Orange County

AOA News and Buyers Guide • Orange County • January 2021 • (714) 539-6000 52 I s it a good idea to raise the rent every year, especially if you have a great tenant? So many landlords don’t raise the rent annually for a variety of rea- sons, so let’s explore the benefits and potential drawbacks. Don’t Want to Lose Your Tenant? One of the most common rea- sons a landlord doesn’t raise the rent is because they fear that if they increase the rent, they will lose their tenant. Understandably, when a tenant leaves there is a cost associated with returning the unit to move-in ready condition, temporary vacancy and taking the time and effort to find a quali - fied tenant. Why would I risk a month or two of income (8-17% of my annual gross) for a 3 – 6% increase? It’s certainly not worth raising the rent if it costs more in time, money and effort than if the rent had stayed the same. What about for the tenant? If a landlord raises the rent, what factors do they need to consider? Instead of status quo, they may reevaluate their situation. Are they happy with the home and is it continuing to meet their needs? Is the landlord providing good service and maintaining the prop- erty? Is there something on the market that is better and/or more affordable? If so, is it worth their time, money, effort and hassle of moving? When your tenant chose to sign a lease, presumably they chose the home because it met their needs and it was listed for a fair price. If their needs have changed (new job, growing fam- ily, etc.) the tenant is likely to move anyway. On the other hand, if the housing market con- tinues to move up, wouldn’t your property still meet their needs for a fair price? For a $2,000 rental, 3-6% equates to a $60-$120 increase EMAIL OR CALL FOR YOUR FREE ESTIMATE F ULLY B ONDED AND I NSURED // WWW .ALLPROOFDECKS. COM // CA L IC . 982450 ALLPROOFDECKS @ GMAIL . COM 1.714.253.3330 Y EARS OF E XPERIENCE IN W ATER P ROOFING & R ESURFACING 3 + 0 DECKS • WALKWAYS • BALCONIES • STAIRCASES PARKING LOTS • PLANTER BOXES 5 YEAR WARRANTY ON OUR FULL WATERPROOFING SYSTEM ! Raise the Rent? by Mercedes Shaffer If you let five years go by without raising the rent, at the end of five years you will have lost out on $5,169 in revenue, money that could have been used to re-invest in improving the property. (continued on page 54)