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#391584 - 10/12/11 01:09 PM Rental Rate Increases and Your Real Estate Investments
westrealtyadvsrs Offline
Member

Registered: 09/27/11
Posts: 32
Loc: San Diego, CA, USA
Once you have figured out the tricky situation of when to raise rents on your real estate investments, you need to figure out exactly how much of an increase you will apply. The general rules of how much to raise a tenantís rent vary wildly from one investment property to another. The only real answer that can be given is it depends upon the extenuating circumstances of that particular investment property. Some of the variables associated with an increase in rent are the market conditions, the relevant market rates, if any improvements have been made to your investment property, and what effect this increase may have on your occupancy rates.

One way to determine the market rate for your real estate investments is to compare it to several other similar investment properties. You will want to figure out the average rate per square foot of many similar rental properties in that area, and then compare and contrast your investment property to those to find an appropriate rental rate. The most important aspect to understand in all of this is itís most important to understand where your real estate investment properties are priced relative to your target market. If you take the time and effort to do this, you will always find a competitive rate for your rental property.

Another factor to consider when setting the rental rate on your real estate investments is the overall occupancy rate in your target market. If the rental market is slow at that particular time and vacancies are plentiful, then be careful not to increase rents too much or your tenants will leave and find better pricing.

To summarize, there are going to be times when itís necessary to raise rental rates on your real estate investment properties, such as after improvements or an increase in property taxes. But be aware that any time you raise rates, you are striking a balancing act between getting the most revenue out of your rental and occupancy rates. And as we all know, if your occupancy rates suffer, so will your bottom line. So you may increase rates, then find these increases to actually be costing you money in the long run.

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#456100 - 12/30/16 10:11 PM Re: Rental Rate Increases and Your Real Estate Investments [Re: westrealtyadvsrs]
Jhony Offline
Member

Registered: 12/13/16
Posts: 44
Loc: Maharashtra > Other areas
Hi

Yes rental rate of property increases the investments

Thanks,

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