Should You Be Raising Your Rents?
Friday Jan 06th, 2017Share
Of course you should!
I’ve managed property for quite a while now, in doing so I’ve talked to many different landlords and I’m still shocked every time they tell me the rents haven’t been raised in years. From large organizations, to smaller non-profit boards, and most commonly private owners. It seems as though for many tenants, if you are good to your landlord and develop a strong relationship, you’re rent will not increase for years to come.
To many property owners, landlording seems like a hobby. They began investing in real estate and don’t yet have a portfolio large enough to consider a business. I believe this is a mistake, whether you have one door or one hundred doors, you need to separate those assets which are driving a portion (or all) of your income, and your emotion towards those living in them.
Simply put, you are leaving money on the table year after year if you do not raise your rent. Your tenant should not be upset when they learn you are raising their rent, they should expect it, again you are running a business and profits are a high priority. In an average year in Ontario you will be allowed to raise the rent by 2% for existing tenants. If that tenant were to move out and find the same exact unit elsewhere, their increase could be 5-8% or even higher. This 2% helps you cover any increase in carrying costs, and maintain the unit for them.
What are your thoughts on rents in Toronto? Would you raise them even for the tenants that treat your unit well, or would you keep them at a minimum to keep your tenants happy?
Director - Property Management
My Capital Corner Team