How To Increase Rent Without Losing Or Upsetting Tenants

As a property manager, there are times when you may have to raise your rent. This can be challenging, especially since you do not want to upset tenants. Doing so carefully is crucial so that you do not lose tenants, thus losing out on income. There is a fine line, but there are ways you can raise the rent of your properties without upsetting current tenants.

Do it legally

When it comes to raising rent, it is important that you do it legally. You may want to jump right in and raise rent immediately, but you likely cannot do that in your state or city. At a minimum, you are required to give tenants at least 30 days’ notice before you raise the rent. If your tenants are in a long-term lease, they may be locked into their current rate for the remainder of the lease. Some areas, especially areas that are more expensive, have rent stabilization in place, making it even more difficult to raise the rent. While raising the rent will be a surprise, it will be less difficult for the tenants to handle if you do so legally and provide the appropriate communication.

Keep communication open

Again, the best way to ensure that your tenants are happy is to keep communication open on both sides. When you let your tenants know about the rent increase, draft a letter using simple language and provide all of the necessary details. Be sure to include things like the date the rent increase will go into place. However, do not let the communication end there. Your tenants may have questions and concerns they want to address. Let them know what days and times you are most easily reached. Keep in mind that tenants may even keep records of every conversation, whether it is through text, email, phone, or in person.

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Offer rewards and incentives

If your tenants choose to keep renting from you, even after the rent increases, consider giving them incentives. This can be anything from a free parking spot to free or reduced-cost laundry services. Make sure these are things that your tenants want and will find helpful. Otherwise, they may be less likely to accept the incentives and the rent increase, making them find another place to rent. The incentives should make their lives easier and add value to your space. Know who your target tenants are and go from there.

Check your intentions

There are perfectly valid reasons for wanting to raise the rent of your property. You may have a major maintenance project you need extra money for or you may need the money to cover other expenses. However, you are not allowed to raise the rent out of discrimination against tenants. For example, you are not able to raise the rent to punish tenants for having a family, cooking certain foods, or even complaining about things in the rental that need to be fixed. Tenants who feel they have been discriminated against in these ways will be rightfully upset and will likely take legal action. As stated above, it is crucial that you know the laws of what reasons are legal and illegal for raising the rent. Do not single out just one tenant when raising the rent. Instead, if you raise the rent for one tenant, be sure you do it for every tenant when the timing allows.

Try to limit the increase

While it may be perfectly legal for you to raise the rent as high as you would like to, raising the rent 400 percent from where it is currently will upset your current tenants. Take a look at other properties near you to see what they are charging for rent. Try your best to stay competitive with what they are charging so you do not suddenly lose tenants to less expensive properties. This is especially important if your tenants tend to be college students. Student tenants have tight budgets, to begin with, so it is crucial that you are mindful of their needs as well.

Be willing to compromise

Some of your tenants may be newer or less reliable, so it may be easier for you to justify raising rent for them. However, you may have tenants who have rented from you for a long time who may be more upset by the increase than these other tenants. While you may still need to increase their rent, consider negotiating a bit, especially if they are willing to keep renting with you. Work with them to see if you can find a slightly higher rent that works for what expenses you need to cover while making sure they remain happy. Being flexible in this way will keep them happy and show that you care about them as people, not just as a source of income.

Raising the rent of your properties is inevitable at times, but it is crucial that you do so in a way that will not upset your tenants as that may lead to a loss of income for you and a poor reputation down the line.