Tenants paying way below market

amother

Royalblue

Wed, Dec 23 2015, 5:37 pm

My tenants are paying way below market level for their apartment

and

1- The family had 3 additions since moving in.

2- Theres lots of noise. My ceiling shakes when the kids are home.

3- My financial needs are very different. (Our married kids are not doing well financially, and we must help them).

The last time we renewed the lease, we raised a tiny bit ($100). Next time theyre up for renewal, I dont want that big a family that makes that much noise, and I can be getting way more rent.

Is the better approach to hint in advance, so theyre not surprised that the next rent increase will be much bigger than the previous one, so they have time to think of options, if they cant afford it, or should we wait until the lease expires?

Deep

Wed, Dec 23 2015, 5:52 pm

A raise of 100$ is not "a tiny bit"! Where do you live? In my city the law allows me to raise my tenants by no more than 15$. Up until recently, I had tenants paying 700$ for a 1400$ apartment. They have since left and we were able to rent it out at market value.

amother

Royalblue

Wed, Dec 23 2015, 5:53 pm

Deep wrote:

This house is under 6 family so there are no restrictions. Its up to the landlord.

The market value is close to a thousand more.

amother

Bisque

Wed, Dec 23 2015, 6:03 pm

This is totally not a fair way to deal with people.

1st if the rents dropped in your area, do you think it would be fair of your tenants to let you know at the last minute that you lower their rent substantially or they leave.

2nd- Why on earth wouldn't you tell them in advance? Do you want to end up in a din torah. There are halachos about these things

MagentaYenta

Wed, Dec 23 2015, 6:12 pm

I would certainly give them more than 30 days notice. I'd let them know that when their lease is up you will be raising the rent to market. That way if they can't afford market rates, they would have plenty of time to find a new place. It would be the humane thing to do.

PassionFruit

Wed, Dec 23 2015, 6:13 pm

I'd go stronger than hint. I'd say, "We have a great relationship, and I am happy with you as renters of our house. However, in January, I am going to need to increase the rent to x. I just wanted to let you know now, so that if that is a problem, we can both work on looking for new renters/housing options."

amother

Goldenrod

Wed, Dec 23 2015, 6:13 pm

Tell them exactly what it will be as soon as pissoble. That way they can make an informed decision. If they decide not to stay, you can find replacement tenants. Whatever they are paying, if you have no tenant for a month or more, you will certainly not be making more money now.

shacn

Wed, Dec 23 2015, 6:17 pm

There is actually a new law in effect with rent increases. Great for the tenants bad the landlords. I forgot what it was, but I'm only a year in in my apartment and I'm happy to know that they cannot increase my rent until year 2 and by then only a certain small percentage. Do the research, I saw it on a billboard in the subway.

But if they don't know about this new law, lucky u. But I would give them a few months notice so they can find somethig better.

Side note- I'm so jealous of my next door neighbor paying only $1100 for a TWO bedroom (she's lived there for some years) and I'm paying $1600 for a ONE! (Lived there about 6 months) Grrrr.

amother

Cyan

Wed, Dec 23 2015, 6:19 pm

I believe there are laws about how to do this.
I know were I have a rental I have to send a letter in advance stating the date the lease is up, the amount of increase and that if they don't want to pay they should move out.
Otherwise if the rental increase is just thrown on them, I believe they have to be given enough time to make other arrangements and move out.

I try to send it 2 months before the lease is up. Example of a form letter:

Quote:

Tenant Name
Tenant Address

Dear Tenant:

We would like to request an increase in your rent to the amount of $xxx.00. This would take effect on xx x, xxxx when your current lease is up. Please let me know if you would like to renew the lease at this amount or if you plan on vacating the property.

Dated: today's date

x ______________________
Landlord Name
landlord address and phone number

If you have to evict them because they don't pay the increase you will not be able to do it right away unless you have proof that you warned them. The judge will most likely give them additional time at the original rate for a reasonable amount of time to make other arrangements.

Amarante

Wed, Dec 23 2015, 6:19 pm

I think the OP is in a hard situation because she shas not an absentee landlord so she has to deal with unpleasantness if the tenants get nasty.

I do think she has the right to raise it to market value especially since these don't seem to be the kind of tenants that a landlord really wants. The Bare noisy and no doub a large family with young children puts more wear and tear on the unit. If they were more pleasant to live with, then pragmatically she might give them a break bit under the circumstances, why should she.

I think you should give them 60 days notice of the rent increase which should be to market value. In my experience, this is more than ample time for them to explore possibilities and decide what to do. In my experience, you need to rent a place almost immediately so there is no particular benefit from looking at apartments months ahead of time since you have to make an immediate decision

LittleDucky

Wed, Dec 23 2015, 6:20 pm

Double check with your local laws. I am not a lawyer but this is what I have learned over the years... You generally cannot raise the rents because the immediate family has grown (ie: they have had more children). It might be different if great aunt Matilda moved in permanently.
Also, there might a limit on how much you can raise their rent- typically if there is a law about it, it would be a percentage of their current rent, not what the market value is.
There also might be a law about how much time in advance you need to give before raising the rent and/or changing the terms of the lease.
Also, ask a shaila about how this needs to be done.

amother

Cyan

Wed, Dec 23 2015, 6:23 pm

unless they are getting HUD or other subsidized rent I don't think the rent increase is limited:

New York City Rent Guidelines Board (NYCRGB) only determines rent increases for lease renewals of rent stabilized apartments, lofts, hotels and single room occupancies (SROs). It does not set the rent increase for vacancy leases, rent controlled apartments, unregulated apartments or subsidized housing. Market rate apartment rental rates and lease terms are negotiated between the owner and tenant.

It doesn't look like NY has laws about how much in advance you have to let the tenant know. Other states do ranging for 60 - 30 days.

MagentaYenta

Wed, Dec 23 2015, 6:28 pm

I think it's kind of sad that the OP only gave two options and saw this as a simple black and white issue, when it really isn't. The responses on this thread show that there are other POVs and options rather than the two she proffered. I'm esp. concerned since she considered 'hinting' about the rent increase rather than addressing it truthfully.

tweety1

Wed, Dec 23 2015, 7:38 pm

As a landlord I'll tell you $100 is not a tiny bit. My tenants know that they automatically get a $50-75 rent increase upon renewal of the lease. Increase depends on dh mood that minute. (lol) we put it in the contract that there will be an increase. Currently we have a tenant with a 4 year lease but in the contract it says that after 2 yrs there will be an increase of $75.

asmileaday

Wed, Dec 23 2015, 7:51 pm

Unless you meant $100 a year, that's not a teeny bit at all. I usually get raised about $25 a month for a 1 year lease. Sometimes less due to rent control laws.
I understand you want to get market value. It is so bad and wrong to "hint". What does that even mean? Would you like if someone does that to you?
Straight out clear communication with enough advance notice is the way to go.