If you are a small time landlord, you will want to read the NYT article about calculating your tenant’s rent. The takeaway is while a landlord may even live in the same house as a tenant and may know their tenant personally, they should still try to keep the rent as close as possible to the market. One owner who happened to purchase his properties years ago when prices were low, passed that savings on to his tenants if they didn’t bother him. Holding on to a good tenant is always wise.

Several years ago, I had a rental apartment on the Upper west side and charged slightly lower than the market rate to rent the apartment quickly which I did. I raised the rent when I could about 2-3% per year to stay close to market rent. Then when the rents decreased, the tenant who always paid on time and never bothered me, wanted to leave to reduce her monthly costs. I asked her how much and she said $150 and I reduced the rent. That saved me thousands of dollars to paint and also money that I would have lost due to vacancy. That tenant stayed 7 years from first lease to when I sold the same apartment.