Would you rather have a high-turnover unit at market rate or a 5-year tenant below market?

Landlord Questions
1

At what point does the stability of a long-term tenant become more valuable than a rent increase? Our latest research shows a significant trend in tenant behavior: 36.1% of landlords report that their tenants are staying in their properties longer than in previous years. That is nearly five times the number of owners reporting shorter stays.

With so many tenants staying put, I’m curious how this group weighs the trade-off between maximizing monthly rent and keeping a reliable tenant. Do you prioritize keeping your rent at the absolute market ceiling, even if it might lead to a turnover every year? Or do you find that avoiding the costs of cleaning, listing, and screening makes it worth keeping a trusted tenant at a slightly lower rate for several years?

How do you calculate whether the “stability” of a long-term renter is worth more than a potential rent hike?

2

I think if you push the rent ceiling first of all, you’d better have a turnkey property. Second, your pool of applicants is probably very small; therefore, landlords tend to cut corners during the screening process just to fill the unit. That increases your risk, or it would keep your property empty longer, costing you money. A rent increase does not have to push the envelope; it should simply reflect the increase in the property’s operational costs. So by this modus operandi, the stability of a long-term tenant shouldn’t become more or less valuable than a rent increase. It should be priced fairly for financial stability.

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