Nobody likes a landlord who raises rents, but sometimes, it is both inevitable and necessary. Simply put, landlords who haven’t increased the rent of their rental property for the last two years, would be losing an average of $600 in loss revenues per year. Increasing your rental rate can be very stressful, but not doing so is just leaving money on the table.
Here are some tips to raise rent while keeping legal and ethical compunctions:
Follow Your Local Rent Control Laws
- If you’re living in an area where rent control laws are in effect, then you might not be able to raise your rent significantly. It is important that you check your local ordinances about the city or state’s fair rent policies to save your self from trouble. To check whether your area is under rent control laws, click here.
Make a Fair Increase
- If your rental is not under rent control, raising the rent should be both equal and fair. Property owners who raise their rate over and above market rates are risking themselves to potential lawsuits. Take some time deciding what the rent needs to be, then apply that rate across the board to all your rentals.
Study The Market
- One of the many things you can do to effectively raise rent, even in a controlled region, is to conduct your own market research first. Know how other landlords are charging their tenants. You can do this by going to Craigslist and doing a similar property search within your area. Of course, you have to compare properties across many different factors, such square footage of the rental, whether the unit has been remodeled, available amenities, or location. Your rate should adhere with these factors so you can justify your decision to your existing tenants.
Wait Until The Lease Contract Expires
- Most states in the United States (and most rental agreements) keep landlords from raising the rent for their property before the end of the leasing term. The best time to implement your raise in rent is by the end of the lease. This will give tenants a good time to decide whether to stay in your place, or vacate and find a better deal.
Give Your Tenants Proper Notice
- Your tenants have all the right in the world to know about your plans of increasing the renting rate. Therefore, make sure you give them at lease 30-day notice for the increase. Draft an increase in rent notification letter and mail it to the tenant.