More Money Please
At the end of the day property management is all about the numbers. It can be difficult at times to raise rent with a resident is looking to renew. However, it is a necessity in order for the property to be successful. The property I am working at now is budgeted for $27-$31 increases for the renewals we are working on for the next couple of months. We tend to start out by stating that we are going to raise the rent by $60 so we have some negotiation room to retain the current resident while still meeting our budgeted amount. Our leasing agents were presenting the renewals as if they were negotiable, saying things like, “let me know if this works for you or not, if not we will see what we can do to get the price knocked down a little bit.” Who wouldn’t try and negotiate for the lowest possible rent increase if they knew it was an option? I certainly would. However, I found a different approach that is proven to be very successful thus far and have renewed several leases with a $60 renewal, double our budgeted amount. I do my research on the resident’s apartment and see how far under market rent they are. If they are $195 under market rent I blatantly tell them that so they are aware of the fact that if they move out and someone else rents that apartment we will be making more money on that unit. Then I say of course we will not raise your rent by that much, rather we will only increase your rent by $60. This way they understand better why we have a rent increase in the first place and are more willing to pay the $60 because they still feel as though they are getting a good deal.