Fred says.... RAISE YOUR RENTS!
Copyright 2021 FRED GRUNEWALD
The Importance of Keeping Your Rents Current
Don’t let another year slip by without keeping up with the current market rents. If you get in the habit of waiting too long to raise your rents...before you know it, several years have passed without making increases and you loose thousands of dollars every year .
Owning and managing my own rental properties, I know how it is to procrastinate and delay notifying my tenants regarding rent adjustments. To help keep me on track, I have an annual checklist to evaluate rent increases, repairs and capital improvements (roofs, carpet, vinyl, fixtures).
I stay updated by watching the rental section on various websites and watching "FOR RENT" signs on similar properties in my area and asking other landlords what their properties are renting for.
When the lease renewal time comes, a simple letter to your tenants explaining that " Due to the increase in expenses...water/sewer, insurance, property taxes (especially property taxes!) going up, it will be necessary to adjust the rent up in the amount of $X. We appreciate your tenancy and hope that you understand our situation".
Keep in mind that when you decide to sell your income property in the future, the value will be based in part on the income it produces. Many of my clients haven’t made rental adjustments for over five years!
It makes my job a bit more difficult when they hire me to sell their property with low rents.
To justify the asking price of a property, I can provide a rent analysis for the new buyer, showing what the rents should be. It is better to have the property generating income at the true market or at least somewhat close to the market rental income.
Start a checklist to help you evaluate your property on a yearly basis. Keeping up with the exterior maintenance and landscaping will make your tenant proud of their home and set a tone that you expect more than what the common landlord expects.
A quality property will get you quality tenants.
Being a good landlord that keeps your rents "up to date" not only improves your cash flow, but increases the value of the property faster than the next door landlord who never raises rents and never maintains his property.
When you decide to sell your multifamily property make sure you choose an agent that specializes in multifamily properties. Please contact me if you have any questions regarding multifamily properties. Hopefully we can assist you in the future.