My landlord recently raised the rent. Instead of paying $850, I'll now be paying $950 a month - a nearly 12 percent increase and an extra $100 I'm not willing to spend. As a property manager myself, I know rent increases are necessary sometimes - especially if the rental was under rented to begin with. Unfortunately, as a property manager, I also know this increase isn't necessary and my landlord will be losing a tenant soon.
But it doesn't have to always be that way. You can raise the rent without losing good or long term tenants. Here is how to pull it off.
Keep Increases Small
Keep your rental increases under 10 percent. In my case, 2 percent more may not seem like a lot to you, but it felt like a lot to me (the renter.) If my landlord had only raised the rent by 9 percent, I would have happily stayed on. Tenants need to feel like they're not getting gouged on an increase.
If you absolutely have to raise the rent higher than 10 percent, be prepared to lose a tenant or two. While the hassle isn't something to look forward to, you can rent the apartment at the new rate to someone else and make the income you need.
Give Tenants Warning
First, you need to understand landlord and tenant laws. You can only raise the rent at the end of a lease term, not during a current one. However, if your tenant is living in your property month to month, you can raise the rent at any time with proper notice. In most states, proper notice is a 30-day written notification clearly stating the new rate terms.
If you plan to raise the rent, tell your tenants early. Most tenants won't like the shock of simply finding a higher rate listed on a new lease agreement. If you wait until then to tell the tenant you're raising the cost, they may be insulted enough to cancel the deal and find a new rental.
Be Willing to Negotiate
Be willing to negotiate rent increases with good tenants. For example, if you have a great tenant who suddenly wants to move out after a rental increase notice, don't hesitate to call them and see if you can work out a better solution. If the tenant says he can only pay another $50 a month, not $75, take it in to consideration. After all, good tenants can be hard to come by.
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