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I know someone who owns a small 3BR in the east village and not raised the rent from the original rent of $4500 given to the tenant in 2007. How much is a reasonable rent increase? Based on inflation, it looks like $5000 is a minimum floor, excluding any changes in the EV rental market. I was thinking suggesting $5200, but there is a concern that the tenant could move out with such a large increase. Thoughts??
I am not a landlord, but live in a studio now and previously lived in shares...Are there the same 3 people living in the apartment since 2007? My guess would be no, and that there are new people who have moved in with a budget around $1,500 per person, per month in rent.
Had the landlord raised the rent $100 each year, it wouldn't have made much of a difference over the years, however, most of the people currently living there (my assumption) would see the almost $200 per person increase a little extravagent...since, again, my assumption is that there are all new people living in the apartment.
I would say raising it to $5,000 would be too much, and stick to $4,800 for the first year to see what happens. I would move out if my rent rent up more than $100 per person, yet alone close to $200 in one year (and had to share with 2 others in the east village). Just my thoughts. At $1,700 per person, I would think they would rather just find a studio for $1,800 nearby.
1) How do we know three people are sharing rent on this apartment? Couldn't it be two parents and two kids? Or maybe a single woman who wanted both a home office and a gift wrapping room?
2) When you're buying stock, do you determine its valuation based on where it was trading five years ago, or do you evaluate the company's financials as they stand today? Why should rental property be any different?
Rather than throw around arbitrary numbers, have this person you know determine what the market will bear for the apartment today. If it's a good tenant, lower the price a bit from market so they don't bail.