Want to raise rent? Without losing residents?

Want to raise rent? Without losing residents?

It’s been a while since you have raised the rent, and you are considering now might be the right time? Here are a few items to consider:

•    In the surrounding areas, how many units are vacant? Is your area in demand? Will it be easy for your resident to find another unit? Doing your homework will help you determine if your resident can easily find another unit, and for you to find another resident.

•    What is the current market value? The question here is what are the available units in your surrounding area? What is the average rent with your similar amenities? Compare, analyze, and offer a fair increase, and use your best discretion as no resident is going to accept a dramatic rent increase.

•    Can my residents afford an increase? 

Check your local and state laws:

•    Is there a rental cap amount in place?
•    Am I prohibited from increasing rent?
•    What percentage or dollar amount increase am I allowed?

Perhaps one of the easiest reasons for increasing the rent: You’ve made considerable upgrades that your tenants now enjoy. But what if you haven’t made any improvement? Be prepared as it could be possible your resident may ask for specific upgrades to happen before they agree to an increase.

If your lease doesn’t mention a rent increase it should be included. First, so your residents are not caught off guard and secondly, the increase is not unexpected. 

It is common to be fearful when asking for a rent increase, especially to your long-term residents, however, when your investment returns become diminished, it is time to increase your profits.

You have done your homework and have decided to talk to the resident about raising the rent. Okay, now it’s time to have the conversation with the resident 45 to 60 days before the lease termination date and be prepared by knowing how far you are willing to compromise. Meaning, are you willing to do some upgrades to the unit per their request, or negotiate the amount of your increase?
Knowing where you are comfortable with these questions ahead of time will help. 

Being an organized landlord, easy to work with landlord, and someone who cares for their residents, usually makes for a happy relationship between you and your resident. 

Let Ultimate Property Management be your partner today…understanding that our work is your life, your dreams, and we will deliver only excellence and aim to exceed your expectations.

This article is not intended to be exhaustive or a substitute for qualified legal advice. Laws and statutes are always subject to change and may vary by county or city. You are responsible for performing your research and complying with all laws applicable to your unique situation.