As any landlord or property management company can tell you, the demand for rental property has never been higher and is expected to continue growing in the future. With such a significant increase in demand comes the ability to increase rents. It might seem that raising the rents on your property should be easy to do, but like most things in life nothing is ever as easy as it should be. Here are some tips to help you successfully and legally raise your rents.
Know Your Market
Before you jump in and start raising your rents, you need to know if the market where your rental properties sit is already seeing an increase in rents. To put things simply, if the rents where you own property have been skyrocketing, it’s a good sign you should be able to raise the rents. On the other hand, if they have remained steady, trying to raise your rent may result in a vacant property.
Assuming you find that rents in the area have been on the rise, you can’t suddenly instantly raise the rent on your tenants. There is this little thing called a lease. Hopefully, you are using a written contract. As long as the lease is in effect, you can’t do anything about raising the rent. But what you can do, is start working with your tenant to let them know their rent will be going up at the end of the lease term.
Know Your Local Laws
If you have decided to raise the rent, you need to make sure you are fully aware of your local laws have to say about doing so. You may find that the lawsvary significantly from one city to another.
- Notice– In most cases when your tenants are on a month-to-month lease, you are only required to give your tenant’s thirty days’ notice. But many require up to 90 days’ notice, so be sure you check your local laws.
- Delivery of Notice– You need to know what the laws have to say about how you must deliver the notice of the rental Look for whether you can text, call, or if you must send your tenant a certified letter.
- Amount of Increase– In areas that are designated “rent control zones” you may not be allowed to raise the rent at all. In some jurisdictions, you can only raise rents by a set percentage and so many times within a year. Knowing the laws covering these points is vital to your being able to successfully and legally raise the rents.
Tips for a Successful Rent Increase
If you finally decide to raise the rents on your properties,here area few things you can do to make the increase a little easier for your tenants to swallow.
- Notice– No matter what your local laws have to say on the subject of rent increase notice, give your tenants as much notice as you can, 60 days or longer is best. This will give them time to get used to the idea and decide if they are going to stay or move.
- Written Notice– No matter what your local laws say, raising the rent by phone or text is tacky. Send or present your tenantswitha written notice and add a copy to the lease.
- Only During Turnover–One way to get past the idea of raising rents is to do so onlyas each unit turns over.
- A Few Improvements– It doesn’t have to be anything big, maybe paint the outside of the house, a new appliance or two, anything that appears to add value to the unit and help justify the increase in rent to your tenants.