How much below market is worth accepting for a reliable tenant?

[shareTheSignal]

I have a strong tenant in a small multifamily near Buenos Aires: rent arrives on time, problems are reported early, and the home is cared for. They pay ARS 4,485,000, while comparable market rent appears to be around ARS 5,020,000.

I do not want that gap to keep widening, but vacancy, turnover work and an unknown replacement tenant all carry costs. Would you propose a modest predictable increase, hold the rent, or combine an increase with agreed improvements? Recent completed renewals or relets near Buenos Aires would be more useful than advertised headline figures.

 

[sam_page]

I would propose a staged move rather than jumping straight to ARS 5,020,000. Something around ARS 4,750,000 would recover roughly half the current gap while preserving a meaningful discount for reliability. Set a clear future review date, subject to the contract and applicable notice requirements, so neither side gets a surprise.

 

[SmallEcho]

How was ARS 5,020,000 established? Asking prices are not necessarily completed rents. I would want comparables with similar condition, size, expenses and location, plus their dates. Also estimate realistic vacancy time and preparation costs. Without those details, the apparent ARS 535,000 gap may overstate what changing tenants would actually earn.

 

[teaAndPath]

I would not automatically split the difference. If these are monthly figures, one month vacant at the proposed market rent would equal more than nine months of the current ARS 535,000 gap, before painting, advertising or repairs. That does not mean never increasing rent; it means retention has a value you can calculate.

 

[teaAndPath]

One addition to that calculation: include the tenant’s maintenance history. Early reporting can prevent a small issue becoming expensive, although routine owner responsibilities should not be presented as a favour. For a possible turnover, also map out inspection, deposit handling and the time needed to ready the unit under the agreement and current local rules.

 

[RoundPebble]

A moderate increase can still trigger a move, so I would first ask what matters to the tenant. Predictability may be worth more to them than a freeze followed by a larger adjustment. Improvements can be discussed, but I would separate optional upgrades from maintenance that already needs doing.

 

[luca.brooks]

The conversation could be simple: explain that the apparent market level is ARS 5,020,000, acknowledge the tenant’s reliability, and propose ARS 4,750,000 from the earliest date allowed by the contract. Include the length of time that amount would remain in place and how the next review will work. That is more useful than merely saying the new rent remains below market.

 

[RoundPebble]

I agree with giving a date and a number, but I would not present ARS 5,020,000 as settled until the comparables are tested. Better to say it is the current estimate and invite a response. If the tenant counters with a longer commitment at a lower amount, that may improve the vacancy calculation considerably.

 

[plantsAndCairn]

Before sending any proposal, read the existing adjustment clause and confirm the notice method and timing that apply to this particular Buenos Aires tenancy. These points can depend on the agreement and the rules in force at the relevant date. Check separately whether a rent change affects how the existing deposit must be documented or handled rather than assuming it adjusts automatically.

 

[plantsAndCairn]

I would put the decision on one page: current rent, supported comparable rents, proposed rent, review date, expected vacancy period, turnover costs and any planned work. Then calculate the outcome if the tenant stays versus leaving. It makes clear whether ARS 5,020,000 is a genuine net opportunity or just a higher advertised figure.

 

[ames.march]

The balanced route seems to be: verify completed comparables, confirm the contract and local requirements, estimate the full cost of one turnover, then offer a measured increase with a defined review date. If ARS 4,750,000 still produces a better risk-adjusted result than pursuing ARS 5,020,000 from an unknown tenant, the discount is purchasing stability rather than simply leaving money behind.