Raising the rent for your rental properties is not the easiest task to do as a landlord. No matter how expertly you do it, your tenants probably won’t be happy with an increase in their expenses. With practice, preparation, and a little finesse, you can make the process easier.
Tip #1: Know why you’re increasing the rent
There are several reasons for raising the rent, but all are related to the fact that your property is your business. You may need to increase the amount in order to cover an increase in costs or taxes associated with the property or price changes in the rental market. Take a look at the local housing market and see if what you’re charging is competitive. Be fair to yourself and your tenants by knowing what you need to charge for your property in order to stay in business.
Tip #2: Follow the rules
Each state has its own rules regarding when and how a landlord can change the rent, so do your homework. You might be required to give written notice 30 or 60 days in advance. Pay close attention to these details when planning your communications with tenants.
Tip #3: Timing is everything
This is where a little finesse comes into play. Asking for more money around the holidays is going to be met with resistance, so December might not be the best time. If you know that your tenants are experiencing hard times, like a death in the family, then you may want to push back the increase.
If you have multiple units or an apartment complex, you could consider staggering increases. This will keep you from having to manage any negative feedback all at once. Just remember to keep Tip #2 in mind when thinking about your timing.
Tip #4: Be prepared for a reaction
You may get some strong reactions, so it’s best to have your responses ready. There is a dollar amount attached to maintaining your property and its value, so be ready to explain that to your renters.
Your tenant may want to negotiate the details and may be willing to move out if they don’t like the terms. Take that into consideration, especially if you don’t want to lose them as a tenant. Know where you’re willing to be a little flexible, and where you’re not.
It’s not a task that most landlords look forward to, but it’s necessary in order to stay competitive with the rental market. Use these tips to manage a rent increase. Analyze your rental price, know your local laws, communicate with your tenants, and keep your business going.