"I Need To Increase Their Rent, But My Tenants Can’t Afford It" — This Landlord Has Started A Huge Debate On Living Factors In The US

An anonymous Quora user recently got a lot of people talking on the platform after posing this question: "I’m a landlord, and I have to increase rent, but I know my tenants can’t afford the new price. What should I do?"

Now, landlord/tenant laws vary by state — for example, in California, landlords cannot raise rent more than 10% total or 5% plus the percentage change in the cost of living – whichever is lower – over a 12-month period. However, in general, rent may be raised annually at the rate of inflation.

And, there are typically big divisions in perspectives when it comes to renting vs. being a landlord. Last year, we interviewed a landlord who posted TikToks of himself doubling a tenant's rent, and it caused a huge debate:

So, here is what the people of Quora are saying about this landlord's question:

"We hate having to raise the rent, but that’s just the reality of being a landlord. We try to keep the increases minimal for our existing tenants. Most of them stay with us seven to twelve years. When one leaves, we raise the rent for the next tenant to the market rate. When we last increased rents ($35–100 depending on the property), we offered two-year leases to help offset the increases. When we increased one (the tenant has been with us eight years and always paid less than the other two houses in the same community), they called and asked if we could give them another two-year lease. So we did. It means it’ll be two years before we raise their rent again (which is still $50/month below the other two properties)."

"Let me share some food for thought: My last landlord wanted to increase the rent by $1000 a month. At this point, I was already paying $3400 a month. I decided I was not going to pay that and move on. The apartment ended up being vacant for five months because she was asking far too much. After month two, she started lowering her price, and by the fifth month, she was down to asking $3600. She lost out on $17,000 because she wanted to make an extra $12,000 per year. I would've paid the extra $200 she ended up at, but she wanted to be greedy. Honestly I found it great payback. We were excellent tenants. We treated the house as if it were our own. We did all the landscaping, which was a large area, we cleaned the gutters, etc.. it isn't always the best idea to tempt fate. Think before you decide to run off good tenants."

"This is a tough situation and I have been in this same situation. I had superb tenants. You could eat off their floors, and they been there 16 years. However, property taxes have gone up, and insurance has gone up but they cannot afford to pay more rent. I feel like I’m furnishing them a home. It is a nice ranch-style home with good quality build and finishes."

"My landlord had this issue a couple of times. He 'had to' raise the rent when his insurance and property taxes went up. He has several tenants in a few homes. What he does is increase based on individual tenants, how they are as tenants, and their money situations. The last time he increased, I was on disability and he knew I was on a very fixed income. My rent only went up $40. Meanwhile, another lady is a pain in his butt and she’s always bragging about her income, so he had no problem increasing hers by $120. He says it evens out, and he’d rather keep the good tenants than lose them. She gets upset about the increase but it’s no sweat off his back because he’s got a waiting list for prospective tenants. He has said being a good tenant outweighs the extra cash each month if he knows he has zero problems to worry about."

"This is really an easy question. All good, long-term landlords will say the same thing (because there is really only one answer that lets you be a long-term landlord): If you like your tenants, don't..."

"Commercial real estate is priced on ratios. When you purchased the property, you looked at the ratios, decided it was fairly priced, and obtained a mortgage. Nearly all of your annual expenses are in the mortgage. Taxes, insurance, upkeep, advertising, legal, bad debt, etc. are all relatively small. The mortgage is nearly always fixed, so your expenses should only go up a little bit from year to year. Increasing the rent when you have turnover should take care of your minor expense increases. If not, minor rent increases (less than inflation) should cover it.

Here’s why the math doesn’t make sense (usually) to lose a good tenant. Let’s say your property rents for $2000/month (of course, there is a wide range of rental rates, but the ratio will be the same). You decided to increase it to $2500/month, which is more than your tenant can or wants to pay, so they vacate.

Now you need to repaint, replace some worn carpet, update the old bathroom fixtures, and replace the water heater that was long overdue for an emergency repair at weekend rates, so you may as well take care of it. It takes you six weeks to do the work and two weeks to re-rent it, so you’re out $4000 in rent. The repairs cost you $6000, so your total expense/lost revenue is $10,000. The new tenant will pay $2500, but it’s going to take you 20 months to break even on the expenses. Unfortunately for you, the new tenant only stayed a year before relocating to another city, so you have now lost rent and need more repairs/refresh to get a third tenant in. Now you’re at 30 months to break even on your increase. Or, worse yet, the new tenant doesn’t pay, and you are forced to evict. It is hard to recover funds from a deadbeat tenant with no assets to attach to and often less-than-optimal employment, so you wind up eating the lost rent PLUS legal fees. Certainly, your evicted tenant didn’t leave the place pristine.

In any case, you spent a lot of money to get the $500 that you shouldn’t have 'needed' if you’re running your rental business right. This is why long-term landlords don’t do what you’re considering. Please reconsider. Best of luck to you."

—Eric Richardson, Quora

"I have rented the same place for 16 years and only had one increase at the five-year mark. After that, my landlord said he wouldn’t raise the rent again because he knows my income is fixed, I don’t cause any problems, and I take care of their animals when they are gone. I take care of the place as if it were mine and notify when repairs are needed. I pay rent on time and improve the place. Are your tenants any of the above? Can you afford to get rid of great tenants and get someone who doesn’t pay on time and destroys your place? You need to look at the downside of getting more rent from people you don’t know and keeping current tenants who have proven what and who they are."

"Everyone’s circumstances are different. You don’t say why you have to increase rent. I’m sure there are reasons why you want to. Still, unless you are actually operating at a loss such as the rent not covering mortgage payments or similar circumstances, I’d be really careful, especially if you have good tenants. I never raise rents for a good tenant who wants to renew. I’ve got some who have paid the same rent for five years, more in some cases. Good tenants are worth far more than a measly increase in rent. I’d only ever consider a rent increase when a tenant moves on."

And, finally, one tenant — who is not the tenant of this landlord — came forward with their personal story:

"I am a tenant. I have been living in this property for eight years. No parties. No complaints. No late rents. Whenever there is a minor issue with the house, I fix it. I pay out of pocket to recharge the AC. I painted and replaced cabinet doors and handles because some were broken and some were missing handles when I moved in. I replaced the stove and fridge because what was here wasn't working properly (they are still in the laundry room).

My landlord had been in the property two times in the last eight years I have been living here to inspect it only. Recently, I had to text him because I replaced a double-slide glass door that has been cracked since I moved in because the door was keeping mold trapped between the broken glass (I sent him pictures). I paid to fix it but the crack and told him, he did not offer compensation. He then told me he has to raise my rent due to inflation and THOSE extra expenses. Why do I have to pay for his house repairs? The house needs major repairs due to the lack of maintenance. Now, I am looking to move out before the house gets worse, and he blames it on me. I am afraid of telling him anything is wrong with the house because I can't afford to fix it or have him raise the rent even more to make up the repairs. I love the area and I like the house, but I can't pay more. It is just me, with two jobs, and my two kids. Before you all consider the market, you should consider the quality of the product you are offering to your tenant/customer. And the quality of customer. 🤷‍♀️."

—Lone Star, Quora

Now, we want to open the floor to you — what are your thoughts? Let us know in the comments!