Landlord’s Guide To Upping The Rent | Temecula Property Management
As a landlord, receiving rent checks in the mail is a definite perk of the job. However, dealing with late rent, missed rent and other awkward scenarios that revolve around collecting the rent can be a hassle. This also goes for raising the rent. It’s kind of like asking your boss for a raise: you’re confident you deserve it, it’s not completely unreasonable, it’s necessary but it’s still a tough conversation to have. It’s best to have a property management company handle these details. Here are 7 things to consider when raising the rent of your tenants on your own.
Give tenants notice
If you already know that there will be a rent increase in the future, let the tenants know. Put this in the rental agreement upfront and let them know the plan for future rent increases so they aren’t blind sighted when it starts happening. It also gives them plenty of notice to make sure their finances are in order before the increases happen.
At least 30 days prior to the increase send the tenants a formal notification letting them know that, as discussed when they signed the lease, the rent will be increased starting next month. The more open and honest you can be, the fewer issues you’ll have collecting rent. As a Temecula Property Management company Benefit National can help you reach out to the tenants in regard to such increases.
Raise rent gradually
Most tenants who have rented before will expect a small increase in rent over time. Renters who have been paying the same amount for years and years will find it hard to adjust to a large increase all at once. According to a local Temecula Property Manager a small increase over the course of a few years will make the changes more manageable for everyone.
Don’t over explain why you’re increasing the rent
You don’t have to give the tenants a sob story about your finances and why you need to up the rent or provide them with any personal details or reasons as to why there is a change in the rent. As the landlord, you have the right to charge what you think is fair, and they have a right to leave if they don’t agree. However, it is important to expect negative feedback and have honest and legitimate reasons for raising the rent. If the increased rent will mean better accommodations/services/amenities for your tenants, let them know. If you’re raising rent because of rising taxes, let them know. You can give them honesty without giving them too much information.
Access the market for current market rents
The fear most landlords have about increasing the rent is scaring tenants away resulting in an empty home. Before you make any decisions, check out what other rentals in the area are going for. If your rent is higher, do you have extra services or amenities to justify the difference? What is the demand like in your area for rentals?
Know the laws regarding rent increases
You can’t raise the rent because you simply don’t like the tenants, or for any other discriminatory reasons. Landlords that raise the rent in retaliation for something a renter did (forming a tenants right group to challenge management, reporting building code violations, etc.) find themselves in a messy legal situation. Even if the raised rent only SEEMS to be a result of discrimination or retaliation, the courts tend to rule in favor of the renter. Know the rules, know the laws, and maintain a professional business relationship in order to avoid legal trouble.
Advice From Landlords Who’ve Raised Rents
“When we raise the rent, we send a letter listing the top comparable rental rates in the area, cross it out and put our lower amount there next to our initials. This shows the renter what the rate could and should be, but that as landlords, we are doing our best to keep costs down” Joe, Houston TX
“Every time we raise the rent, we offer a service for the property (that we were planning on doing anyway) as a small gesture to the renter. We will have a landscaper come by and do some work on the exterior or purchase a new mailbox. The timing of the improvement with the rent increase tends to diffuse any negative feedback from renters.” – Becky, Nashville TN
You have the right to make money from your investment property, that is why you got into this whole landlord thing in the first place, right? Connecting with your renters is a major way to make upping the rent a smooth and easy transition. Focusing on the renter, their family, and their situation instead of just their contribution to your bank account can make all issues regarding rent a little more personal and a lot less awkward. Timing is key, and establishing that human connection can make all the difference.