the clean up stage plus the costs of advertising and repairs make it an expensive decision. The rule I always went by was to never raise rents more than the market could bear. Then, you assess the renter and see the value they bring by renting your place. Perhaps no increase or a modest one can be considered.

IS IT WORTH IT ....TENANT POINT OF VIEW

Having to look for another place, pack everything up, take time off, hire help, move, unpack and re-establish a nest all takes a toll. Consequently the renter will put a value on this and if it is reasonable, stay. If not, move. Having a rapport with your renters helps keep the channels open and caters to everyone's best interest so that this can be discussed

Think it through when it comes to the subject of raising rents

Richie Alan Naggar          Ran Right Realty       Riverside, Ca

Real Estate Broker and author of  popular "PEARLS SERIES"...books on LIFE and LOVE

Richie@RanRightRealty.com         Richie@Pearlsforthesoul.com

PEOPLE FIRST...THEN BUSINESS