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How to Write a Rent Increase Letter

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Marina Shlomov - Tuesday, April 6, 2021

As your tenant’s lease is approaching its end, it is time to reach out to see if they would like to renew. And, assuming that things are well, there is a good chance that your tenants will sign a new lease and stay put – especially if the lease terms remain the same – including the rent amount. Ideally, this is a surefire way to keep tenants. 

What if you find that your rental price is lower than market value and you’d like to increase it? Will it push your tenants away and leave you with a vacancy to fill? 

You can raise your rent. You have every right to do so. But, if you’d like to keep your current tenants, you should consider increasing the rent by no more than 3% to 5%. Approach this rental increase in writing – and do so warmly. 

Remember, communication is key. If you blindside your tenants with a notice of significant rent increase without any warning or explanation, you may risk losing that tenant. However, if you keep the lines of communication open and make it understandable, your tenants will feel more appreciated and will likely be more considerate and empathetic of the situation. 

Your rent letter should be addressed to the tenant by name, rather than addressing it generically as Dear Tenant. And, if you are including a subject line, consider using a phrase such as Change in Rental Terms or Renewal of Lease Terms. It seems like you would want to notate it as exactly what it is – a Rent Increase Notice – but doing so puts your tenant on the defense before the letter has even been read. This is a bad way to start. 

Start your letter by thanking your tenant and showing appreciation. And, throughout the letter, let them know that you are available to talk or discuss the notice. Make sure this is clear – and that you are not looking to abandon them in some way. Then, close your letter with a warm, personable signature, such as Sincerely, Very Truly, or All the Best. 

You are not required to explain why you are increasing the rent. However, sometimes providing a brief explanation as to the need, could lead to more understanding. Maybe it is because of new local fees or taxes. Maybe it is for repairs and improvements to the property. Or maybe there is a rise in cost for the conveniences and amenities that your tenants appreciate. Whatever it is, providing this bit of extra info makes it seem less like a generic demand for more money. 

Don’t forget to include this important information in your letter: 

  • The tenant’s name 
  • The property address
  • Your name and contact information 
  • Date the letter
  • Date when rent increase goes into effect
  • Current rental fee
  • Increase rental fee

Well, there you have it. Everything you need for increasing the rent at your rental property. The more human, sympathetic, and approachable you are, the more likely your tenants will understand and agree to the increase.

Marina-Shlomov-Photo-ThumbnailMarina 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, 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 You can find Marina’s articles and comments at @rentalhomesatl on Twitter, on Facebook, Google+, Blogger. and YouTube, Bigger Pockets and REI CLub and LinkedIn.

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