Situation
The cost of your rental unit continues to increase due to increases in taxes, maintenance, insurance and just about everything connected to your property. But with this down economy, can you really raise rents?
Response
There are many factors to consider when you want to increase rents. While your costs may be rising, your tenant or potential future tenants are also experiencing cost of living increases and that factor must be considered.
The biggest factor is what is happening in your market. If your current tenant decided to move to a similar unit in a similar neighborhood, what would he have to pay for rent? You can figure this out by going to some of the internet rental sites that specilize in your type of property and compare.
If your tenant can rent the same home in a similar neighborhood for a lot less than what you are charging, then your tenant will probably move. If comparable property rents for a little less, the tenant may or may not stay. If the rents are higher, he will stay.
The trick is to balance the rent you are charging with the rents in the area. If you want to be sure that your tenant stays, keep the rent a little below that of other units on the market. If you are willing to take a little risk, keep your rents at the same rate as other homes in the area. If you don't care if you lose the tenant, raise the rents above the market.
Keep in mind that having a vacancy is expensive. It takes about 2 months to rent a unit after it is ready to rent. It costs a fair amount of money to fix up a unit after a tenant leaves. If the tenant has been there for several years, it could cost thousands to paint, install carpet and blinds and replace all of the other things that have worn out over the years.
If you decide not to raise the rents, I would suggest that you advise the tenant that you feel they are great tenants and that you invite them to sign a new 1 year lease at the same rate because they are such good people.
Another thing to consider is whether you community has any rent control limitations on raising the rent.
Showing posts with label Rent. Show all posts
Showing posts with label Rent. Show all posts
Wednesday, March 2, 2011
Wednesday, February 23, 2011
My Tenant can't pay all of the rent. Should I accept a partial payment?
Situation
My tenant has approached me with half of the rent payment and wants to make an arrangement to catch up. Should I accept the partial payment?
Response
It's great when a tenant communicates, even if it isn't the greatest news!
We all know that the economy is a challenge. Many tenants are still losing jobs and hours are being cut back for others. If you haven't experienced a problem up to now, you are very lucky.
The important thing to do is to keep open lines of communication. The more you communicate the better the decisions you can make.
I would accept their partial payment and work out a payment plan with them. Ask them when they will make the next payment and how much the payment will be. It is important to be specific on both of these points so it is easier to follow up with them. Be sure to write down and give them a copy of the payment arrangement.
Each time you accept a partial payment, serve them with a new 3-Day Notice to Pay Rent or Quit. This reminds them that you can still take action for non-payment and it speeds up the eviction process if it becomes necessary. Advise the tenant that you will not act on the Notice unless the next payment is missed or they have not contacted you.
If they contact you when they are late on one of the payments be glad that they are communicating. Set up a new payment arrangement. It is important to collect some money at each payment date.
Don't let this continue indefinitely. At some point you should realize that they are in a home that is too expensive for them. You may suggest that they move to a less expensive unit. Be willing to let them out of their lease. Remember that it is cheaper to let them out of the lease than it is to evict them.
My tenant has approached me with half of the rent payment and wants to make an arrangement to catch up. Should I accept the partial payment?
Response
It's great when a tenant communicates, even if it isn't the greatest news!
We all know that the economy is a challenge. Many tenants are still losing jobs and hours are being cut back for others. If you haven't experienced a problem up to now, you are very lucky.
The important thing to do is to keep open lines of communication. The more you communicate the better the decisions you can make.
I would accept their partial payment and work out a payment plan with them. Ask them when they will make the next payment and how much the payment will be. It is important to be specific on both of these points so it is easier to follow up with them. Be sure to write down and give them a copy of the payment arrangement.
Each time you accept a partial payment, serve them with a new 3-Day Notice to Pay Rent or Quit. This reminds them that you can still take action for non-payment and it speeds up the eviction process if it becomes necessary. Advise the tenant that you will not act on the Notice unless the next payment is missed or they have not contacted you.
If they contact you when they are late on one of the payments be glad that they are communicating. Set up a new payment arrangement. It is important to collect some money at each payment date.
Don't let this continue indefinitely. At some point you should realize that they are in a home that is too expensive for them. You may suggest that they move to a less expensive unit. Be willing to let them out of their lease. Remember that it is cheaper to let them out of the lease than it is to evict them.
Friday, January 21, 2011
My tenant is late paying the rent.
Situation
It's the 6th of the month and I still don't have my rent. The tenant says they are going to pay soon.
Response
I am guessing that the rent was due on the 1st of the month. Your rental agreement probably has a clause for a penalty if the rent is paid late. If not, you need to start using new rental agreements.
Before taking more drastic steps you can call the tenant and see why they are late. If this is there first time being late, you might decide to give them a break. Make sure that if you make an arrangement with them that you pin them down to a specific date and amount of payment. Follow up your conversation with an email to them confirming the agreement.
If they aren't available or they don't return your calls, it's time to take the next step.
The next step that you should take is to serve a 3 Day Notice to Quit or Pay Rent. This notice should include their name and address. It should then explain that they are late with the rent and that the amount due is the contract rent plus the late fee. It will then advise them that if payment is not received within 3 days of service of the notice, you will take legal action to regain possession of the property.
You should then go personally to the tenant and hand them the notice. If they are not present, you can tape the notice to the door and then mail them a copy of the notice via regular mail service (not registered).
If the rent is not paid within the 3 days it's time to contact an eviction service to start the evicition or do it yourself if you have experience with that.
You can always negotiate with the tenant. But be careful. Promises do not pay your bills. Many tenants who are late paying rent have a million excuses and they can delay an eviction for months if you are not careful.
It's the 6th of the month and I still don't have my rent. The tenant says they are going to pay soon.
Response
I am guessing that the rent was due on the 1st of the month. Your rental agreement probably has a clause for a penalty if the rent is paid late. If not, you need to start using new rental agreements.
Before taking more drastic steps you can call the tenant and see why they are late. If this is there first time being late, you might decide to give them a break. Make sure that if you make an arrangement with them that you pin them down to a specific date and amount of payment. Follow up your conversation with an email to them confirming the agreement.
If they aren't available or they don't return your calls, it's time to take the next step.
The next step that you should take is to serve a 3 Day Notice to Quit or Pay Rent. This notice should include their name and address. It should then explain that they are late with the rent and that the amount due is the contract rent plus the late fee. It will then advise them that if payment is not received within 3 days of service of the notice, you will take legal action to regain possession of the property.
You should then go personally to the tenant and hand them the notice. If they are not present, you can tape the notice to the door and then mail them a copy of the notice via regular mail service (not registered).
If the rent is not paid within the 3 days it's time to contact an eviction service to start the evicition or do it yourself if you have experience with that.
You can always negotiate with the tenant. But be careful. Promises do not pay your bills. Many tenants who are late paying rent have a million excuses and they can delay an eviction for months if you are not careful.
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