If you’re among those landlords who already have an ironclad rent increase process set up, congratulations. However, if you have been worried about how to raise rents for tenants, keep on scrolling through to understand how you can manage this process.
Before all-out raising your rent, you should first conduct some market research and check to see the average rent in your community. Setting your rent too high will naturally result in tenant complaints, and this could mean losing quality tenants to your competitors.
For this reason, your first step should be to assess the market rate in your area, researching rental advertisements or by delegating this job to property managers.
When Should You Raise Rent?
In the majority of cases, your lease agreement or state law dictates when and how you should communicate rent increases to your tenants. Most jurisdictions require landlords to give tenants a 30-days notice before implementing an increase in rent.
To avoid complaints, we recommend that you reach out to your tenants at least 90-days before their lease expires to let them know that rent will increase when their lease is renewed. This gives tenants ample time to prepare for the increase and adjust their budget accordingly.
How to Inform Them About the Increase
Professional and clear communication goes a long way in reducing conflicts with tenants over increases. Written notifications are perhaps the best way to inform tenants of an increase and is often also a requirement set by your lease agreement or local law.
While providing written communication you should:
- Touch over all the relevant information while avoiding confusion over the fact that a rent increase is imminent. Provide details on when it is going to be put into effect.
- Try to reference the amount each tenant was paying and when they started paying it.
- Shorten the message as much as possible so that there is no room for negotiation or complaints.
You can also use your written rent increase notice to remind your tenants about late fees or payment policies, even if they have been clearly stated in their lease agreement.
How to Deal With Complaints
The more your tenants are satisfied with the general living standards in their rental unit, the less likely they are to complain about small increases in rent. It is also highly likely that they have received a wage increase and will understand that expenses have gone up in your rental property as well.
If your tenants complain that the increase is too much, you should take some time out to inform them about the average rate in the market. If you did your research on the market rate, you will also know what the average rent is like in your neighborhood. If you're increasing your rent to a value that is more uniform with the average among similar units, your tenants will withdraw their complaints and understand your decision.
If they simply question, “Why do you need the rent increase?”, you should professionally explain that the expenses of the property are steadily increasing. These costs may include insurance premiums, property taxes, utilities, and maintenance costs.
Additionally, you can remind your tenants that these small increases will also help keep the property well maintained and may benefit them in the future.
Final Words
Voila! You’ve learned how to raise rents without getting complaints and it's time for you to start researching the average rent in your neighborhood. However, if you are having trouble taking out some time to do the necessary work, you can always delegate these tasks to your property manager.
If you haven’t hired a property manager already, click here to learn more about our services and how an experienced property manager can share some of your burdens.
