So the tenants came back and said they could only afford a $25 rent increase. Which upset me cause my DH makes less than them since he's enlisted and they are officers, we have the same amount of kids, and if DH got a $150 BAH raise this year, I know they did too or better.
Considering the rental is already operating at a loss I told the property manager, NO... I need the rental to have a $50 increase AT LEAST because had I known our taxes were going to increase I would have NEVER rented it out at $1525 in the first place.
So the manager sent an email to the tenant letting them know that this wasn't meant to upset them but the expenses on the property had gone up & they can choose to go month-to-month on their current amount till we find someone who will pay the $1575 or agree to the new amount.
I'm not sure what the tenant's response has been.
But this morning the property manager emailed me a list of my "competition" so I wonder if that means the tenants did not/do not agree to the rent increase.
I guess if this is the direction everything takes... maybe its for the best. I can list the home instead for rent... but for sale as well.
I hate to take a "faith based" approach but I really feel like in the end, things will work out for the best. I was angry and resentful at being told they could only afford $25 more when 2 months after I rented to them my expenses increased by $50. I didn't expect that and had I known I would have NEVER EVER agreed to $1525.
I'm going to trust though that whatever happens is for the best. My parents told me I was being too nice to the tenants so I put my foot down and explained that I needed it to turn a profit soon or not have it at all.... so we'll see.
I'm sure in the end, it'll work out. Not much of a financial plan, but I do have faith it will be okay. I'll either get the rent I want or no longer have to worry about it anymore.
Update: Well the tenants said they would be willing to move over a $50 increase. The property manager thinks I stand to lose more money by losing the tenants. DH is pissed, he said the tenants should not be dictating to us what we charge in rent but the property manager said there is a lot more places up for rent now because they weren't selling. So people caught on to what we were doing last year.
I'm not sure. I could call their bluff but on the other hand I don't like turning down guaranteed money. It seems so ridiculous to me, yeah the other places are bigger but our place has wood flooring in the entire house, new windows, SS appliances, its in GREAT condition and fully remodeled. So they could get the 2000 sq ft place for $1595 but its not as nice as our 1500 sq ft place for $1575.
Not sure what we're going to do. The property manager said we are heading into the wrong time of the year. Right now we'd be looking at a Sept 1 move-in date. And if it didn't rent immediately then maybe October or November.
Meanwhile, my DH is stuck on the principle... I have the property manager telling me I will likely lose MORE money on it... and yeah, as usual I'm not sure what to do. But am going to think about it and hopefully the right answer will come to me.
Taking it a step further
June 16th, 2008 at 01:47 pm
June 16th, 2008 at 02:04 pm 1213621486
June 16th, 2008 at 03:03 pm 1213625010
Make no mistake... the tenants will use all opportunities open to them to resist paying more rent ( to be honest, so would I unless the Landlord was a personal friend).
There isn't really much difference between paying 25 more and paying 50 more. The hassle and expense of moving will surely cost them more.
As I said hold out for the 50. Your last proposal to them was the correct one. If I was a betting man, I would bet 20 on you getting it !! :-)
June 16th, 2008 at 04:07 pm 1213628878
I have learned that can never think what other people *should* be able to afford. If they can't afford the increase, I think you are better off having them leave.
I would take it a step father and say to increase the rent $75 so the new people coming in will make your situation more comfortable.
I had a situation last summer where a person was returning to that states after missionary work. No credit history. Did have a contract though for steady employment. Could afford $350 less than I had thought we'd rent it for. He would pay six months cash upfront. What did I/DH do?
We skipped this family simply because I wasn't sure if they would be able to afford it after the six months. I advertised on Craigslist for free, got it rented to woman and her children paying $100 more than I was starting from. While she is sometimes late paying the rent, she always pays it within two weeks of the due date and pays the $100 late fee without a problem.
Had I settled on the first guy/family I would have had $500 per rent less than I am getting now. And I thought if I don't rent to 1, how long will it be efore I get 2.
June 16th, 2008 at 04:28 pm 1213630093
I am a renter and I put little 'extras' into the property, and when something little breaks, I replace it, and I dont go for handyman specials either of using duct tape and wire. This family might cost you more in the long run by letting the property just get a run down type of look because they are unwilling to go the extra mile of having the carpets cleaned, replacing air vents, ext.
June 16th, 2008 at 05:22 pm 1213633374
Where I live it's hot so it's easy to get tenants. However, in other areas I've heard it can be hard to get renters.
June 16th, 2008 at 05:28 pm 1213633725
So its tough but I do think I'm pricing it right.
June 16th, 2008 at 11:52 pm 1213656746
June 17th, 2008 at 12:10 am 1213657813
I'm kinda regretting the whole pushing for the $50 increase. But also thinking that perhaps this is an opportunity to sell it if it won't be locked into a lease. That'll take care of the HELOC off our plates, I won't be paying taxes on it, a property manager, sooo I'm reserved to the idea now that whatever is meant to happen will. And I've been trying to get serious about my finances but afraid to sell, maybe this opens the door to doing just that.
June 17th, 2008 at 04:08 am 1213672135
Best of luck in making a decision on the rental property. Personally, I might take the $25 increase to guarantee that I still have income coming in and make the lease month to month. If it is not possible to rent your place at a rate that covers your expenses, then it is time to sell.