No tenant enjoys a rent increase. In fact, it’s something most tenants dread. Thankfully, if you handle the process professionally, you can help your tenants prepare and accept the changes with ease.
Consider annual increases
One of the biggest mistakes that landlords make is waiting for several years to increase rent prices. If you aren’t regularly monitoring the competition, this can lead to a major increase, and in turn, sticker shock from tenants.
Your tenants will be surprised if a rent increase comes out of nowhere. This is especially true if the increase is 8% or more.
As a landlord, you may want to consider increasing rent on an annual basis. This way tenants learn to expect it and there isn’t a big surprise. Typical rent increases range from 3-5%. If you plan on increasing rent regularly, make sure to include this information in your lease. That way, tenants know exactly what to expect.
Give tenants plenty of notice
As the lease gets closer to ending, tenants will learn to expect a letter to let them know about the increase. Even though they may learn to expect it, you still want to give them plenty of time. Most states have laws that require landlords to give tenants notice at least 30 days prior. But consider aiming for closer to 60 days. This gives your tenants plenty of time to decide whether they want to stay or leave.
When you write the letter, make sure that you’re kind and professional. Provide specifics about when the rent will increase and how long they have to let you know whether they agree to the new rent or if they will be moving out. Give a personal touch to the letter by addressing it in the tenant’s name.
It’s also a good idea to follow up with your tenant over the phone to ensure they received the letter. Don’t initiate the call by getting straight to the point. Start with some small talk before getting to the rent increase. You want to show warmth in conversations with your tenants.
Include detailed information
Every rental increase letter should include some specific information like the date, your name, the address where the tenant resides and their name. The letter should also include specifics about when the increase will take effect and how long the tenants have to make a decision.
You’ll also want to explain why you’re raising the rent. That way your tenants understand where you’re coming from. A rent increase letter isn’t just a way of providing an alert. It also serves as proof that you’ve notified the tenant in case of any potential disagreements.
Utilize strategies to hold on to good tenants
If you’re hoping to hold on to tenants, you could consider some other options. For example, you could keep the rental increase to a minimum to reduce the chance that your tenants will go looking elsewhere. Other options include waiving the increase if it’s unnecessary or waiting to increase the rent for a set amount of time.
Treat tenants well throughout the year
We know that vacancies are costly for landlords. So, when it comes to increasing the rent, it can feel like stepping on eggshells. You want to increase the rent but don’t want to lose your tenants. As mentioned above, if tenants come to expect these annual increases and the increases are reasonable, it can be easier to keep tenants you like. Another way to help ensure your tenants decide to stay is to treat them well throughout the year.
Tenants are more likely to stick around if their property is well-maintained and if all of their interactions with you are professional and warm. Tenants want to feel like their landlord cares for their well-being and wants what’s best for them. When a tenant feels this way about their landlord, they’ll know the landlord is initiating this rental increase for good reason and not just to line their pockets.
Your tenants will assume the best about you, because they’ve seen you in action, making their needs a priority. One creative way you can help your tenants feel heard is to put out a questionnaire annually, asking what kind of improvements they’d like to see on the property. Just make sure to read all of the suggestions. Then, find some suggestions to act upon. This is a great way to build trust and improve occupancy rates.
Work with a property management company
We know that initiating a rent increase can feel like you’re walking a tightrope. You want to find just the right price to stay competitive while maintaining occupancy rates. We can help. At PMI, we’re devoted to helping landlords keep tenants happy, even when it comes time to increase the rent. Learn more about what we offer by visiting our website today: .
