Don't Bother Raising Rent

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Landlords and Asset Managers care about rents - and raising rents.

So, let’s talk about whether or not to raise rents.

I don’t think you can, because then you’ll drive your tenants out.

I think you can because you have to keep up with inflation - increasing prices of doing business - and repairs - so that your tenants stay there and happy! And keep paying you monthly or recurringly.

It depends if you are a large commercial REIT or a smaller residential landlord.

One of the key factors in raising rents in a commercial complex - I think - is that you can keep your anchor tenant to keep drawing visitors and other tenants to the buildings.

For smaller residential investors and REITs it’s important to keep the property up to standards - and at market levels - so that you can keep tenants.

Don’t bother raising rents because you are afraid of losing rents to tenant turnover.

Don’t worry about that. Just keep tenants happy with a good property and raise rents regularly to support market conditions and not scare tenants away with a huge price increase.

Happy Tenants

There are details that you have to keep in mind when raising rents. Whether it is legal under your tenancy contract. Or if the property is rent controlled.

Something that you can do to keep tenants happier is have a clause stating that you can raise rents at smaller amounts more regularly - maybe a certain percentage annually or so - or try to raise rents at the end of the rental agreement when they are deciding when they will renew with your contract in the same place - with you!

So many investors don’t care about supplying tenants with solutions to their problems - like fixing things and making repairs. One solution is a price correction - dropping the rent to accommodate for repairs that need to be made. I don’t think that that is a great idea.

You have a brand to keep up - or a reputation. And you don’t want people saying that you aren’t taking good care of your tenants. Also, the building is your appreciating asset and it’s worth the money to repair and maintain it - ideally, or you probably should not have bought it!