Why Increase the Rent?
Increase the rent rates regularly to keep up with inflation and demand, or you may find yourself missing out on income that could be yours. Competitive pricing can even impact the quality of residents you are looking for. As inflation continues to push the cost of living up, rents also continue to rise in the Framingham area west of Boston. For this reason, it’s important to regularly evaluate the local rental market and adjust the rate on yours. As a single family rental property owner, your attention to this will keep you profitable.
How do you Increase the Rent?
Here’s how to go about this in the right way. Keep in mind that rent increases are hard for your tenants. They may feel like you are taking advantage of them if you sock them with increases just as you are making repairs which they see as your responsibility anyways. You can see that this is a delicate process, and particularly for your long-term residents. Your intention may or may not be to cover those costs, but your tenants’ impression is what matters in retaining them as tenants. So, do not try to recover your necessary upgrades or repair expenses by giving them notice of a coincidental rent increase. You can carefully work your owner-related expenses into your books while separating them from this unfair perception. Gradual, regular rent increases keep your relationship with your tenants on high ground.
You must give proper notice of all increases so as to provide your tenants with enough time to find another rental home or to decide to stay with you. This offers them the respect they are due, and will go a long way towards preserving a good relationship between you.
Base your single family unit rental rates only on routine rental market evaluations, and plan to make small upward adjustments. When and how often, and even how much, you can increase rates, is often regulated by state and local authorities. Almost all states regulate the minimum warning time you give your tenants, and many regulate the increment and maximum frequency of these increases. Your attention to these aspects is good business.
With all this said, going beyond the requirements of the As a single family rental property owner, your attention to this will keep you profitable. law by giving 60 days’ notice, rather than the common 30, regarding an increase is very good for landlord-tenant relations. And give notice at an opportune time, such as 2 months before a lease is set to expire. Not only does this show you are concerned about your resident, but it will also give them time to shop around and discover that the proposed rent increase is actually in line with the current market.
As mentioned, regular and smaller rent increases are easier for your resident to accept than less frequent but larger rate hikes. A good rule of thumb is to make your incremental increases once a year, based on what the current rental market will bear. For longer leases, you may need to wait until the lease runs out, unless you’ve included language in your lease that allows for mid-lease increases.
Professional Help for You
Your property management strategy would be well-served by partnering with your nearest Real Property Management office. We offer market evaluations, leasing, and maintenance services tailored to your needs.
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