I usually do not raise rents on a regular basis but recently I have not kept up with the market rate by a long shot. And when I do raise the rents, my tenants (few) complain even though my rates are below market value.
When a vacancy does occur, you may be lucky to only lose one month of income because of the clean up time needed. One way I save money and time is to offer a prospective tenant a $1K discount when the paint required is marginal. Then they can pocket the money but if they do paint, I offer to pay for the paint. This method results in both parties saving money and time to occupy the rental.
Question:
What is the going rate for a new nominal kitchen? $10K, $20K?? and how long does it take? Four weeks?
El T, you know how it is with contractors. Get at least three estimates. It doesn't take much for the cost of a kitchen or bath remodel to get to $12k. I'm no handyman, in fact I can't nail two pieces of wood together. But i do have a ton of experience with rehab of properties. Always be on your toes, but it sounds like you already are! Right Sc?
i usually like to be below market value to avoid vacancies. Check Rentometer.com for an idea of market rents in the subject property area. Some of my longer term tenants are way under market as rents have gone up faster and way more than my increases. I keep my increases at about 7%, and for sure under 10% ( tenant protections kick in ). I raise rents every three years sometimes longer. The downside is if rent control kicks in and the government prohibits future rate increases. Then I’m stuck. I’m as fucked as el doctor on a Saturday night in West Hollywood. Every vacancy costs me $8 to $10k minimum. Between cleanup, paint, carpet and missed rents ( during rehab,). I never waive security deposits, they are important. I do however let them pay the security deposit in up to 6 installments ( temporarily higher rent for a few months). I’m not saying my way is the only right way but I have learned some lessons over the years. Good luck El T. And remember real estate is for buying not selling.
He is adding in the lost month or two of rent for the cleanup and getting someone new set-up. Add a third month for airing the place out if the last tenant cooked with curry. No amount of vanilla extract in the paint can get that smell out.
Thanks Bigballss.
You make some excellent points!
I usually do not raise rents on a regular basis but recently I have not kept up with the market rate by a long shot. And when I do raise the rents, my tenants (few) complain even though my rates are below market value.
When a vacancy does occur, you may be lucky to only lose one month of income because of the clean up time needed. One way I save money and time is to offer a prospective tenant a $1K discount when the paint required is marginal. Then they can pocket the money but if they do paint, I offer to pay for the paint. This method results in both parties saving money and time to occupy the rental.
Question:
What is the going rate for a new nominal kitchen? $10K, $20K?? and how long does it take? Four weeks?
Thanks Amigo.
Tony
Hi El T,
i usually like to be below market value to avoid vacancies. Check Rentometer.com for an idea of market rents in the subject property area. Some of my longer term tenants are way under market as rents have gone up faster and way more than my increases. I keep my increases at about 7%, and for sure under 10% ( tenant protections kick in ). I raise rents every three years sometimes longer. The downside is if rent control kicks in and the government prohibits future rate increases. Then I’m stuck. I’m as fucked as el doctor on a Saturday night in West Hollywood. Every vacancy costs me $8 to $10k minimum. Between cleanup, paint, carpet and missed rents ( during rehab,). I never waive security deposits, they are important. I do however let them pay the security deposit in up to 6 installments ( temporarily higher rent for a few months). I’m not saying my way is the only right way but I have learned some lessons over the years. Good luck El T. And remember real estate is for buying not selling.
keep ‘em coming Amigo!
that's how you get the best tenants
keep rents low and waive the security deposit