Purchased a park in March, the lot rent was under market. At $100 per month, after the first month I raised the rent to $125 .
Since May I have received $125 , when should I move up to $150? My goal is to be $175 by the start of year 2 which is January 2023.
Assuming your tenants are on year long leases, you can only raise rents once per year. If they are on monthly leases, you can raise rents with the appropriate notice.
I’m going to assume your tenants, for this comment, are on year long leases. So in March of 2022, you can give notice to your tenants that rent is increasing $50. You’ll than be at your target rents by April of 2022, ahead of schedule. Or, you can do $25 in March 2022 and another $25 by March of 2023. You’ll be behind your goal by 4 months, but you’ll be there nonetheless.
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I’m not sure I could ever find a reason to raise rents more than once a year, but that’s just me. I like to keep them consistent every year so things are predictable for my residents.
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We just raised the rent from $290./month to $345./month (which has always included well water and trash 3x/wk). Each person’s rent would start Sept 1st if they were month-month. The others would start the following month after their lease ended. When doing a walk-through with the landlord someone asked him why they raised the rent and for so much. He asked, “when was the last time you rent was raised?” She said, “never”. He said, “There’s your answer”.
Changing 2x per year is not a good idea. If you want to make annual changes in January, I would move it to $150 in January 2022, but make it very clear that you will not be doing another mid-year increase. Then, I would make the change to $175 in January 2023, however, by that time, perhaps market rent is higher than $175 and should go to that level.
However, $175 seems very low and I question in hindsight why you were not able to go from $100 to $175 all at once, which is what I would have done. My approach would have been to not increase rent in May, but to announce in September that rent would go to $175 on November 1.
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I would raise rent to $175 in March 22 . Raise to full market March 23 or wait till Jan. 24 to raise to full market. You then raise rent every year on the same date going forward. Always maintain full market rent.
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Now is the time to transition to water sub-metering;
When residents have a choice between ever increasing rents or being in control of their own water/sewer consumption ($), it’s a no brainer.
“Were here to answer your sub-metering questions”
They are already on water meters
Water Sub-meter, raising rents.
If you’re already sub-metered: Review the utility billing methodology, you should be billing 95% or better to the tenants, depending on your common area amenities.
What state are you in?
Typically, raising rents once a year is the normal (or the only legal option). You can certainly raise rents as the current rent is low, just be sure you have appropriate reason to do so (market rents, expenses, capex expenses etc.).
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