Raising Rent For Student Tenants: What You Need To Know

By Ashley Paskill on July 11, 2022

As a landlord, your income is dependent on rent payments coming in. With the cost of everything going up, it is likely that you feel like you have to raise the cost of your rent in order to compensate for price increases in other places. However, if you rent to college students, this can greatly impact them since they are working with limited funds already. If you are considering raising the rent on college student apartments, there are things you should know and consider as you make the decision.

Legal issues

You may be tempted to suddenly start raising your rent for your tenants. However, you will likely have to wait. If your tenants have a long-term lease, they are locked into the current price until the end of the contract. Even if your tenants have a month-to-month lease, you still have to give at least 30-days’ notice before increasing the rent. Some areas in more expensive rent and housing markets have rent stabilization in place, so this will also increase the wait for increasing the rent. Knowing the laws of your area can help keep you out of legal trouble, saving you time and money down the line.

Draft a letter

As mentioned above, you will have to let tenants know that you are increasing the rent. This may cause tenants to not renew their lease, especially if they are struggling to pay their rent as it is at the current cost. Make sure the language is clear and easy to understand, especially since your tenants are students who may not have dealt with this kind of situation before. Clearly explain the situation and have it in your tenants’ hands before you offer lease renewal. Include dates, times, and other crucial information your tenants will need to know in order to be informed of what is going on.

Offer incentives for rent renewal

If you know your tenants are college students who are not graduating, you likely want them to renew their lease, even with the rent increase. Consider offering them an incentive such as a gift card, new appliance, or other wanted incentive that will benefit them if they renew their lease after the rent increase. This will give your tenant a reason to stay renting from you while ensuring that you continue having an income.

Communication is key

After you send the letter, your tenants will likely have some questions. In your letter, give your tenants a way to contact you and times when you are available to talk. Be open to answering any questions they have about the rent increase and what it could mean for them moving forward. Keeping lines of communication open shows tenants that they can trust you and come to you with questions and concerns they may have.

Image: Andrea Piacquadio via https://www.pexels.com/photo/man-having-a-phone-call-in-front-of-a-laptop-859264/

Prepaid rent

Many college students decide to prepay their rent for the lease so they do not have to factor the cost into their monthly budget. At the beginning of the lease, they likely have student loan money or other financial aid coming in, so they may decide to pay rent upfront. However, this may cause issues if you decide to raise the rent. They do not have the money factored or saved up, so they may struggle to pay the increase. This is why it is crucial to know the laws of the timing of raising rent, especially if the lease is not month-to-month.

Check your reasoning

When deciding to increase rent, check your intentions. Are you only looking to raise one tenant’s rent or all of your tenants? If you are only raising one person’s rent, ask yourself why. It is illegal for you to raise rent out of discrimination or punishment. If it is discovered that you did either one, the tenant has a right to take legal action. Your intentions may seem innocent to you but double-check your intentions to be sure you are not singling one tenant or behavior out.

Be open to compromise

For tenants who are newer to your properties and are not super reliable, you may be more willing to increase rent. However, some of your tenants may have rented from you for a long time, especially if they are college students who have lived on your properties as long as they have been able to. These tenants may want to compromise on the rent increase. Be willing to work with them to find a medium that works for them. This may include throwing in a perk such as free parking, free laundry services, or another perk they want. As a landlord, it is crucial you have tenants who are reliable and pay on time, so being willing to compromise with tenants who fit this is crucial.

Raising rent can be one of the most challenging things you do as a landlord, but it is necessary sometimes. Knowing the laws and basic information is crucial for saving you time and money down the road.

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