Rental Increase and Month to Month vs. Yr Lease

[clstevens]

Hi,

Last night at the REIN meeting in Coquitlam, one of the lawyers speaking had mentioned that month to month rentals were more common. I have always used year leases and wonder if it is true that most people do month to month. I thought that a year lease was preferable. Is it not?

Also, I have great, trouble free tenants in a cash flowing property, their lease is coming up and I would like to have them sign for another year. I am not sure though as to whether I should increase the rent or not. I actually feel it would be greedy to increase it as it isn`t necessary on my end but I wondered if I didn`t do an increase, even of a very small percentage, that if they end up being very long term tenants, I might be setting a poor precident. What happens next year if I have to increase it significantly? I don`t want to set myself up for push back.

Also, if they don`t want to sign for another year and want to do month to month, should I keep their rent at the current rate or should I increase it? Bottom line is I don`t want to lose these guys and have to look for other tenants.

Your thoughts would be appreciated.

Thank you and happy Easter!

Cari-Lee

 

[Thomas Beyer]

What province is the property ? I assume BC for now.
BC has rent control so inflation + 2% (currently 3.7%) MAX is possible, whether a year lease or no lease or month-to-month.

With a great tenant keep rent slightly below what you could get otherwise, as a turnover is usually a month vacant and needs repair and the risk for a new tenant is higher.

Why do you feel greedy ?

Does Mercedes feel greedy asking $120,000 for a top-of-the-line car ?

 

[Dan_Eisenhauer]

Cari-Lee, I questioned that comment, too. I think what Mark was saying is that the initial lease is a one year term, which on the anniversary automatically becomes a month to month. I have not read my lease to determine if that is, in fact, the case. But, I assumed that is what was meant.

I will check my lease and let you know. But, you can also go on the RTO website Mark gave and check the standard BC lease.

 

[Dan_Eisenhauer]

Cari-Lee, I just checked the RTO`s standard lease. This is the wording:

Length of tenancy: (please check a, b or c and provide additional information as requested)
This tenancy is:
a) on a month-to-month basis
b) for a fixed length of time: ending on:
length of time day month year
At the end of this fixed length of time: (please check one option, i or ii)
i) the tenancy may continue on a month-to-month basis or
another fixed length of time
ii) the tenancy ends and the tenant must move out of the residential unit
If you choose this option, both the landlord and tenant must initial in the boxes
to the right.

I suggest that most Landlords and Tenants tick "A", thus making the majority of leases month to month, as Mark said.

 

[gpdu]

For 2009 in B.C, the rent incrase is 3.7% if the tenant lived there for a year. You can only increase rent once a year for the same tenant, and the rate is different each year, but it is set at inflation rate plus 2%.

Normally the lease turn to month to month automatically after lease expires, and it is hard to kick a tenant out unless he moves out himself, even legally the lease ends already.

 

[kboughen]

QUOTE (clstevens @ Apr 10 2009, 04:58 PM) should I keep their rent at the current rate or should I increase it? Bottom line is I don`t want to lose these guys and have to look for other tenants.
Cari-Lee
Hi Cari-Lee,


In my opinion, the answer to the question, "are you being greedy" depends on the rent you are charging Vs the current market rent for your property. If you are charging significantly more than other properties available with the same features and benefits as yours, it could be a bad idea to increase the rent and could be seen as being greedy.


I have a similar situation in Ontario. I have a lease expiring this summer with Tenants I would like to keep. Their current rent is at/slightly above market rent, so, I would be happy with a new one year Term at the existing rent.


In Ontario, the Term will automatically go month-month, if they do not sign a new lease. I want to avoid this as I prefer to control the Term "end date" and do not want to be looking for new tenants next February.


After discussing the tenant`s intentions with them, I found out that they intend to go month-month as they are considering getting a "bigger" place this summer. I can appreciate their needs, but would like to avoid the potential for them to stick around month-month and then leave in the winter. I decided to give them notification that the rent will be increasing by Ontario`s approved 1.8%, however, I also included a one year lease entitling them to the previous rent if they signed for a new 1 year Term by a certain date.


I plan to keep in contact with them throughout the summer with the objective of creating a win-win solution, whereby they can pay less rent (but still market rent), by making a commitment to stay until next spring/summer.


In summary, I think you should investigate to find out what the current market rent is for your property and find out the intentions of your tenants, before deciding how to proceed.

 

[clstevens]

Hi,

Please let me know if you get this email. I thought I would be getting alerts to the emails I am getting but I am not so there have been many sitting on this site waiting for me to view. Thank you for taking the time to write and to give your opinion. Much appreciated. I ask you to let me know if this works because it isn`t a straight forward reply. My cursor ended up in the middle of the page and I am not quite sure it will work.

Thanks

Cari-Lee

QUOTE (kboughen @ Apr 12 2009, 08:31 AM) Hi Cari-Lee,


In my opinion, the answer to the question, "are you being greedy" depends on the rent you are charging Vs the current market rent for your property. If you are charging significantly more than other properties available with the same features and benefits as yours, it could be a bad idea to increase the rent and could be seen as being greedy.


I have a similar situation in Ontario. I have a lease expiring this summer with Tenants I would like to keep. Their current rent is at/slightly above market rent, so, I would be happy with a new one year Term at the existing rent.


In Ontario, the Term will automatically go month-month, if they do not sign a new lease. I want to avoid this as I prefer to control the Term "end date" and do not want to be looking for new tenants next February.


After discussing the tenant`s intentions with them, I found out that they intend to go month-month as they are considering getting a "bigger" place this summer. I can appreciate their needs, but would like to avoid the potential for them to stick around month-month and then leave in the winter. I decided to give them notification that the rent will be increasing by Ontario`s approved 1.8%, however, I also included a one year lease entitling them to the previous rent if they signed for a new 1 year Term by a certain date.


I plan to keep in contact with them throughout the summer with the objective of creating a win-win solution, whereby they can pay less rent (but still market rent), by making a commitment to stay until next spring/summer.


In summary, I think you should investigate to find out what the current market rent is for your property and find out the intentions of your tenants, before deciding how to proceed.