You're in the Landlord Business, and today's question is when and how should we raise the rent? When our property is vacant, this is an easy question to answer. We go out and do our research. What are comparable properties available? We know that this can change even just from season to season. And then we want to make an offering that presents a good value to our tenant. We sign up a good tenant and in a good property, and we want them to feel like they've got a good value and they enjoy living in this home and will stay put.
When our property is occupied the dilemma is a lot tougher, and we have two factors that are a little bit at odds and we just cannot ignore either one. First of all, vacancy is the most expensive event for any landlord. It costs us more than just that month between tenants, that time to advertise and place a new tenant. But we also have to spend money on the property, now. We have to clean everything. We probably have to repaint rooms that didn't need repainting, and maybe replace a select carpet or two, because we have to make the property ready to compete in the marketplace for a new customer.
On the other hand, we also have to realize that virtually all expenses are increasing constantly. Our tax bill this year is more than last year. Our insurance went up again this year over last year. Even a gallon of paint or the hammer we buy at Home Depot. The labor for every worker that helps us is going to cost more than it cost a year ago. If we're not getting a slight increase in rent, we're actually taking a reduced profit, or reduced cashflow off of our property.
Can't tell you what to do but I will share our techniques with you. We try to be customer friendly, and we offer longterm leases so that our tenant, if they want to opt to commit for 24 months, can lock in a rental rate. It will not change for 24 months. Other than that, with few exceptions, we intend to raise the rent at each lease renewal.
We have to keep up with operating costs, like we just discussed. And again, I can't specify what that increase ought to be, but 5% probably is a good minimum and 10% may be pushing the line, and you just have to decide for yourself how fair you want to be, and what you think is fair.
We combine this, this time of a rental increase in a new agreement with a visit to the property. And this is proactive on our part ,and we actually want to go looking for maintenance needs that we might need to address. Things the tenant probably hasn't even reported. It's a good time to do it, and it's a goodwill gesture and shows them that we're interested in keeping their home in good repair.
Finally, let me share with you what I consider the big folly we've all been guilty of. We have the good tenant, the tenant who never calls in and complains. It never reports any maintenance need, pays the rent like clockwork. And when the lease renewal comes around, we're inclined to leave well enough alone and leave the rent where it was. And of course we have to examine what is the effect of this. We forego that little 5% increase, which may be $40 a month, which may be $300 or $400 or $500 a year. And of course after five, six, seven years of this leaving well enough alone, we've not only left the $3,000 or $4,000 or $5,000 on the table that we needed to do our deferred maintenance, but now we've got a person in our property renting for $800 when they should be renting for who knows, $1,100 or $1,200.
We've also allowed everything to build up and all this deferred maintenance to accumulate. Our tenant moves out after seven years, they haven't been reporting anything and we go in and of course the carpet is wore out. Everything has to be repainted. The leak we didn't know about has festered and caused damage. And not only are we looking at the dollars and dollars in dollars of all the deferred maintenance, we're also looking at three or four months instead of two or three weeks to turn our property around. And we're kicking ourselves for letting it go so long and never raising the rent.
