Increase apartment rental rates in a recession? Preposterous, you say! Yes, it is – IF you have not been keeping up with the maintenance needs of your tenants and over all customer service. If your property management company has not been responding to the everyday ebb and flow of maintenance and upkeep of your investment property, than you can rest assured that when you post that 30 or 60 day “Change of Rental Terms” notice, that a series of “30 Day Notices” from your tenants will soon follow.
What is the answer to raising rents in a tough apartment market such as Los Angeles? Responding to maintenance requests. The residents of your investment properties will always appreciate quick turn around of their maintenance requests and will remember such service when the it comes time to keep rents up to market. I am not talking about a super significant raise here folks – just a gentle increase to help you, the landlord, keep your NOI through these trying time. In my experience here at First Light Property Light Property Management, Los Angeles, a resident seldom moves out of a building for a subtle increase of 3% to 5%. Early on we did, however, find that if we as a property management team happened to have overlooked a resident’s maintenance request, that this overlooked request was the FIRST thing they brought up when the rate increase letters went out. The outstanding issue was promptly resolved, but it would have been much easier on to have handled it within the first 24 hours and exceeded the expectations of the renter.
Is it good business practice to raise rents in a bad economy? My opinion is yes, but only if your property management has kept a very tight ship with customer service to tenants and have kept up with their maintenance needs. If your investment is providing superior service to your tenants then it deserves to be compensated. What do you guys think: raise or sustain? What are you doing in your communities?
-Trevor