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man opening wallet cash show -I know I should raise the rent but

I know I should raise the rent but…

We’ve had the same tenant in our Calgary downstairs suite for five years. I know I should raise the rent but… he’s quiet, polite, respectful, always pays on time, and socializes outside of his suite. He’s had health issues and has been laid off a few times during the last 5 years. Regardless, he always finds a job and pays his rent on time every month.

I know I should probably raise his rent a little bit every year, but I won’t because of his uncertain job situation, health issues,  and stellar track record. The peace of mind I have from a reliable, trustworthy, easy to work with the tenant is worth more to me than making an additional $400-$500 a year from a slight rent hike.

I didn’t raise the rent for my suited Fort Mac property either. The tenants have been with me for two years, pay two weeks to a month ahead of time, are clean fanatics, and have been wonderful to work with.

The house has had tons of issues (a crack in the foundation was the most recent disruption), and they’ve been beyond patient and understanding. They have also put up with grief from the tenants in the upstairs suite (they’re gone now thankfully). They stuck it out, didn’t complain, and have told me they want to stay at least another three years. I believe good behaviour deserves to be rewarded and I chose to keep their rent the same. Given the highly transient rental demographic in Fort Mac, tenants who stay long-term and are good to work with are golden.

That’s not to say I won’t raise the rent for other properties.

Why I raised the rent

A new tenant and a new lease are a different matter.

When tenants from another downstairs unit property left, I checked out comparative prices and noticed the rental rates had increased. I advertised the unit for $200/month more than the previous tenants paid. One person turned in an application for $1200. When I lowered the price to $1150, in came another three applications. If it doesn’t rent within the next week, I’ll reduce the price to $1100. I’m still on a par price-wise with similar rental units and would rather have it rented this month at $100 less than have it sit vacant.

When my tenants of three years in my Edmonton condo asked to renew, I chose to raise the rent by 4% after looking at comparative property rentals. The tenants have well-paid solid professional jobs, and I know they can easily absorb the increase. I also know they don’t want to move because they love the area.

As an Alberta landlord who writes about everything landlord-related every week, I realize I’m breaking the norm by not keeping up with inflation and rental increases. But – I’ve been able to keep my properties rented during two recessions, two floods, a fire (in Fort Mac), and a pandemic because I’ve paid attention to what’s going on with the economy, was aware of my tenant’s financial/work situations, and was responsive.

At the end of the day,  actions have consequences. If raising the price makes quality tenants look for another place to live, I’ll keep it the same. Don’t get me wrong, I love formulas, especially ones that create profit, but people and life don’t always fit neatly into a formula. Sometimes you have to play it by ear.

What are your thoughts on raising the rent? What do you do? I’d love to hear about it [email protected]

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