Tenant trying to call the shots regarding rent increase

[wylie]

After having not raised the rent on one IP for three years for personal reasons and then a year ago due to a last minute change of mind from sitting tenant who was leaving, but suddenly asked to stay, we decided to raise the rent on this house by $30 per week when the lease is due next month. That brings it to market rates, but if it was empty we would ask a little more in case we got lucky.

I notified the tenant that we would be increasing the rent by $30 per week, explained that this is the first raise in three years (she has been there two years) and let her know she could let me know if she wished to stay.

Got an email back a couple of days ago saying she and her housemates had discussed it, and decided they "would accept $25 extra" .

I smiled to myself when I read it, hubby smiled too and said "stick to the increase".

She is a fantastic tenant, paying less than market due to circumstances that mean she was "in the right place at the right time" but her use of "we will accept" made me smile. Who is running this show?

We don't want to lose her, and risk having a week or two vacancy, but we are sticking to our guns. Bit cheeky!

 

[Perp]

I notified the tenant that we would be increasing the rent by $30 per week, explained that this is the first raise in three years (she has been there two years) and let her know she could let me know if she wished to stay.

Got an email back a couple of days ago saying she and her housemates had discussed it, and decided they "would accept $25 extra" .

It is cheeky. I have a near-identical situation, where somebody rented a place that's was previously $175 per week for $155 per week in a lease-break situation. (The tenant who broke the lease paid the $20 per week difference.) We told the tenant that we'd offer them a new lease at $165 per week, our reasoning being that we recognise that they're accustomed to only paying $155 per week, and $175 was in a hotter market - market is probably $165-170. They offered to pay $160 per week. We repeated $165 and advised that we planned to advertise at $175 if they decided to leave. They signed at $165.

Just part of the game...

 

[Lil Skater]

Yep had tenants bluff and say they will leave, but don't because they realise all the work that goes into moving and that they are still paying less.

Had one that I suggested a $30 increase to the landlord $190 to $220 and still $30 under market and they said no and to only do $15, the tenant then abused me for the increase and threatened to leave unless there was no increase!

Also, if they're sharing a house, what's an extra $2.50 per week each?

 

[jaycee]

After having not raised the rent on one IP for three years for personal reasons and then a year ago due to a last minute change of mind from sitting tenant who was leaving, but suddenly asked to stay, we decided to raise the rent on this house by $30 per week when the lease is due next month. That brings it to market rates, but if it was empty we would ask a little more in case we got lucky.

I notified the tenant that we would be increasing the rent by $30 per week, explained that this is the first raise in three years (she has been there two years) and let her know she could let me know if she wished to stay.

Got an email back a couple of days ago saying she and her housemates had discussed it, and decided they "would accept $25 extra" .

I smiled to myself when I read it, hubby smiled too and said "stick to the increase".

She is a fantastic tenant, paying less than market due to circumstances that mean she was "in the right place at the right time" but her use of "we will accept" made me smile. Who is running this show?

We don't want to lose her, and risk having a week or two vacancy, but we are sticking to our guns. Bit cheeky!

Big deal

It's part of doing business, dealing with people

Some people even say yes when a customer asks for something.


Now personally, I'd prefer the tnent not ask, cause I have to think about it, repsond and all that, much easier for me personally not to deal with that ce I don't like to.....but that doesn't mean it's cheeky or anything that people who choose to provide service/products for moeny houldn't expect.

Had they asked would you accept $15 I'd have thought I was cheeky, bt $5 was about the least amount of discount they could even ask for.

Lots of people ask for or look discounts, nothing different here, why should it be different ?

 

[Scott No Mates]

All part of the negotiation process, for them it is a saving of $250 pa, for you it may cost a trip to the tribunal to justify the rent increase (they have been there only 2 years and the judge wouldn't care if you hadn't raised the rent for 20 years), worse still they could leave & you have 3-4 weeks vacant which is alot more than the difference. If you like, sign them up to a new lease and lock them in for a longer period as a trade off for the reduced offer.

 

[AlmostBob]

longer time at less money,,

punish me, punish me​

I dont think longer at lower rate is a real disincentive for the cattle/penguins/livestock/crabs/lemmings/sheep to try it on again next time,
$40

 

[jaycee]

Whether these particular tenatns try it again or not, someone will and we'll have to deal with it.. business & customers, who knew hey ! Now a tenant then responding back again that they are going to take you to the tribunal or whatever other angry response over $10/week or something is unreasonable, but hopefully it really wouldn't get to that most of the time.

 

[wylie]

Actually, the bit I think is cheeky is the wording "we have discussed it and will ACCEPT $25".

I wasn't offering the increase for her to "accept". She accepts it or moves out and we will ask $550 hoping to get $540 minimum.

And I know it is part of the game. I've been playing this game for over 30 years. I was just sharing.

 

[jaycee]

Actually, the bit I think is cheeky is the wording "we have discussed it and will ACCEPT $25".

I wasn't offering the increase for her to "accept". She accepts it or moves out and we will ask $550 hoping to get $540 minimum.

And I know it is part of the game. I've been playing this game for over 30 years. I was just sharing.

I know Wylie..

I guess they play the game too, and the wording of their repsonse wa meant to suggest something which could swing your decisions their way.. something like we think this is fair to show they weren't being "unreasonble" by not accepting any raise at all. They probably also probably want to feel a bit less out of control of their expenses in their own minds (?) I know most people like to be good "negotiators".

 

[Georod3]

I had this with a tenant I wrote back..
Do you think the $5 week covers the increased cost of

Water rates
Land tax
Insurance home and landlord
Rates
Interest rates (at the time going up)
Management fees
Maintenance

And who knows what else... Plus I had just put in a new oven $800

Funny thing.. They signed... For the increase ... Before I increased it more...

 

[DaveM]

Got an email back a couple of days ago saying she and her housemates had discussed it, and decided they "would accept $25 extra" .

Write back,


Dear Ms XXXXXX

Thank you for discussing the proposed rental increase with your housemates to advise them that a rental increase was upcoming to allow them to budget the changes. Also thankyou for your counter offer of $25 per week.

However this is not an episode of Australian Idol where your votes count, nor is it a democracy where majority rules.

Upon consideration of the rental review and subsequent discussions, the rent will be increased by $50 per week in 90 days from the date of this letter.

I look forward to your either your written acceptance of this increase, or your letter of intent to vacate the premises, within 7 days.

Regards
Wylie

 

[Georod3]

Thats a great idea..

Set up a phone voting line at $2.00 a vote and go from there.. They can ask friends and family and Facebook to vote... Who knows maybe the votes will cover the rent increase !

I like it !

 

[buster]

Whem my tenant complained about the rent going up $25 and said they would only agree to $10. I said fine, but you can pay the rates, it is your choice. They decided to pay the $25

 

[Ideo]

Do you offer less than asking price for a car or house?

Same principle.

 

[happy landlord]

After having not raised the rent on one IP for three years for personal reasons and then a year ago due to a last minute change of mind from sitting tenant who was leaving, but suddenly asked to stay, we decided to raise the rent on this house by $30 per week when the lease is due next month. That brings it to market rates, but if it was empty we would ask a little more in case we got lucky.

I notified the tenant that we would be increasing the rent by $30 per week, explained that this is the first raise in three years (she has been there two years) and let her know she could let me know if she wished to stay.

Got an email back a couple of days ago saying she and her housemates had discussed it, and decided they "would accept $25 extra" .

I smiled to myself when I read it, hubby smiled too and said "stick to the increase".

She is a fantastic tenant, paying less than market due to circumstances that mean she was "in the right place at the right time" but her use of "we will accept" made me smile. Who is running this show?

We don't want to lose her, and risk having a week or two vacancy, but we are sticking to our guns. Bit cheeky!

Your rent rise is very steep. I have managed my own properties for many many years. When you are rising rents you need to do it regularly, not leave it a few years.

Your tenant could turn around and say, "well we are going". Yes potentially you could get more rent, but the cost and time involved in finding a new tenant far outweighs $5. You also need to take into account if you want to keep the tenant, if so take their counter offer and next year put the rent up again.

The other thing is you can't expect tenants to pay market rate if they have been renting your property for a few years. I just signed a new tenant up to one of my properties and she was leaving a property managed by a real estate agent, because of the way they put her rent up each year to market rate even though she was a long term tenant. You can't let the rent go to far below market rate, but you can't expect long term tenants to pay going market rates. You need to have a happy balance.

 

[DaveM]

A long term tenant doesnt get a discount just because they are a long term tenant. Paying rent each month doesnt really earn much of a discount. However a slightly lower rent for a tenant that significantly reduces your maintenance costs is certainly worth it.

 

[handyandy]

The other thing is you can't expect tenants to pay market rate if they have been renting your property for a few years. I just signed a new tenant up to one of my properties and she was leaving a property managed by a real estate agent, because of the way they put her rent up each year to market rate even though she was a long term tenant.

Maybe she is telling you this to play mind games

 

[skater]

The other thing is you can't expect tenants to pay market rate if they have been renting your property for a few years. I just signed a new tenant up to one of my properties and she was leaving a property managed by a real estate agent, because of the way they put her rent up each year to market rate even though she was a long term tenant. You can't let the rent go to far below market rate, but you can't expect long term tenants to pay going market rates. You need to have a happy balance.

Balderdash! ALL of my properties have a rent review each six months and if a rent rise is in order they immediately get sent a notice advising that their rent will rise, long term tenants included. I don't rent below market rates at all. To date, I have only had one tenant decide to leave because of a rent rise, and to be honest, I believe she would have left anyway as she was now single, renting a house. She moved into a flat.

A long term tenant doesnt get a discount just because they are a long term tenant. Paying rent each month doesnt really earn much of a discount. However a slightly lower rent for a tenant that significantly reduces your maintenance costs is certainly worth it.

IF I was going to give a reduction in rent, then the tenant would want to be a special kind of tenant indeed. Like Dave said, paying their rent on time does not warrant any special treatment. They are just holding up their end of the deal. Same goes with maintaining the garden, and small maintenance items (light bulbs, etc).

I currently have one long term tenant (a painter) who paints the property each year. It doesn't need to be painted, he does it because he wishes to change colour schemes, etc. Does this warrant a reduction? IMHO, no, it does not.

Another we had at one stage, wanted nice light fittings. He bought them, we installed them. The deal was they stayed when they vacated. Do they get a reduction because they have helped in a small upgrade of the property? No, it was done for their benefit only.

 

[Piston Broke]

After 3 years of no rent increases it's obvious who has been calling the shots.

 

[rchad]

Your rent rise is very steep. I have managed my own properties for many many years. When you are rising rents you need to do it regularly, not leave it a few years.

Your tenant could turn around and say, "well we are going". Yes potentially you could get more rent, but the cost and time involved in finding a new tenant far outweighs $5. You also need to take into account if you want to keep the tenant, if so take their counter offer and next year put the rent up again.

The other thing is you can't expect tenants to pay market rate if they have been renting your property for a few years. I just signed a new tenant up to one of my properties and she was leaving a property managed by a real estate agent, because of the way they put her rent up each year to market rate even though she was a long term tenant. You can't let the rent go to far below market rate, but you can't expect long term tenants to pay going market rates. You need to have a happy balance.

Nice balanced perspective - we use the same strategy and principles