It’s almost spring and if you are a landlord then the question about when the right time to raise the rent on your property may be on your mind. We have heard how strong the rental market is in the Front Range, but how does that translate into what we do about our rental property? As a landlord, when is it the right time to raise the rent?
The general rule is that is if you have a good tenant then do not raise the rent. If they pay you on time and keep the house in decent condition then think twice before raising the rent. The biggest issue is this: Return On Investment [ROI]. If you raise the rent and the tenant moves out you then incur expenses to re-list the property such as make repairs so it can be shown and advertising the property. The cost of a transition can be large, but as a landlord my biggest concern is always losing a month’s rent.
A. Keeping your tenant at the same rent
If you currently rent your property for $1,200/month then your income is $14,400/year. If you like the tenant and they are easy to work with, pay rent on time, etc. then they may be worth keeping.
B. Raising the rent and losing your current tenant
If you raise the rent by $100 to $1,300/month you may lose your tenant. If you lose a month’s rent in the transition period, your annual income is $14,300. Not a huge difference from example A, but then you are dealing with a new tenant and not increasing your bottom line. Ultimately your ROI is down.
Maybe there is a way to create a win-win. Could the tenant take on additional responsibilities that are costing you now? Maybe they can mow the lawn, make some small repairs, etc… Many tenants are willing to do extra to ensure their rent does not increase. Either way, make sure you put all communications in writing including an increase in rent and give at least 30 days notice or more if you can. This will ultimately depend on how your lease is written and the laws in your area.
For details on how to handle landlord-tenant issues in the City of Boulder you can refer to the City of Boulder’s Landlord-Tenant Handbook.
The same folks who brought us the Walk Score, which tells you just how walkable any given property is, have now brought us the Bike Score. If you are in the market for a rental, and you like to bike, then Bike Score is a great way to see how truly bikeable your prospective neighborhood will be.
Bike Score takes into account many factors when determining the bike-ability of a location: bike infrastructure, topography, and the number of cyclists on the streets. In a state that loves bikes Bike Score offers many opportunities to learn just a bit more about your location.
Not all cities are included at this point on Bike Score, but Boulder made it in. As you may have guessed it scored high with an 86 out of 100 giving it a listing of Very Bikeable. Hopefully we will see this service expand into other smaller cities and the larger ones too.
To learn more about Bike Score click on the link. To get detailed information on Boulder’s bikeability click here. To learn about the parent company, Walk Score, click here.
SmartRegs, adopted by the City of Boulder 9/21/2010, are here to stay and they impact all property owners. The new rules require that all rental properties in the City must pass a SmartRegs Inspection before the end of 2018. If your rental property does not pass an inspection before the end of 2018, you will not be able to receive or renew a rental license at the start of 2019 and beyond. Meeting SmartRegs requirements are mandatory so property owners take note, it may be time to take action!
FAQ’s from the SmartRegs website:
Am I obligated to make upgrades to the rental after the inspection?
If your rental does not pass the inspection, then upgrades will be required so that the rental passes a follow-up inspection. The free EnergySmart Advisor is provided to assist you with upgrade decisions and contractor selection once you are ready to pursue the recommended upgrades.
Do I have to make all of the upgrades if the rental does not pass an inspection?
Not necessarily. Enough upgrades have to be made so that you reach 100 points during the next inspection. For example, if the rental scores 80 initially, then you must complete enough upgrades to receive 20 more points. A free EnergySmart Advisor can assist you with figuring out which upgrades to make so its as cost-effective as possible.
How much does the SmartRegs Inspection cost?
The SmartRegs Inspectors, partnering with EnergySmart, have agreed to charge $120 per rental inspection. An EnergySmart Advisor is provided free of cost.
In the City of Boulder, compliance with SmartRegs is mandatory by 2019. This puts some pressure on property owners to implement energy saving measures. SmartRegs will reduce our energy impact, but this does not come without cost. There are some rebates available through the City of Boulder and City of Longmont for energy efficiency upgrades. For more information click here. You can also call the SmartRegs office for more detailed information at 303-441-1880.