Rentals in Philadelphia>Question Details

 Mike, Real Estate Pro in Philadelphia, PA

How much to increase Rent?

Asked by Mike, Philadelphia, PA Mon Mar 31, 2014

I have a nice NOLIBS duplex with good tenants but have not increased rent for a few years. I would like to increas the rent but am at a loss as to how much. I'm thinking 3-5%. Is this reasonable or too high? Are there any stats on avg. rent increases in NOLIBS or in Phillhy that I can reference?

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I have a house that has 2 apartments we live in one and rent the other. the heat water and sewer is included. the tenant is 95 years old and always has her heat on 80 or higher the heat has been costing us 1000.00 a month or more. She only pays 650.00 a month is there a limit on how much I can raise her rent
0 votes Thank Flag Link Wed Jun 4, 2014
You should probably ask this as a new question so that people will see it as I only happened to come across it by accident.

Have you tried talking to the tenant?
Flag Wed Jun 4, 2014
Mike,
You have not indcated a valid reason for raising the rent.
Of courrse your costs may have increased and profit has fallen below acceptable levels, but you do not mentions that.
Of course your profit model may be based on churing tenants allowing you to adapt to market changes more rapidly. But you do not mention that.

Of course you may have a profit mechanism built into the transitioning tenant model, but you do not mention that.

It appears the ONLY reason is greed.
When a good tenant is replaced by a bad tenant, greed exacts a high price.

Here in the Tampa area the annual increase is 3% regardless of economic factors. A free month of rent will be offered before the rate will be decreased to match market.

3% is less than the cost of moving, but enough to get attention. Then the property management company keeps sending the 'Cheaper to buy than rent' mail. There appears to be an end game.
0 votes Thank Flag Link Tue Apr 1, 2014
If you have a GOOD tenant in place, often it's best to not "rock the boat" too much!

Bill
0 votes Thank Flag Link Tue Apr 1, 2014
Thanks all

The motivation is not greed. Philly has reassessed property values and taxes have gone up considerably. Also, they have instituted a RE income tax. As a result, my costs have gone up considerably although I still have good cash flow. I decided to raise the rent by 3% and tell the tenants why I made this decision. It would have been nice also to give than some stats on average rent increses for th earea which is what I'm looking for leads on.
Flag Tue Apr 1, 2014
A good landlord checks for current market rates and makes rental increases accordingly. Remember it is a business and you need to be competitive. However, it is a business so you want to make money. I would make sure that you do an annual survey and pretend to be a renter. You quickly find out where you stand. If pretending to be a renter is hard, then go ahead and just ask the landlord what they have and what they charge since you are trying to determine what rates you should charge.
0 votes Thank Flag Link Tue Apr 1, 2014
Mike,

Although rental prices do rise every year, your question may be more difficult to answer than just finding a percentage. Some landlords raise by a fixed price yearly, some by a percentage, others, as long as the tenant is respectful to the property and pay on time, end up in the same situation as you. A couple factors to keep in mind while you are making your decision is average rental rates for the area and increase in cost of living expenses in Philadelphia.

If you need further assistance with pricing, I would be happy to help. Please feel free to reach out to me, and I can send you additional information about pricing.

Best,
Hilary

Hilary Lefkowitz Karaman
REALTOR
Investment Specialist
Director's Club
Find out more about me!

Weichert, Realtors
93 Old York Road, Ste 6
Jenkintown, Pa 19046
215-885-8100 (office)
215-919-7497 (mobile)
215-885-3834 (fax)
hilaryle@gmail.com
RE License: RS318196
0 votes Thank Flag Link Mon Mar 31, 2014
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