For many landlords, it is oftentimes a difficult and challenging situation to handle rent increase with their tenants. Over time, a good healthy tenant-landlord relationship develops which may become a reason for many property owners to hesitate in increasing the rent when a raise is due. Real Property Management Associates understands that many landlords find it hard to notify a tenant that the rent is going to be increased. However, rent increases are a necessary part of owning an investment property.
Here are a few pointers that will help you determine how and when to increase your rent:
- Use a rental database to check similar properties with similar amenities in the area.
- If there is no database, use the rental websites (there are numerous).
- Use the average rental increase that is published in your area. Example: last year average increase was 4%, rent is $1300 x 1.04 = $1352.00, rent increase can be $50/mo. (As a leading property management company, we’ve witnessed that generally, rents of $50 or less have little resistance.)
- Give proper notice to your tenant (as outline in the lease). If Housing Assistance is involved, they may have a mandatory advanced notice period, give them a call.
- Negotiate with your long-term tenants. (Maybe $50/mo. with a two-year lease is better.) Remember, long-term residents that respect the property are the best renters.
- Be consistent. It is better to increase smaller amounts every year than to have a big increase every three years. Our property managers know that a smaller increase adjusts well with tenants’ household budget in contrast to a sudden spike after three years.
- Don’t be evasive. Be cordial and be responsive. Let them know you care about the property and them being happy there. It builds trust and earns you loyal tenants.
- Maintain the property. Do a property review at least once a year. Make an annual budget to do needed repairs and improvements. It will benefit your tenant in the short term and you, in the long run.
The best scenarios will results in more rent while keeping happy tenants. For more information, call Real Property Management Associates at (508) 534-8044.