Author Topic: Rental property: move out inspection questions, raising/not raising rent, etc.  (Read 3842 times)

Bearded Man

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-Should I have the tenant present when doing the move out inspection?

-On another rental, I've elected not to raise the rent even though I charge $250 less than comparable houses in the area (including the one next door to the rental). This is largely a business decision as I don't hear from this tenant and I have two other vacancies, full time grad school, full time stressful job, major health issues, etc. I have enough on my plate this year that I don't need yet another vacancy. So I'm going to offer them the same rate. But I do want to raise it NEXT year. So do I mention in my email that although my expenses have gone up and market rent is X dollars above what I'm charging now, I've elected not to raise the rent this year? Or do I just say I've elected to offer the same rate again this year and leave it at that?

In the past I've just left it at that, but my expenses stayed roughly the same and the rent comps were pretty much the same at the time, not enough to justify raising the rate, so all I ever said was I'm leaving the rent the same.

Brilliantine

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Moving into a new place costs time and money. People expect rent to go up. I'd say raise the rent. Maybe not the full $250 that you think is the gap between current rent and the market, but $100. If my rent went up by $1200/year, I'd weight it against the costs of moving: boxing, loading, shipping, unloading, unboxing, etc. and I would stay put. Raise the rent. And I don't think you need to explain your motivation to your tenant. Just draw up the renewal with the new rent amount in place, send it with a note that says you appreciate their business. Short and sweet. :)

Mother Fussbudget

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Moving into a new place costs time and money. People expect rent to go up. I'd say raise the rent. Maybe not the full $250 that you think is the gap between current rent and the market, but $100. If my rent went up by $1200/year, I'd weight it against the costs of moving: boxing, loading, shipping, unloading, unboxing, etc. and I would stay put. Raise the rent. And I don't think you need to explain your motivation to your tenant. Just draw up the renewal with the new rent amount in place, send it with a note that says you appreciate their business. Short and sweet. :)
+1.  I would raise the rent $90 each year.  Then do it again next year, and the year after that - spread out the $250 increase over the next 3 years, and at the end of that time, decide if you need to continue raising by $90.  I've found it's easier for renters to accept a $90 or $95 dollar increase than a full $100.

Bearded Man

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What about the move out inspection? Should I have tenant present for that?

I don't think I'll be raising rent on this one that is already occupied this year as I have grad school, work, other properties in need of work, etc. Don't have bandwidth to deal with another house for an extra $50 a month.
« Last Edit: August 19, 2015, 01:47:48 PM by Bearded Man »

Seeking the Brass Ring

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I don't think you need to have the tenant present for the move out inspection.  Make sure to document any damage with pictures and video (with a narrative of the damage) before any repairs or cleaning take place.  I'd also talk to an attorney before with holding security deposit money.  Some states, like mine, it's better to return the deposit and then sue for damage in court.   

calivianya

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I am looking at getting into the rental market and I'm always surprised by how much people advise to raise the rent by on this forum.

You all must live in hot markets or something. I had a landlord try to raise my rent by $15/month once and I found that pretty offensive, stated so, and didn't pay an increase at all. I have never paid a rent increase in a rental property. The longest I have ever stayed in one rental is three years.

Where do you all live that raising rent by $100 is acceptable? That seems like a huge chunk of change.

cchrissyy

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I've rented many houses and apartments and never once done a move-out inspection with the landlord.
I pack up, clean, leave, and before long I have my returned deposit in the mail, or a written explanation of what was found wrong and how much $ was deducted for it.
Actually coming back to do a walk-through together is inconvenient for everyone.
Oh, and I do take photos of the empty rooms before and after my tenancy. In case there ever was any dispute about what condition I got it in, or how I left it. This has never been needed, but it is quick and easy protection.

adamcollin

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An increase of 4-5 percent once per year should be absolutely fine. Just make sure you give them the minimum required notice before the raise.

NoNonsenseLandlord

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Raising rent to market is OK, but you also run the risk of losing a tenant.  I keep my rents at market when I rent, but typically let the raises lapse a bit.  I would rather have the golden handcuffs on the tenant.

I do a move-out inspection, if the tenant requests it.  If you do not find anything in the move out inspection, you can still charge for the item.  You are only looking for high-level items.  Later, when you are turning the apartment, you will find the items the tenant 'hid', or put together with cheap glue or tape.  You need to charge for those items.

clarkfan1979

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It sucks when tenants try to hide stuff. If they told me in the beginning, I would have time to fix it myself. However, I find it during the inspection and have to pay someone to fix it because the new tenants are moving in a couple days.

ehbkf

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Moving into a new place costs time and money. People expect rent to go up. I'd say raise the rent. Maybe not the full $250 that you think is the gap between current rent and the market, but $100. If my rent went up by $1200/year, I'd weight it against the costs of moving: boxing, loading, shipping, unloading, unboxing, etc. and I would stay put. Raise the rent. And I don't think you need to explain your motivation to your tenant. Just draw up the renewal with the new rent amount in place, send it with a note that says you appreciate their business. Short and sweet. :)

Except for a few select markets (NYC, Boston, SF...although multiyear leases with no rent increase is becoming more common) people do not expect the rent to go up and actually are quite annoyed by it, in my experience. When you have a good tenant, you do everything to keep them. Is it worth losing a responsible tenant over a potential increase in income with an unknown tenant? Not to me.

iamlindoro

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Except for a few select markets (NYC, Boston, SF...although multiyear leases with no rent increase is becoming more common) people do not expect the rent to go up and actually are quite annoyed by it, in my experience. When you have a good tenant, you do everything to keep them. Is it worth losing a responsible tenant over a potential increase in income with an unknown tenant? Not to me.

I think there's something to be said for raising the rent every year like clockwork, but only by a slight amount.  In my midwestern and southern properties, that the rent will rise at 2% a year, because those markets have had a long-term trend of rising at approximately that rate.  On all my units, this amounts to ~12-15 a month each year.  The alternative is to end up in this position where you have to have a vacancy in order to get up to market rates, after having already collected under market rents for who-knows-how-long.