Raising the rent can often be difficult for landlords to do, but it’s also sometimes necessary. However, there are ways to raise the rent that can keep you in business and keep your tenants happy too!
Raise the rent incrementally every year.
If you raise the rent little by little every year, you can maintain the value of your property. In addition, your tenants will most likely be less angry if the payment is increased by small amounts instead of one large amount all at once.
*Bonus tip: You can even include this in your lease so your renters will expect it each year.
Add value to your rental.
By adding value to your property, you are able to fully justify a rent increase that even your tenants can agree on. Consider installing solar panels to your property or hiring a maintenance staff to help better assist your tenants with issues that may arise.
You can also do small things, such as installing new appliances or updating the paint job. Your renters will appreciate these efforts and find value in paying extra when small changes are made. In addition, you will have more money in the long run by increasing the rent and spending money on a one-time additional cost that will add value to your property.
Another small change that will lead to increased tenant satisfaction, is to start accepting rent payments online. This provides a convenient option that saves both you and your tenant time. They’ll no longer have to worry about getting cashier’s checks or money orders and mailing them to you or scheduling a time to meet.
Try to reduce turnover as much as possible!
Turnovers are going to cost more a lot more money in the long run, so do what you can to keep great tenants. When it comes to increasing the rent, sometimes it may be better to negotiate down from the original price you had in mind, to something that may be more manageable.
You can also negotiate with tenants by deciding not to raise the rent, and instead, having them commit to a longer lease. This way you can be sure that your property will stay occupied.
Try not to increase the rent more than 5%
If you can help it, try and increase the rent in smaller amounts. Pricing is one of the most important things to a renter. If the rent increases to the point where they can’t afford to pay it, they will move out. So make sure to keep that in mind when deciding how much to raise your rent prices.
Remember, at the end of the day, it’s still a business
Other businesses and companies raise their prices all of the time! It’s just the way business is done so a profit can be made. Raising the rent is sometimes essential in order to keep the value of your property intact. You always want to make sure that you are raising the rent to match the property values around you.
Bonus: Consider the fact that you may not be able to raise the rent at all.
If you live in a rent controlled area or have stated specifically in your lease that the rent will not increase, then you will have to hold off. Be sure to check in on the local laws of your area before you consider raising the rent.
Although raising your rent can sometimes feel awkward, it is important to remember that you are running a business and you need to maintain the value of your properties. However, planning it out in advance and alerting your tenants can make the process much more manageable.