Author Topic: Raise rent with extra roommate?  (Read 1676 times)

pdxvandal

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Raise rent with extra roommate?
« on: March 24, 2017, 09:56:19 AM »
Hello fellow Mustachians.

In August, I turned my primary home into a rental property and rented to two women in their 40s with jobs and no kids. Score!

Anyway, they'd like one of their friends to move in.

They have a month-to-month lease after May. Do I raise the rent $50-100? Do I wait until they've been in the property a full year this September? Do I not do anything? The rental market is tight and competitive, so I think it wouldn't be an issue to raise it once they add the extra person and they're already "saving" on the rent by adding an extra person.

I'm clearing about 1k per month on the property after taxes/insurance/mortgage, but I have told them I will likely try to sell in April/May 2018.

What do y'all think?

Vindicated

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Re: Raise rent with extra roommate?
« Reply #1 on: March 24, 2017, 12:16:35 PM »
I don't have land-lording experience to offer, but I'm legitimately curious about what others will say.

As a previous renter, I would feel slighted if my landlord upped rent just because another person moved in.  I'm assuming you listed the rental at a certain price, without stipulations on number of occupants.  Would you have rented to the three of them initially for the same price you started with?

I don't think it would be an issue to make a "market adjustment" at the 12 month mark.  That's probably the route I'd advise.

ducky19

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Re: Raise rent with extra roommate?
« Reply #2 on: March 24, 2017, 02:47:48 PM »
You absolutely should raise the rent - the agreement you made with them was just that: with them. Additional people in the house equates to additional wear and tear and should be accounted for. I see nothing wrong with raising the rent a couple hundred dollars a month. They are still paying less per person and you are recovering some of the additional burden. Win-win.

electriceagle

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Re: Raise rent with extra roommate?
« Reply #3 on: March 25, 2017, 12:48:13 AM »
Depends a lot on the norms in your market.

Do you pay utilities? If so, the extra person is a good reason to increase the rent. If not....

Lmoot

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Re: Raise rent with extra roommate?
« Reply #4 on: March 25, 2017, 05:35:03 AM »
 Yes. Extra water, if you pay for it. Extra wear and tear. Extra liability risk. I would also do a background check on the extra person and rewrite the lease. No need to wait the whole year if they want to break the original agreement. Break it and rebuild a new agreement.

NoNonsenseLandlord

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Re: Raise rent with extra roommate?
« Reply #5 on: March 27, 2017, 07:07:51 AM »
They are changing the lease by adding a roommate.  You are free to raise rent by $50.  Or kick them out.

BAMxi

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Re: Raise rent with extra roommate?
« Reply #6 on: April 10, 2017, 08:45:19 PM »
Charge them for that roommate (also get them added onto the lease). I charge a $200 shared bedroom charge each month for additional roommates (college town where rent is very competitive). This is normal for student oriented housing where we charge by the bedroom. I would definitely go for some type of rental increase and state that the person must be on the lease in order to occupy the dwelling. Your house your rules! I'd also suggest adding some type of language in your lease about adding additional tenants or roommates and that adjustments to the rent may be made if they do that. If everything went south and you got taken to court without it in your lease, a judge probably won't find in your favor. It might be best to raise it at the end of the lease term and not directly correlate it to the new roommate or give any reason for a rate adjustment other than "market rates rising." Again most of this depends on the lease they have signed. If it explicitly states two parties' names on the lease only, then absolutely they are adding someone else, so really a new lease entirely could be in order and it's at your discretion to offer them one. as NoNonenseLandlord says, if they choose not to comply, kindly ask them to leave!