How to raise the rent without losing tenants.

Even experienced property managers and landlords can fit it hard to break the news of an increase in rent. You have to do what’s best for your business! Here’s a guide on how to raise the rent without losing tenants.

Market research

Look into the current prices in your area to determine a fair amount for your property. Don’t negotiate or base your desired amount on your tenants wishes, do it based on market value. But remember if the increase is above market value or above your currents tenant’s budget, they will probably leave.

How much to raise at once

Depending on your financial situation and market research you can decide if you need to make a big increase at once. If you can afford to do it in small increments do it! Specially if you are happy with your current tenants and you wish for them to stay.

Inform your tenant

First of all you have to send a formal notice. We recommend you send it via certified mail. This way you can have an official receipt that proves the notice was delivered.

Be polite but firm. Send an official notice, but also give them a call. Hearing it personally from you will be received better than a cold piece of paper. Let them know you wish for them to stay if that’s the case and work towards a lease renewal.

Know the law

The amount you can increase, and how much time ahead you need to give notice might be restricted by law. Make sure you do your homework and check your local laws before setting on an amount and giving notice.

Give back

Making upgrades, staying on top of maintenance needs and providing new amenities (for example a brand new community laundry room) will make it easier for tenants to accept a raise in rent. If they’re happy with you and you can offer them something special, they’ll be happy to pay extra.

The four keys to raise the rent without losing tenants.

1. Know your laws.
2. Know what your residents need and provide it.
3. Do your research.
4. Be fair.

It is true that tenant turnover can be costly, but not increasing rent when the current arrangment is no longer profitable will be worst for your pocket in the long run. So, while it’s not always easy to tell your residents, doing so it’s important for your business. Remember that no matter how close you’ve grown with your tenants, your property is first and foremost a business and that should be the base of all of your decisions.

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