Rental Home Ownership Myth #1 – Never Increasing Rent to Keep a Tenant? Is There a Better Option?
If you own a rental property in Metro Atlanta or another area, one of the biggest mistakes you can make as a landlord, is to suppress rent prices down for years and years to keep a tenant in your property. This is a common mistake made by many landlords. The reasons they give are usually based around not wanting to “deal with the property or tenant over rent increases,” or it’s “cheaper to keep rent low versus loosing a tenant.”
It is true that losing a tenant can be costly. But it is also important that you do not manage your property based on fear. Landlords that never increase rent operate based on fear. At YesiRent Property Management, we recommend different tactics to keep tenants long term. The most important factor in retaining long-term residents is condition of the home. Make sure your home is maintained at least at the level you maintain the home you live in. Leaky faucets, torn carpet, old squeaky fans, broken fences, stove not working properly, etc. all contribute to residents looking elsewhere to rent. Also keep in mind that most properties for rent have been cleaned up and painted and look nicer than yours. Tenants are willing to pay more for nicer properties.
A creative strategy we recommend to keep tenants happy while increasing rent is as follows: Consider offering improvements and upgrades each year to the property and give the tenant options they can select from. They will get a win and so will you as the landlord. For example, offer to add a new fan in the living room or master bedroom. Or maybe replace countertops this year. Or remove overgrown shrubs blocking a view. Or buy a new refrigerator. Look for things that will improve your tenant’s life! Spend the rent increases back on the property, and a “win, win” will be created. Over time, the extra rent will cover any upgrades, and your tenant will be much happier with the property! And don’t forget, you will be able to keep your property current with the times if you invest a little each year. So when you are ready to sell, you will not have to replace everything.