Am I evil??

[mom-from-missouri]

My rental house (house I owned before I married), I have been renting out for $800 a month.
I just sent them off a letter, that their rent is going up an additional $300 a month. Is this too much of a jump??
That will make the rent $1100 a month. Agents have told me I could probably get up to $1400 a month.
I am still making payments on it of $300 a month. But, my insurance just went up by an extra $200 a quarter, and the property taxes went up (this years will probably be around $3200) plus I have to pay income tax on it.
With this increase, I will actually make some money to go into the repair fund.
I also changed the lease to a month to month, as having a year long lease is scaring potiential buyers.
Can I get some opinions from you all??
(also, its a 2 hr drive from my house, so gas & time are also factors here as far as expenses go)

[LuxLiving]

Evil? No.

Practical.

How much notice do they have before they have to make the increased payment? AND, can you change the lease on them in mid-stream as to terms?

Month to month does sound better if you're trying to sell out.

[tinapbeana]

Personally, I find a 37.5% increase in one fell swoop to be a bit large. If I were the renter, I would be hightailing it out as soon as feasible once I received the notice.

With that said, if this is what is needed for the house to not be a financial drain, then losing your current tennants might not be a bad thing. Market the house at $1200 and get new tennants (and get $100 than you're currently anticipating per month).

[disneysteve]

That's a 37.5% rent increase! Wow! Yes, I think that is way too big of a jump. Sounds like you've probably been undercharging for quite a while.

What may happen is your current tenants will decide to leave and you'll have to get someone new in at current market rates. I can't imagine anybody wouldn't fight a 37.5% jump like that.

[Gruntina]

If I was paying 800 for some time and all of a sudden get 300 increases.... yeah I would have thought you to be inconsiderate! Sorry! Sounds like you need to revaluate your rental agreement every year so you would not have to make a large jump like that.

I know you are looking out for your own interest but being fair and reasonable to your tenets is important. They are taking care of your rental unless they are causing damage which would mean eviction if so. You and your tenet did agree 800 a month when first leased, it would be fair to slowly increase that with advance notice.

[sakigt]

Honestly, it would depend on how good the tenants are. If they are good and comparable areas are going for higher, I would raise it by 100 a month. That extra $200 you get may not be worth the hasstle of getting new tenants that trash the place...

[Daylily]

I agree with some of the earlier posts that $300 at once is too much if you are wanting to keep the current tenants.
How long have they been there? Have they been good tenants?

[mom-from-missouri]

I have to give 30 days notice to increase. Their current lease expires July 15. So the increase is for July 15 on.

The current lease (and the new one) states only 2 persons to live in the house. Per the real estate agent, family who live nearby and neighbors, 3 boys, sometimes 4 live there. The house across the street rents for $750 and is only a 1 bedroom, 1 bath and no office or dining room. Mine is 3 bedroom and 2 bath, and also has office, diningroom and gameroom (which apprently they are using as additional bedrooms).
If they were to leave, it would not break my heart. they have lied to me and told me only 2 are there. If only 2 are there, why 4 beds (unmade per my real estate agent and very apprent they are being used) there? also they were to have no pets in the house, and she keeps finding a dog and dog mess inside the house.
My agent says I have been under pricing it big time. It is a college and airforce town, with more demand for housing than available housing.

[Gruntina]

I am not sure what the exact legal law but I know in Bay Area CA, landlords are allowed to raise the rent by how many people are living at that place as long as the count of people does not exceed the federal count for certain size homes. (The counts are different for "roommates sharing” and "intermediate family with children")

If you have a contract with the tenet, then you need to follow up and take action if they are not following the contract such as lying about how many people there and if they had pets. If you do not have a contract, then it would be in your best interest to get one made.

if its an annual year end of the lease, then I believe the $300 increase is okay when its for the reasons you stated with the cost of living and fees went up in that community. If the tenet can not accept the $300 increase and you are in search of a new tenet, then you can list the price that match the community.

[disneysteve]

1. You've been underpricing for a long time, so it is time to stop cheating yourself and raise the rate closer to market rates.

2. Why have you continued to allow these people to live there? You know they are in violation of the lease regarding number of residents and pets. If their lease expires July 15, give them notice tomorrow that you will not be renewing their lease due to the violations. Find yourself new tenants that will pay you fair market value and, hopefully, honor the lease.

[mom-from-missouri]

Problem is, I can't "prove' they are living there. I can only prove the 2 who signed the lease are. Per my attorney, proof is: name on a lease, name on a utility, name on mail (which I'd have to break federal law to get their mail, so forget that one) or a public notice (be nice if one would get a speeding ticket that would be put in the paper with their address).
i could get confirmation from the employeer (US govt) IF I knew their names. We are trying to get their names. The military can then confirm is my house is the address that they have listed.
All of the young men in question get a housing allowence of at least $750 a month. So, the should be able to afford it.
As disneysteve pointed out--they have been lying to me, so the more I think about it, if they move on, it would probably be for the best.
In the letter with the new lease, I did mention that I had confirmation more than 2 were there.
I think they have taken advantage knowing I don't live there locally.

[LuxLiving]

Do a google search for "unauthorized residents in rental" and I think you might come up w/some questions/actions for your lawyer.

[mom-from-missouri]

I did. I took in a bunch I printed off the internet. Most did not apply in Missouri. Burden of proof is on the landlord. If I don't have proof, a judge would throw it out. Pictures are not proof, car tag numbers are not proof--someone (military friend) could have a car parked there while overseas), I have to be able to prove it. even a neighbors testimony can be argued that someone was just a guest.

Meanwhile, DH has asked a coworker about this issue (co-worker has lots and lots of rental units) and he said the only time he has won this one in court was where he had copies of utility statements in the persons name, and an affidavid from an employeer that was the persons address on all their HR records.

[Coleroo]

holy moly!!

i think i would wet my undies if someone sent me that note! If the lease renewal wasn't coming up I would feel thats a terrible jump. From a renters point of view, a sudden increase of that much (a whole car payent) can send their life into uproar (even if they do get an allowance). Also, if you were keen on keeping current honest, quality long term tenants that would be too much too - the sudden increase would cause them to feel cheated and regretful that they've been "good" and may leave the place trashed and hurt. BUT it sounds like your case its a "do or die" kinda wake up call to the current renters that they probably need. If you are underpricing all the other places, Im sure all of the other college kids know it and want to take advantage of it (i live in a huge college town).

So... it sounds like the sudden jump would be a great way to rid yourself of trouble and pull in better tenants.

[jmjj215]

Well, if you want them out, maybe it's a great idea to make it a big jump like this. Then you don't have to prove anything, just force them out w/ a market rate for rent.