2010/06/29 11:36:24 PM
Shar
Posts: 13
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I am interested in hearing what you consider a reasonable rental increase in todays economy. I know most landlords seem to feel that 10% is the accepted standard but of course most tenants don't get that sort of increase to their salaries.
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2010/06/30 09:53:29 PM
Orionmj
Posts: 4
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One would rather keep a good tenant and increase the rent just enough to cover all the increases and % extra than run the risk of taking a difficult new tenant as well as advertising costs. If everyone increased by 10% then tenants wouldnt expect anything less. But that doesnt happen.
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2010/07/01 08:12:26 AM
mjwthorne
Posts: 14
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Landlords.
I agree with Orionmj in that it is better to try your best to keep a good paying tenant who is looking after the place, than to put the rent up and end up with a bad paying tenant.
Also you might consider only writing your Agreement to Lease for six months, this way you find out if you have a good tenant or not, and do not have to sit for a year with a bad tenant.
What we do at Landlords in Cape Town, is that we write a 6 months Agreement to Lease with a 5% increase at the end of the 6 months, if the tenant has been good we do and addendum to the Agreement to Lease for a further 6 months.
After the two 6 months periods have expired we will write a new Agreement to Lease with a 5% increase and in the Agreement to Lease we have a 10% increase.
What we have found is that tenants are able to budge better with a 5% increase than a large 10% increase at the end of a 12 months period.
Also we have a renewal fee for each of the 6 months periods.
Bottom line, got a bad tenant then make him pay, got a good tenant look after him.
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2010/07/01 08:55:41 AM
Shar
Posts: 13
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Thank you both for your input. Landlords: I am not sure I understand what you mean "After the two 6 months periods have expired we will write a new Agreement to Lease with a 5% increase and in the Agreement to Lease we have a 10% increase." Please could you explain? Do you increase the lease by 5% at 6 monthly intervals?
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2010/07/15 04:55:44 PM
mjwthorne
Posts: 14
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Shar wrote:
Thank you both for your input. Landlords: I am not sure I understand what you mean "After the two 6 months periods have expired we will write a new Agreement to Lease with a 5% increase and in the Agreement to Lease we have a 10% increase." Please could you explain? Do you increase the lease by 5% at 6 monthly intervals?
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2010/07/15 05:01:34 PM
mjwthorne
Posts: 14
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I will try to explain.
I only write Agreement to Lease for 6 months this is to make sure that I have a good tenant, at the end of the 6 months I have 5% increase in rent. I do the increase with an addendum to the Agreement to Lease.
After the next 6 months have expired I have another 5% increase, I then do a new Agreement to Lease as some of my conditions may have changed and I want the tenant on the latest Agreement to Lease. In this Agreement to Lease I will have that there will be a 10% increase at the end of this Agreement to Lease period.
I tell the tenant up front how it works, after 6 months if you are a good tenant I will do an addendum to the Agreement to Lease, with a 5% increase, then after next 6 months there will be a further 5% increase and after the next 12 months there will be a 10% but you have to be a good tenant if you wish to avail yourself of renting from me.
I trust that I have cleared this up for you, or you can contact me direct I don’t mind.
Mike JW Thorne, CEA, MIEA, CRS (USA) of Landlords.
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2010/07/21 12:23:16 AM
Marc Lunau
Posts: 169
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So you charge the 5/10% regardless of market rentals and/or economic climate?
If initial rental was low (e.g. bottom end of market value) for some reason (e.g. oversupply of a new development going online) then increase should be maybe more than 5% and vice versa.
How much renewal fee do you ask the tenant every 6 months?
--
Investor and Property Manager with value add solutions
www.houses4rent.co.za
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