congratulations! Your studio is in a very nice and always popular building. Studio's in your building are renting for $2,600 to $3,350/month right now and there is currently nothing available for rent.
What does your lease say? Is this a one year lease that is renewable every year? Do you have anything in the lease regarding rent escalations?
I agree with Margaret: "a bird in the hand"... A good tenant is very valuable and should be treated as such. Finding a new tenant that is willing to pay a higher rent is absolutely possible, but it is likely to take you some time and cost you some money.
Stephanie's suggestion that you can offer your tenant an insider discount, is good advice. You can tell her that you like her and would prefer to keep her as tenant, while also explaining that the same studio(above and below yours) is renting for $3000/month. Tell her that you are willing to make an effort to keep her and to keep her happy, so you will only raise the rent with about $100/year.
If there is no rent escalation clause in her lease, you could try and add one at the new lease renewal.
Using a 3.5% rent escalation you will end up with $2898 for the first years raise and $2999.43 for the second years raise.
If you use a 3% rent escalation it would be $2884 for the first year and $2970.52 for the second year.
Would you need further advice, or help with finding a new tenant, I'd be happy to be of service.
Bond New York
$2950, 1 Month OP (allows brokers with clients who want a discount on fee, you pay 1 month towards commission), with rest of September Rent Free (this will attract renters not using broker). (You will do one or the other depending...)
It will be snapped up in my opinion. You beat out the competition slightly in building and in the surrounding area.
OR offer the current tenant $2850; give him/her insider discount and tell him/her you prefer to keep them on as tenant, but if not, need to put on market at $3,000.
Normal and desirable vacancy rates in large rental buildings are 5-10% per year, and in theory a landlord's rental rate should maintain that kind of vacancy--the higher the rent, the more turnover in tenants you will have.
But for a small scale landlord like me (and perhaps you), who doesn't have enough units to benefit from a formula like that, every time a tenant leaves it's an expense. It's not just the lost rent, advertising (or in my case, property manager advertising expense), it's also the complete repainting, floor maintenance, etc. required.
Some tenants take very good care of your property but many do not. "Normal wear and tear" is not something you can legally take out of the security deposit, but there's quite a range as to what that means. A gentle tenant is worth more than one who is hard on everything.
Also, if your tenant does not let you know about small maintenance issues for fear of bothering you, that is good, but you should inspect the property once a year with the tenant and ask about small repairs and things not quite right. Attending to small things will save you money in the long run.
One last thing to ponder: It's difficult to evict people in New York, which has the effect I think of keeping rents a little lower than they would be otherwise. In other parts of New York State, if somebody doesn't pay rent, you can have them out in a month. In NYC it's very difficult and takes many more months, which has the effect of making good tenants more valuable.
Karla Harby, VP
Charles Rutenberg Realty
The rental market in the Village has tightened up considerably and you could get more money for the place but it could take a while as it is 'later' on in the rental season; most renters for such small spaces are already situated by now (and in school already or wherever) so you could lose a month's rent and that would be a substantial loss if changing tenants. I say 'love the one you're with!"
Maggie Hopp, CEO Hopp Property LLC, REBNY, MANAR, Maggie@HoppProperty.com
212 947 0578
I'm familiar with your building. I have a friend who owns an apt. there and I used to live down the street. You are right that there aren't any apts. for rent there right now which is the best time to get more $. If you want to give me a call tomorrow I will tell you how I think you should handle this.
The Corcoran Group