How to Raise the Rent
How to Raise the Rent ~ Southern Residential Leasing
For landlords, raising a tenant’s rent can be a delicate dance. No one wants to see rent increased, but unfortunately, it’s something that has to happen once a lease is up for renewal. Blame this business practice on inflation and expenses ranging from taxes to insurance and repairs. Read below for three easy ways on how to raise the rent and still keep your tenants.
Raise the Rent Every Year
Truthfully, most tenants will expect a small annual increase in their rent. Raising the rent by no more than 4% each year keeps the rent competitive within the market. It’s also a manageable increase for renters. If you dramatically increase the rent, then tenants will opt not to renew their lease and you’ll be left with an empty property.
Offer an Alternative
Are you tenants unhappy about even a slight increase in next year’s rent? Try this strategy: offer to lock in a lower rent increase if they’ll sign a longer lease. The longer you can keep each tenant, then the lower your turnover rate. You’ll even see a spike in average returns!
Communicate the Increase
Good landlords know that written notice of rent increases must be given anywhere from 30-90 days prior to lease expiration. However, if you want to stay in good standing with your tenants, also give them a call. Be friendly and polite, but firm and professional. If a tenant is unsure about renewing because you’re increasing the rent, a phone call is a great time to talk it out. This may be a good opportunity to negotiate a lower rent increase for tenants who are willing to sign a longer lease term.
Remember that no matter how you go about raising the rent, be professional, friendly, and firm with your tenants. Keeping a warm relationship is key if you’re wondering how to raise the rent! They’ll want to work with you in the same professional and friendly manner.
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