Reasonable rent is determined by what people are willing to pay to live in your rental units. During the current financial crisis some landlords have found that their current tenants cannot or will not pay the previously established rent while others are finding that former homeowners who have lost their homes can pay a bit more than their tenants previously. So it?s time to reevaluate your rent prices and determine what better suits the financial environment.
Begin by evaluating your current tenants and the rent they pay. Are they having a hard time making the payments or do they seem to be handling them just fine? If you have open units look at what is driving people away, do they think the price is too high or do they see a low price and assume the property isn?t up to their standards. Carefully examine your neighborhood and the prices comparable units are charging for rent.
Then, when it comes to making a change in the rent make, small incremental changes regularly. If you?re raising the rent regularly on an annual basis you?ll keep your property in line with the current economy in most situations. If you have to drop the rent to keep tenants then you may want to work out a temporary situation where the rent will decrease for a set period of time and then bounce back up to the previous rate. Remember to look at individual rental agreements so you?re not breaking a lease with your price change. If you have to change it during the lease term you?ll have to have an amendment created and agreed upon and signed by all tenants.