How to Increase Rent Property and Keep Your Tenant

A landlord has the right to increase the rent for property when the current lease is up. If there is a formal written lease in effect, the rent cannot be raised until the lease expires. If the tenant is renting on a month-to-month basis, the oral lease expires at the end of each month and renews again. Some reasons a landlord may increase the rent are to cover the cost of major property repairs or simply catch up to current market levels.

Because no tenant will look forward to a rent increase, there are several things a landlord can do to increase the rent and not lose a tenant. As long as the communication is open and the landlord can explain the reasons, the tenant is more likely to understand why the rent is going up. If the property will be improved as a result of the increase, the tenant is more likely to stick around.

Start the landlord-tenant relationship out right when you first talk to the prospective tenant. As you set up the initial lease, make sure to mention that over the years you will likely be incorporating occasional rent increases as per the rental market fluctuations. Then, when you've decided to increase the rent on a unit, it won?t be a complete surprise. Many landlords set up a schedule of when rent evaluations will occur, such as after every year or two. At least the tenant will know when reviews are expected and a rent increase may result.

Give the tenant plenty of notice about the rent increase. Depending on each state?s recommendations, the notice must be anywhere from 30, 60 or 90 days in advance of the increase. A landlord interested in keeping a tenant around should plan on giving more notice than the law allows. This shows that you are interested in open communication and gives the impression that you are not trying to gouge tenants. It demonstrates a planned increase rather than seeming like a reaction to other events.

Consider the timing of the notice. Avoid rent increases during the holidays or other high stress times of the year, such as back to school. Be willing to work with tenants if the rent increase proves to be a larger chunk than normal by setting up an installment rental increase. For example, you can raise the rent partway at a certain point in time, then raise it the rest of the way a few months later.

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