My Buenos Aires tenant pays on time, reports problems early and looks after the property. They currently pay ARS 2,143,000, while comparable market rent appears to be around ARS 2,676,000. I value the stability, but I also do not want that gap to keep widening. Would you make a smaller predictable increase, hold the rent, or pair a review with agreed improvements? I’m interested in the practical trade-off between retention and turnover risk.
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How far below market would you keep an excellent Buenos Aires tenant?
- Thread starter teaAndPath
- Start date
I would increase it, but not all the way to market. A reliable tenant has measurable value, so retaining a deliberate discount is reasonable; allowing an accidental discount to grow indefinitely is not. Explain the comparison openly and propose a staged adjustment rather than presenting a sudden take-it-or-leave-it figure.
How did you establish ARS 2,676,000—actual recently agreed rents or advertised asking prices? Also, does the current contract already set an adjustment method? Those two details could change the answer considerably.
readsAndHearth
Homeowner
Before choosing a number, estimate one full turnover: possible vacancy, advertising or administration, cleaning, repairs, and the risk that the next tenant is less dependable. Compare that total with the annual income you would gain from closing the gap. Sometimes one vacant period consumes much of the apparent upside.
I’d also keep improvements separate from rent unless the tenant specifically wants that arrangement. Necessary maintenance should not feel conditional on accepting an increase. An optional improvement requested by the tenant is different, but the scope, timing and effect on rent should be clear.
frame.wild
Tenant planning to buy
Be careful about assuming you can introduce whichever schedule seems fair. In Argentina, the contract wording and the rules applying to its date and renewal can matter. Have the permitted adjustment method, notice requirements and timing checked locally before discussing firm figures with the tenant.
I’m less convinced that a large ongoing discount is justified solely by good behaviour. Paying reliably and caring for the home are extremely valuable, but ARS 533,000 is still a substantial gap each period. A modest retention discount makes sense; leaving the current rent untouched could make the eventual correction harder for both sides.
readsAndHearth
Homeowner
That gap should still be tested against realistic alternatives. Asking rent is not necessarily achieved rent, and a replacement may negotiate or request work before moving in. I’d use several genuinely comparable properties, adjust for condition and expenses, then run best- and worst-case vacancy scenarios rather than treating ARS 2,676,000 as guaranteed.
The distinction between asking and achieved rent is useful. I’ll recheck whether the comparables truly match the property and review the contract’s adjustment language before proposing anything. My inclination now is a clear increase that preserves some discount, with a date for the next discussion so neither side faces a surprise.
Given the tenant reports issues early, look at the maintenance history too. That behaviour may have prevented small defects becoming expensive ones, which belongs in the retention calculation even though it is hard to price. I would ask whether there are any outstanding repairs before raising optional improvements.
Plan the deposit side before contemplating replacement. Confirm how it was recorded, what condition evidence exists and how any return or deductions would be handled under the applicable agreement and local requirements. A messy exit can add time and dispute risk that a simple rent comparison misses.
Communication may decide whether the tenant stays. Lead with the fact that you value the tenancy, show how you reached the market comparison, and allow time for a response. If affordability is the issue, a smaller first step and a scheduled later review may be more workable than one large jump.
I’d put two clear options in writing after the informal conversation: a straightforward revised rent with no optional work, and an alternative only if there is a mutually wanted improvement. Avoid an open-ended promise to “review later”; state the proposed dates and terms, subject to whatever the contract and local rules permit.
readsAndHearth
Homeowner
One final caveat: don’t let fear of turnover prevent every increase. Stability has value, but so does keeping expectations reasonably aligned over time. If the evidence supports a higher rent and the process is permitted, a respectful, predictable adjustment is probably kinder than several freezes followed by an unaffordable correction.