Rental Leasing Increase

irvinebullhousing

Well-known member
My rentals for the past several years, each year when tenants renew a lease term I've always increase the rent rate by 3 to 4 percents. This year with the strong job market and tight inventory I am contemplating raising the rate about 10 percents. What would you do if you are a leasing your rental(s)? There are a lot of great applicants out there with good paying jobs that wanted to rents in Irvine.
 
Depends what type of property you have and what it's rented for now. If it's a 1 or 2 bedroom condo, there's plenty of inventory throughout Irvine. If it's a newer, 3+ bd SFR or detached, and in the mid-$3k range...there's less competition and more demand. Is current rent at or below market rate? Also, in case you didn't know, California law requires 60 day written notice for an increase over 10%. 10% or less is 30 days.

All that said, general words I like to live by: Don't get greedy.
 
I've only rented in a few places in my life.  One place evicted me due to the owner selling the place, but I likely would have left had the rent gone up.  The other 2 places got a 30 day notice from me as soon as they gave me a notice of a rent increase.  I actually liked the owners of the last place I rented, but the rent going up was a strong impetus for us to put an offer in on our first home. 

If the rent is still fair after the increase, it may not matter.  If you end up above market, then be prepared to have a little vacancy time.
 
Depends on what message you want to send to the tenant.

It also depends on how you've written your contract.

Keep in mind, the more you act like a big complex LL, the more likely the tenant will behave like a renter.  Right down to making you replace burned out light bulbs if you haven't spelled it out in the contract.
 
Be prepared to estimate costs of refurbishing between tenants. Those costs alone and missed rent during a vacancy may make you reconsider anything too drastic as well.
 
And that's exactly why I signed a two year lease. Rents around me have already gone up 4-5% since December, or even more for upgraded rentals.
 
Are the zillow rent prices very good?  My renter is leaving at the end of the month, and it seems like from Zillow, I can increase my rents about 20%.  I wonder how accurate it is.
 
zubs said:
Are the zillow rent prices very good?  My renter is leaving at the end of the month, and it seems like from Zillow, I can increase my rents about 20%.  I wonder how accurate it is.

That mean that you were very generous with the previous tenant. I would take the current comps from your immediate area and shave off a hundred or two to attract applicants. Once you have a handful you choose the best from the pool and renters knows the current rate and thank you for the discount.

Do take into consideration of your listing. If your house decked out and super nice, you will get renter very quickly. If it needed repair now is the time to spruce it up.
 
Or you can nicely ask one of the many agents on here to see if there are some recent comps in the area...
 
My current renter was caught up in the Lee Baca hide the prisoner from the FBI scandal...I think he spent time in federal prison.  He had to take a huge pay cut because he can't work as an LEO anymore.  Since the rental is mostly paid off.  I decided to keep his rents low.  Anyway he's leaving and I'm gonna raise my rental rates.

 
we are looking at 4bd rental somewhere in the 3500-3700 range in the next month or two. we may stay in our current rental or move depending on what we see. there is not a whole lot to choose from and i'm comfortable paying this price BUT a 10% increase puts our current rent 350-370 per month. not sure i would go for that. this is why we are looking to buy. if i can find a 4bd with 2,100+ sq with at least 5,000 sq lot for 800 - 900 range i would probably jump on that instead of paying the rents.
 
shahshah said:
we are looking at 4bd rental somewhere in the 3500-3700 range in the next month or two. we may stay in our current rental or move depending on what we see. there is not a whole lot to choose from and i'm comfortable paying this price BUT a 10% increase puts our current rent 350-370 per month. not sure i would go for that. this is why we are looking to buy. if i can find a 4bd with 2,100+ sq with at least 5,000 sq lot for 800 - 900 range i would probably jump on that instead of paying the rents.

Like I mentioned in my earlier post, a great renter is worth the weight of gold. A good renter will determine wether an increase if any at all. It worth while to not increase anything if you have a responsible person at your property.
 
shahshah said:
we are looking at 4bd rental somewhere in the 3500-3700 range in the next month or two. we may stay in our current rental or move depending on what we see. there is not a whole lot to choose from and i'm comfortable paying this price BUT a 10% increase puts our current rent 350-370 per month. not sure i would go for that. this is why we are looking to buy. if i can find a 4bd with 2,100+ sq with at least 5,000 sq lot for 800 - 900 range i would probably jump on that instead of paying the rents.

If you don't need Irvine schools and okay with Baker Ranch, might have something available soon  8) #shameless but yeah i've seen rent increases from friends who are both renters and landlords in south oc.  It's crazy
 
Compressed-Village said:
shahshah said:
we are looking at 4bd rental somewhere in the 3500-3700 range in the next month or two. we may stay in our current rental or move depending on what we see. there is not a whole lot to choose from and i'm comfortable paying this price BUT a 10% increase puts our current rent 350-370 per month. not sure i would go for that. this is why we are looking to buy. if i can find a 4bd with 2,100+ sq with at least 5,000 sq lot for 800 - 900 range i would probably jump on that instead of paying the rents.

Like I mentioned in my earlier post, a great renter is worth the weight of gold. A good renter will determine wether an increase if any at all. It worth while to not increase anything if you have a responsible person at your property.

Bingo, the easier my tenant makes it on me the easier I make it on them (i.e. no rental increases) and wait until they vacate to bump the rent closer to market.
 
zubs said:
Are the zillow rent prices very good?  My renter is leaving at the end of the month, and it seems like from Zillow, I can increase my rents about 20%.  I wonder how accurate it is.

They are a hit or miss...best comps are from MLS both from what closed and what the competition is asking for.  If you give me your email address and the address of your rental, I'll send your MLS closed comps as well as the active listings.
 
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