Good tenants are hard to find. So, once you find them, you want to keep them. But when it comes time to renew the lease – do you raise the rent? How do you know if your rent increase will result in the tenant looking to reside elsewhere?
If you want to keep your tenant and raise the rent, we’ve got some tips for you that you will not want to miss.
Small annual increases
A tenant who suddenly encounters a rent increase of $100 or more monthly may consider moving when the lease expires. However, a tenant with a rent rate hike of $20.00 may find that the hassle of securing a new rental, combined with packing and moving may not be worth it and agree to paying the increase.
If you want to keep your good tenant, you want to increase the rent a small amount each year. Over time, this adds up. But by presenting it to your tenant little by little, it is less of a shock to the financials.
Communication is key. Don’t just drop off a note, send a text, or send an email that the rent is going to be increased. Verbally speak to your tenant. When doing so, you should advise of the minor increase in rent and see how he or she is enjoying the residence. Discuss any potential upgrades, changes, or concerns that your tenant may have about the property.
If your tenant knows that you are open and receptive, as well as responsive to requests or concerns, he or she will be more likely to not flinch with a rent increase. Just as good tenants are hard to find, so are good landlords.
Give advanced notice
Shocking a tenant into paying your rent increase when their rent is due is not the most professional way to handle business. Even more, it can lead you down a road of missed rent payments or even the loss of a tenant. Instead, give notice in advance.
Advise your tenant how much the rent is increasing and when the increase will take place. This is best done verbally, reflecting your caring attitude toward the tenant. To cover any legal obligation, be sure to follow up the conversation in writing.
Just like everyone else, your tenants have financial responsibilities. They may need to plan their spending to account for the higher rent payment. However, they cannot do this if they aren’t made aware in advance.
It is important to know that you do not have to explain your reasons for raising the rent. Many landlords feel bad increasing the rent and feel they need to justify why. You are under no obligation for explaining why the rent is increasing. Just make sure you follow all legal procedures (including those stated in the lease) and make yourself aware of all governing laws surrounding this topic.
If done the right way, you absolutely can raise the rent due on your rental property and keep your tenant!
Marina Shlomov, a managing partner at ALH|Podland Rental Homes Property Management is the author of many articles on Landlording, Property Management, and Real Estate Investing. A residential builder in the state of Georgia since 1999 and a property manager, Marina is an investor herself. Her property management company is intended “For Investors” and “By Investors” for a simple reason – she knows what investors’ goals are and she works hard to reach their goals. In her spare time, Marina likes to spend time with her family, friends, garden, read and travel. Check her out atwww.alhpodland.com.
You can find Marina’s articles and comments at @rentalhomesatl on Twitter, on Facebook, Google+, Blogger. and YouTube.