HOW TO POLITELY RAISE THE RENT
Raising rent is not easy to do. In fact, it can be almost as difficult as asking for a raise from your boss. But strategies do exist that can help you move beyond the angst.
The first thing you need to know is that you do not need to explain why you are raising the rent to your tenants. Your one legal responsibility is to inform renters in writing A) that an increase is coming and B) how much that increase will be.
That said, following are two simple but highly effective ways you can adjust tenant rent so as to lessen the psychological impact it will have on both you and your tenants.
Strategy 1: Make small increases at the time of lease renewal automatic
Most tenants expect a slight rent increase at renewal, usually in the amount of $20 to $50. But if you suddenly add $200 or more after not having raised the rent for a long period of time, you’ll very likely receive some negative feedback. A good rule of thumb is to increase rent between 3% and 5% a year.
You might consider making an exception to this if you have a good tenant you’d like to see stay on. In that case, you might waive the rent increase if they renew for another year. You can always make up the difference by raising the rent when that person finally moves out.
Strategy 2: Send an increase notice 60 days before lease end
Sending a rent increase letter this far in advance lets you know what the tenant’s intentions are. If he or she doesn’t plan to renew the lease, you have time to start marketing and showing the place without having a vacancy period.
You’ll need to state what the new rent will be and the date it becomes effective, which would be the day after the lease ends. If you have a fixed-term lease, you could include or attach a new lease with your letter or email. If you have a month-to-month lease, the tenant won’t need to sign a renewal since it automatically renews every month.
Herman Boswell understands that successful landlording not only requires substantial infusions of time and energy, but also good business and interpersonal savvy. That’s why our real estate professionals are ready to share their expertise with you when you need it.
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