Renting your property is not as easy as it looks. Raising the rent may be one of your pet peeves as you don’t want to lose tenants and keep your home vacated but you’ve just got to deal with it. When you raise the rent on your tenants, it can be a difficult thing regardless of your reason. You shouldn’t raise the rent for no reason, but expenses or the cost of living – raising is a reasonable cause for a rent hike. However, it’s important to keep in mind that raising the rent might cause the tenants to move out due to no longer being able to afford the rent. But how can you break the news painlessly, here are a few things to note.
Every Year Increment
When giving your property on rent, increase the rent every year even if it’s only by $15-20. Isn’t that just spiteful with no real income bump? No, it actually has nothing to do with the money. The point is to set expectations – you are reinforcing the notion that the rent goes up every year, no exceptions. Don’t worry, none of your renters will go through the hassle of moving over with this small increase.
Never Raise Rent More Than 8%
No matter how much your tenants like the rental unit and get along with you, they will balk if you raise the rent by more than 10%. So keep in mind that even 10 % would be a higher price to pay so make it less. 8 % increase in rent would not be going to harm the renters.
Consider Other Offering Option
Sit with your tenants and talk to them about rental increase. E.g. you are raising rent from 1000 dollars to 1100 dollars and your tenants are unhappy with this. But you offer a way out and ask them that if 1060 dollars rent is acceptable to them and they should sign a two year lease.
Better Relations with Renters = High Renewal Rates
It’s a lot easier to forgive someone you like than it is to forgive someone you can’t stand. This applies to all kinds of relationships, including the tenant/landlord relationship. If you’ve already spent time cultivating a happy relationship with your tenants, they should be a lot more understanding when the time comes for you to raise the rent.
Phone And Written Notice
Make a phone call to your renter and tell them about increase in rent with reasons. Talk to them politely and make them understand about this. Write a rent increase letter. The letter should include the tenant’s name, the current rent amount, and the new rent amount. It should also include your signature and let the tenants know when their lease will end if they choose not to renew.
Poll About Property Upgrades
Talk to your tenants about property upgrades because you don’t want the tenant to tie the idea of upgrades to the idea of rent hikes. Over the course of the year, ask the tenant what property upgrades would make the most difference to them. Consider which desired upgrades would have the biggest impact on your long-term asking rents. If you could spend 1000 dollars and be able to charge another 50 dollar in rent, then in under two years that upgrade will have paid for itself. Property upgrades also incentivize tenants to renew their lease and stay long-term.
Be Friendly But Firm ProfessionalIt’s good to be friendly and jolly with your tenants but at the same time if you are running a business than you need to be firm and have to think about your business too.