Profile picture for WrobAl

What is the standard rental increase for a 1 year lease ?

  • April 29 2010 - Flushing
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Answers (24)

I think that if you have a good tenant is hard to find and I would not raise the rent after only one year.
Have you considered if the tenant moves out you will have costs to have the property ready for a new tenant.
I wish you the best!
  • December 02 2014
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Profile picture for sunnyview
"I value occupancy stability more than getting the highest rental price."

Occupancy stability and a tenant who keeps the unit in good condition is important. Over time unless rents rise dramatically, that type of a tenancy slowly, but surely makes you money.
  • December 02 2014
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Profile picture for tolmnapfler
here is my plan:

I value occupancy stability more than getting the highest rental price. A single month of vacancy is expensive.

I want my unit to be rented at or slightly below current market rate, and never above market rate.

But, I won't raise it a huge amount in a single year for fear of an unhappy tenant and possible vacancy, it is just not worth it.

If your rent has fallen very far behind market price, then you can calculate the difference between risking lost funds from a possible vacancy (then charging the new market rate) versus keeping your tenant at whatever the new price you propose to them.

 
  • December 01 2014
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WrobAI In New York City there is no "standard" nor is there anywhere in the US as far as I know, unless it is  a rent regulated apartment. In this financial climate with many rentals available in NYC if your tenant is a good tenant who pays on time perhaps consider waiving an increase
  • October 25 2011
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Ken, its a whole can of worms, not a whole ball of worms.
  • October 24 2011
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That's funny Bruce! And here I am reading them - I must really be busy. Be careful with that one, Sharon. If a landlord owns multiple properties and increases 0% on one because he likes the tenants but goes up 15% on another because he does not like the tenants that opens a whole ball of worms about everything including a possible housing discrimination charge.
  • October 24 2011
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Profile picture for Bruce Cadden
An anwer to a post from April 2010? Things must be slow.
  • October 21 2011
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Profile picture for Sharon Lewis
Depends, how are you tenants, do you want to keep them? Do you think in this economy they could afford to pay more? If you have good tenants who like where they are, I might consider what the ramifications would be if you raised the rent and they left and you were unable to rent it for a month or two.
Are there rent stabilization laws in effect where you are?
  • October 20 2011
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Profile picture for tgrab
Go by the market.  Invest the income to hedge against inflation - not the rental rate.  Otherwise, your competition will get the good tenants and you will deal with more vacancies and lease-up expenses.
  • October 19 2011
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Profile picture for ryanbos
It really depends on what the rental market is doing at a particular time. I advise my clients that in a strong market 5% is fair. However if the tenant is good it may not be worth losing them for 5% so tread lightly.
  • July 19 2011
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There is no standard increase unless you are rent stabilized. Everything is negotiable.For stabilized units the NYC Rent Guidelines Board has voted; one-year leases will jump 3.75 percent and two-year leases will increase 7.2 percent, under the new terms set by the board. The increases this year were slightly higher than last year's increases. Last year, one-year leases rose 2.25 percent and two-year leases 4.5 percent.
The increases were not as high as they could have been. The board considered increases between 3 percent and 5.75 percent for one-year leases and increases of 6 to 9 percent for two-year renewals.
  • July 17 2011
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Profile picture for sunnyview
There is no standard increase. Each contract and landlord is different.
  • July 14 2011
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You can go by the cpi
  • July 14 2011
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I think the answer depends on what the general state of the economy is in. If we are running on all cylinders then a 5 % increase should be very acceptable. However, if there is much un-employment specially in the geographical area that your trying to rent then I would not recommend raising the rent and I am even consider lowering it 5 % to off set all the other increases that your tennant is surly facing. Of course I would not recommend losing money but sometimes people remember thsee small things you do and it can go a long way....

  • December 07 2010
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If you have a good tenant, then you might want to consider leaving the rent where it is to provide them an incentive to stay. When the day comes that the tenant does leave, then adjust the rent accordingly for the next renter.
  • December 07 2010
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Profile picture for Tyler Rygmyr
I would not worry about raising the rents right now.  Once you have a good paying tenant inside try not to disrupt them or give them any reasons to move or go find a better deal.  
  • November 07 2010
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Profile picture for south ozone
can i increase my rent in a privite 2 family home more than 10%
  • November 06 2010
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Rents can increase or decrease depending on the situation and at the end of a lease term.  However, I seem to recall a 10% rule.  If you increase the rent by less than 10% then you only have to give a 30-day notice to increase but if you are increasing it by more than 10% then you have to give a 60-day notice. 

  • October 06 2010
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Many rents in the past two years actually decreased because landlords do not want to make concessions to get new tenants.  There is no standard ifyou are in a market rate apartment. If there is a high vacancy rate in the area it might decrease.  If the market is strong, it could increase to whatever the market will allow.
  • September 22 2010
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Zach, that's some great advice!  I am planning on sending letters 60 days out to all my tenants as well, but didn't realize that it's a natural opportunity to increase rents if it's time.

I've read some great advice on using the Consumer Pricing Index (CPI).  CPI is the increased cost of goods and services, sort of like inflation.  Let's say you've been renting a house the last year for $1,000 and the CPI is 2.5%.  You would multiply rent x CPI = $25.  So the new rent would be $1,025.

This not only makes it easy for the Landlord, it also makes it fair for the tenants.  When a tenant complains, you simply pull out your policy letter that shows how rent increases are calculated (and when) and that will take the wind from their sails.

The harder part is determining WHEN to raise rent.  Just because the CPI is up doesn't mean you can afford to raise rent.  We're the #1 property management company in my area, by far, and we have zero vacancies.  That tells me we're probably charging too little and can afford to raise rents on many of the units.  However, if you have vacancy rates above 5%, you probably shouldn't be raising rent any time soon.
  • August 20 2010
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Profile picture for rentlawcom
Depends. I'm a landlord and:

1. Section 8 or other govt subsidized tenants you will be told as to the percentage of rent increase you may ASK for. Doesn't mean you wil be granted. The Tenant may also have the right to agree to the increase.

Then, if the govt doesn't pick up any part of the increase, the tenant will have to increase their "fair share" of the rent.

2. Depends on the number of:
a) vacant units you have - do you want to risk another? Can you afford another?
b) vacant units in your immediate area - maybe your tenant can move across the street and save $25 or $100 or PAY THE SAME and get more...


3)Depends on what your operating expenses were - try to pass it along. Even if you tell your tenant - they might really care what your mortgage, taxes or expected profit are.

4. Rent Control limits in your city. - If they exist.

More information on [link removed by moderator]
  • August 02 2010
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In NYC, there is no standard increase unless you are rent stablized. Then increases for 1 or 2 years are set by the guidlines board each June. In all other cases, market value prevails and landlords charge whatever the market will bear.
  • June 06 2010
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There really are no set standards on rent increases, and a lot will depend as to what is and no included in the rent--such as heating, utilities, etc.
  • May 03 2010
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I'm not sure there is a standard increase.  I think it is best to analyze the rental rates in your market and adjust accordingly.  There are some great rental rate tools on the Internet, one can be found on Rentbits.com. 

The way I handle renewals is by sending a letter to the tenant notifying them that their lease is about to expire.  I send this letter to them 60 days in advance, so that they can give me 30 day notice if they plan on moving out.  I include a new lease agreement with this letter.  After analyzing the market, I determine what their new lowest rental rate should be (sometimes it doesn't change from their current rate).  I then give them these four options (lets assume that their current rate is $1,000):

1. Renew for 1 year at $1,000/month
2. Renew for 6 months at $1,050/month
3. Renew on a month-to-month basis at $1,099/month
4. Submit notice and vacate property by mm/dd/yyyy

I make it as easy as possible for the tenant to choose an option, sign the lease, and return it to me.  I also make sure to remind them of the high costs associated with moving (think utility start stop fees, deposits, cleaning fees, moving truck, etc.).
  • April 30 2010
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