7 Tips for Landlords When It's Time to Raise Tenant Rents

One of the inevitable consequences of owning rental income property is that from time to time the landlord finds it necessary to inform tenants that their rent will be getting raised.

The issue is not a slam-dunk. Rent increase is a sensitive subject that greatly impacts real estate owners and tenants alike for their own set of reasons.

The tenant, of course, is not going to be pleased that they will have to pay more to continue occupying the unit. Perhaps they can't afford to pay more. Or maybe it means having to do away with some simple pleasures or other goods and services. Whatever, a rent increase is never what tenants want to hear.

As a result, knowing full well how a rent increase could affect their tenants, property owners are confronted with their own fears and concerns surrounding the financial aspects of the decision.

The primary fear being, of course, that otherwise good tenants might decide to move out and leave the landlord with increased vacancies. Although this might be manageable for properties having many units, an increased vacancy rate for properties consisting of just a few units can be financially devastating to real estate investors.

Fair enough.

Real estate investors, nonetheless, are running an investment business that totally relies upon rental income and sometimes having to raise rents is the only way to make it profitable - or at least profitable enough.

Okay, so let us suggest some things for you to consider when rent increases are in order that might help minimize the risk of driving out your tenants. 

•   Avoid pure greed. If all you want is to produce more money from your investment without rhyme or reason than the other suggestions might not be relative and you may have to simply take your chances.

    

•   Understand your market. If your market area is generally saturated with other rentals than you might suffer a huge turnover of tenants due to a high supply-to-demand ratio. If supply is scarce, than the opposite is true and you might not suffer any turnover.

    

•   Know your property. How do your rental property's location, condition and amenities measure up to other rentals in and around the area? Tenants are less willing to endure the stress and cost of relocating over a nominal rent increase when you provide desirable features compared to other properties.

•   Know your tenants. How does your property's unit size measure up to tenant needs? For instance, your rent increase could motivate an accountant with several assistants occupying your small office space to relocate to a larger space. Or a single occupant in your two-bedroom unit to set off in search of a one-bedroom unit.

    

•   Watch your competition. If similar-type units are available just around the corner for less rent than you're proposing, chances are good that you'll lose tenants. If your rents are reasonably in line, than probably not.

    

•   Be smart. Modest increases given over consistent intervals are more easily understood than irregular ones that surprise and undoubtedly will alienate your tenants.

    

•   Offer a trade off. Perhaps a month-to-month tenant would be willing to sign a lease to get a rent that reflects less of a increase than otherwise proposed. This allows you to bump up your rental income somewhat and at the same time guarantees that you'll have an occupied unit during the term of the lease.

Rule of Thumb

Real estate investors will always run some risk when proposing rent increases because tenant expectations vary, circumstances vary, market conditions vary, and certainly personalities vary. Nonetheless, when the investor does his or her homework and then proposes an increase that has reasonable grounds, chances are good that the fallout will be minimal.

Here's to your real estate investing success. 

Should You Post Your Rental Property Details Online?

Online advertising provides easy access to anyone, anywhere and at any time and this is true for people looking for the best rental properties too. Regardless of whether people are looking for short-term or long-term rentals, chances are that they do not have the time required to look for what they need. In the current busy lifestyle, people are looking for ways that can make the works faster and in an efficient manner. Records say that nowadays more and more people are relying on the internet for finding any information they need and this is applicable to searching for rental properties too. This is why, it is recommended by professional realtors that people having properties and are looking for the right tenants can post the details about their houses on websites providing the facility to post rental property classified ad.

As these websites provide the opportunity to even post the photos, homeowners can be benefited. As the people looking for a house will look at the photos online, they will visit to see the house only when they are impressed by the pictures. This reduces the hassles involved in visiting each and every house and the owners can be benefited as they can show their houses physically only to those, who are impressed with the photos and are showing real interest towards hiring the house. Not only photos, the owners can provide whatever details they wish to post. Like for instance, if they have completely furnished their property, they can provide the details, so that they can expect higher rent.

In addition, most of the websites offering the facility to post rental property classified ad, provide this service free of cost. Once the appropriate local portal is found and listed, the homeowners will begin to get a lot of inquiries as this means of marketing can easily reach the intended audience.

The current trend shows that people searching for rental properties through newspapers is reducing and more and more people are depending on the internet. Also, they will not have to pay any addition cost like purchasing newspaper as they already have an internet connection. This is beneficial for property owners as well as they need not have to pay for posting their ads like in the case of newspapers and magazines. Also, home rental classified ads online will also reach international audience apart from local people.

When the home rental classified ads reaches international audience, people looking for rental houses in another country just because of their job transfer can also be benefited.

The Successful Landlord: Analyzing a Rental Application to Choose the Best Renter

While your prospective renter is filling out the application, take a look at their driver's license when they pull it out to write down the number. You want to verify positive identification.

If it's a married couple applying, one application is sufficient. If they are roommates, or relatives, have each person fill out an application so that you can perform independent background checks. Make each person older than 18 sign the lease application.

Review the application while they prospective renter is still there for completeness of information and to identify anything that you might have a question about. The critical information you need is their social security number, birth date, current address with zip code, and permission for a reference and credit check.

You'll need the name and phone number of the current landlord. And it's useful to get the name and phone number of the previous landlord, too. Sometimes a current landlord will give a false-good reference just to get them out of the place! The prior landlord will have no such motivation and will give you an accurate reference.

Make sure that all applicants sign the application. You need this permission to do the background check.

Look for things like more cars than the parking of your home can handle, and so forth.

Do not make any statements that indicate that they can rent the property from you. This is strictly an application. You still have to select the best renter for you.

THE MOST IMPORTANT QUESTION TO ASK

The most important question to ask your prospective renters is, "For what reason are you leaving the home you're in now?"

You'll get lots of answers, some of which are valid, and others will raise a warning flag. I asked one applicant why they were moving. They replied, "We're being evicted."

"Why?"

"Our three-year old kept going to the bathroom out the bedroom window."

INSTANTLY TELL HOW THEY'LL TREAT YOUR PROPERTY

After they've filled out the application, walk them out to the car, and shake their hand as you say good-bye.

Look at their car. You can tell lots about how people will treat your property by how they treat their property.

If their car is well-kept and neat inside, they are very likely to make good renters. If there is trash all over the inside of the car, it's missing hub caps, and so forth, that indicates the condition your house will probably be in when they move out.

Being a Successful Landlord: Three Secrets to Profitably Renting Your House to the Right Tenants

It's not easy being a landlord. You have to get your house ready to rent. You have to advertise to get perspective renters. You have to select the right renters. And then you have to be at their beck and call in the case that they have a problem with the house. And then you have to collect the rent when they're late or evict them when they don't keep their promise to you. What a headache!

Or you can learn the secrets to being successful landlord and put all those headaches behind you. Here are three secrets to successfully renting out your house.

SECRET ONE: SCOPE OUT THE COMPETING PROPERTIES

To find out what you need to do to maximize your success, tour competing properties in your immediate area, acting as if you are prospective renter. You can find out how the other landlords treat their prospects and steal their best methods and make them your own.

Make sure that you pick up copies of their marketing material-that is what they give prospective renters to take away to remind them of what they saw.

Ask for a rental application to see what kind of things they're looking for. Ask if they have a sample lease agreement that you can review. Not every landlord will make this available to you, but it's worth asking for. (Look at my other articles for a free rental lease that you can use as an example.)

If you want to have the complete experience, fill out a rental application and see how you're treated. You can just say that you found some other place or changed your mind if they pick you to rent the house.

If you do this with half a dozen properties, you'll get a great idea of property conditions, rent ranges, and terms and conditions that are common in your area. If you're new landlord, this experience can teach you a lot in very short time.

With this information it will be easy to see if it's worth it for you to rent your home, or if you want to let somebody else manage it, or if you want to put on the market to sell.

SECRET TWO: MAKE YOUR HOUSE VERY DESIRABLE

If your house is just like every other house on the block or like every other apartment in the building, it will be difficult to attract a great renter that will take care of your house and pay the rent on time.

On the other hand, a clearly superior home will attract better renters and allow you to command a higher rent. The kind of people who you want as good tenants will be embarrassed by a dingy and worn-out home. They won't want to bring their friends and family into that environment.

This means you need to invest a little extra in the house to make it look great. With the information you gathered from Secret One, above, you can decide how to put minor upgrades into your home that really stand out from the competition.

I do simple things like upgrade light fixtures, install new flooring and carpeting, replace the kitchen sink, replace the bathroom sink, and replace the drip pans on the stove so it looks fresh and clean.

Consider fresh paint or carefully touch up the walls so everything looks clean and tidy.

I also make sure that the property is absolutely spotless, with clean windows, clean entryway, and professionally cleaned carpets. I also replaced all the light bulbs with maximum wattage bulbs so that the house is as bright as possible. A dark house doesn't show well but a bright house moves fast.

SECRET THREE: SET YOUR RENT AT LEAST 10 PERCENT HIGHER

A slightly higher rent then the competing properties won't scare away the type of renters you're looking for, but will move along the cheap skates that you don't need in your house. And besides, it will be worth it to your renters because your house looks so much better since you've followed Secret Two, above.

To make your higher rent stick, create a marketing page that calls out all the valuable capabilities and features of your home.

Being a Successful Landlord: When You Shouldn't Rent Your Home

In this article, I want you to learn two important things about being a successful landlord: a change in attitude toward you home, and when you SHOULDN'T rent your home.

THE MOST IMPORTANT SECRET TO SUCCESSFULLY RENTING

If you're going to have a worry-free landlord experience, you can't be emotionally attached to your home.

If you're like most homeowners that I know, you're proud of your home. And rightly so. It's the results of your hard work and sweat. You've put your soul into your home.

The sad news is that your renters won't have the same pride or take the same care that you do.
Your home will get scratched and dented. It will deteriorate and you'll see it. When you make an inspection a year later, you'll see the wear and tear that you'd ignore if you were living in the house. Don't let it bother you or you'll go nuts.

Change your viewpoint from that it's your home, to it's their home, and you're collecting money for the privilege of letting them live there and for the wear and tear that's going to happen. Virtually all damage can be repaired, and that's why you collect a damage deposit.

WHEN YOU SHOULDN'T RENT YOUR HOME

There are several situations when I suggest that you not rent your home yourself. Instead consider either selling it or having a property management company deal with renters for you.

* IT'S FARTHER AWAY THAN YOU WANT TO DRIVE

If your rental house is too far away to drive to show it to one person, it's too far away to rent. I think that anything over a half-hour drive is stretching it and asking for headaches. You decide for yourself.

* YOU'RE REAL PICKY ABOUT YOUR PROPERTY

If you are fussy about what people do in your house, you're setting yourself up for an unbelievable nightmare.

So what happens when you find out your renter is rebuilding his motorcycle in the living room? Does this thought drive you nuts? You're better off not being a landlord.

By the way, when you select renters using the methods I'll write about later, this won't happen. And if it does, so what? You'll either clean the carpet or replace it at your renter's expense. No big deal.