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Anonymous

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Posts: 28
Reply with quote  #1 
Do any of you California landlords have an automatic annual increase built into your lease if that is legal? If so what percentage do you increase it each year 1% 2%? If you've done this have any of your tenants giving you grief and what was your reply?
LLinVA

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Posts: 365
Reply with quote  #2 
We are in VA and do exactly that, 5%. We tell them it keeps up with inflation and will not go over "market value" which we intentionally do not define. It doesn't make sense to charge someone who has been with you for years more than you can reasonably rent the place for, they will just leave and find something similar. Our leases automatically renew with the increase and it keeps it simple. And, they know what to expect. 
Anonymous

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Posts: 28
Reply with quote  #3 
Do you think a rent increase of 5.5% which would be $100 on a two-bedroom condominium would be a lot? Even with the $100 increase they are 3 to 400 under market value. This would be there first increase. My realtor is trying to tell me to do 10% increase which I know is the standard without be a $200 increase which I think is an awful lot. Just nervous about the whole situation
LLinVA

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Posts: 365
Reply with quote  #4 
We have done 10% when they were significantly below market value, so I don't think that would be unreasonable. Going down to the $100 may be justified if you feel they would be sensitive to it and/or you like having them and would prefer to have them below market value as opposed to having someone new in at market value.
Anonymous

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Reply with quote  #5 
What percentage do you find you increase every year 3% 10%? By me giving my tenants an increase of $100 it's going to be roughly a 6% increase which they're likely going to squeal about but again they're close to $400 under Market so you really don't think that hundred dollars is unreasonable
LLinVA

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Posts: 365
Reply with quote  #6 
We do 5% unless it's significantly under market value in which case we do 10%. Almost any tenant will complain about almost any increase, so don't worry about that. If they are $400 under market, then if they throw a fit and leave then you get someone better in for $400 more every month. You win. If they stay, you get to keep a great tenant and don't have to hassle with finding someone new and downtime, you win. Chances are, even if they claim they are going to leave, they won't. They won't pay $300-400 more for a similar place just to not pay you an extra $100. 
Anonymous

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Posts: 28
Reply with quote  #7 
Thanks first-time doing increase. The man in this condo tends to like to negotiate he's in sales and as far as I'm concerned this time there's nothing to negotiate. Not that I'm trying to be mean but like I stated with the amount that they're paying their lucky and I'm stating in my short increase letter because they're such good tenants something to the effect that they're getting this low increase of $100 and stating how much their unit is under Market that they're getting this nominal increase because they've been such good tenants. My realtor says I should only let them renew for one year I'm going to give them the option of renewing for two years like they had. I'm not a local landlord so that extra year is worth it to me. This guy tried to stick it to me a little bit at the beginning of the year when I took over being there landlord so now I guess you'd call this Karma. Thanks for your reassurance
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