by what the surrounding neighborhood will bare. calling other rentals in the area is a good gage. if you check enough locals you will have a good idea of what the market in your area will bare. %'s does not reflect higher or lower income areas or "extras" like pools, bad or good neighborhoods, how close to malls ect...kenmax
I bought a property with a Section 8 tenant paying 850. Others were paying 700-750. I raised all those to 800. Some of them complained. Similar apartments are renting for 900-1100 but I don't want to shock rent-paying tenants who have been there for years. I have positive cash flow with the rents I charge.
Good Day to you: Most of my rentals are the top of the line for the neighborhood and I charge accordingly. I routinely do general maintenance to each of my properties which shows a preceived value to my Tenants. When I buy a new property I always call the competition and then set my rent at about 10 - 15% higher. Put out a sign or ad in the local paper (AFTER it is rehabbed) and start taking applications. I very rarely have a property stay vacant for more than a week after it is rent ready. I then raise my rents every other year by 10 - 15% and have never lost a Tenant yet.
Definitely go by the market. And make sure you understand your place in that market. Calling the competition is a great idea, but I suggest that you get out and take a look at what the competition is offering.
I charge near the top of the market, have a very low turnover rate, and have never had an apartment stay empty for longer then a month. Why? because I take care of my properties. If you're this way, don't be afraid to ask for a fair rent. Rentals right next door to my properties charge less by as much as $50 per month, but they stay empty for months at a time. A few more months and I'll be talking with the owners about buying the properties they can't seem to manage right.
I have heard of investors doing a little research and coming up with an "average" inflation rate and increasing it by that much! I intend to raise my rentals in the fall by 3% (I found an article of interest rates for NJ)... This will bring a $700 rent to $721. This is a decent increase - but will put me more in range with the current market rates.
You have to consider the increase in taxes and sewer bills, etc. I met a guy who gives only 6-month leases so that he can pass on the increases in his bills
by what the surrounding neighborhood will bare. calling other rentals in the area is a good gage. if you check enough locals you will have a good idea of what the market in your area will bare. %'s does not reflect higher or lower income areas or "extras" like pools, bad or good neighborhoods, how close to malls ect...kenmax
I bought a property with a Section 8 tenant paying 850. Others were paying 700-750. I raised all those to 800. Some of them complained. Similar apartments are renting for 900-1100 but I don't want to shock rent-paying tenants who have been there for years. I have positive cash flow with the rents I charge.
Good Day to you: Most of my rentals are the top of the line for the neighborhood and I charge accordingly. I routinely do general maintenance to each of my properties which shows a preceived value to my Tenants. When I buy a new property I always call the competition and then set my rent at about 10 - 15% higher. Put out a sign or ad in the local paper (AFTER it is rehabbed) and start taking applications. I very rarely have a property stay vacant for more than a week after it is rent ready. I then raise my rents every other year by 10 - 15% and have never lost a Tenant yet.
Good Luck and make $$$
Tom
Definitely go by the market. And make sure you understand your place in that market. Calling the competition is a great idea, but I suggest that you get out and take a look at what the competition is offering.
I charge near the top of the market, have a very low turnover rate, and have never had an apartment stay empty for longer then a month. Why? because I take care of my properties. If you're this way, don't be afraid to ask for a fair rent. Rentals right next door to my properties charge less by as much as $50 per month, but they stay empty for months at a time. A few more months and I'll be talking with the owners about buying the properties they can't seem to manage right.
Good property under good management seems to be the key here. They will take care of you if you take care of them.
Thanks.
Tom,
How do you find your tenants?Do you advertize in the newspaper? Do you use any property management company?
Thanks.
I have heard of investors doing a little research and coming up with an "average" inflation rate and increasing it by that much! I intend to raise my rentals in the fall by 3% (I found an article of interest rates for NJ)... This will bring a $700 rent to $721. This is a decent increase - but will put me more in range with the current market rates.
Good Luck!
[addsig]
You have to consider the increase in taxes and sewer bills, etc. I met a guy who gives only 6-month leases so that he can pass on the increases in his bills
I don't know about other states, but they are raising property taxes like a kid in a candy store in CT, both assessment and mill rates.
make sure locallaws don't cap the amount you can increase the rent.