How to Increase Rent Without Losing Good Tenants

As a rental property owner, you make a profit based on the rent you charge each month. Depending on your individual situation, there may come a time when you need to increase the rent to continue to make a profit.

  • Wednesday, March 21, 2018

  General   Tips   

As a rental property owner, you make a profit based on the rent you charge each month. Depending on your individual situation, there may come a time when you need to increase the rent to continue to make a profit. It is not uncommon for rental property owners to raise the rent amount but how do you do so without losing good tenants? Consider the important factors below before you consider raising the rent.

Why are You Raising the Rent?

If you already have great tenants, then raising the rent might raise some eyebrows. You don’t want to lose your tenants, so really question why you are raising the rent. Some property owners raise the rent due to mortgage issues. If you have a mortgage where the interest rate is not fixed, and your monthly mortgage goes up, this will force you to raise the rent. Looking at why you are raising the rent can help to justify your reasoning to the existing tenants.

What Percentage of Increase are you Considering?

If you want to keep your current tenants, consider raising the rent a small percentage. If you go big and raise the rent 20% or more, the current tenants may be unable to afford your property. Consider how much you can raise the rent to earn a profit without pushing out good tenants. Quality tenants are hard to find and if they see that you are increasing the rent by a big percentage each month, they may be driven to move out. This would leave you with an increased rent payment need plus no renters.

Rent Increase Letter

When raising the rent on a rental property, you want to do so tactfully. Take time to create a rent increase letter and inform your renters of the upcoming changes. Give plenty of time for the renters to be aware of changes and take appropriate steps to stay on or decide if they wish to move out. Of course, you want them to stay, so be sure to word the letter in a friendly manner, making yourself available to any questions or concerns they may have due to the changes.

Overall, it is important to consider your tenants. When you have good people living in your property, it is being taken care of well and providing you with steady income each month. Weigh the pros and cons when considering raising the rent so you can be sure you will be able to maintain your renters for years to come.

DISCLAIMER:

VerticalRent® is not a law firm, and the employees of VerticalRent® are not acting as your attorney. Our educational blog or landlord forms engine is not a substitute for the sound advice of a local attorney, whom is familiar with your local laws and regulations. VerticalRent® cannot provide you with legal advice, nor are we permitted to engage in the practice of law.

We are prohibited from providing you with any sort of advice, opinion, explanation, or recommendation about your possible legal rights – which may include remedies, options, defenses, or the selection of landlord forms available on the VerticalRent platform. Our platform is designed to provide landlords and property managers with powerful online tools to screen applicants, collect rent online, advertise vacancies, and generate free landlord forms. To that extent, our blog often publishes general information on issues commonly encountered by landlords – such as evicting tenants.

Although VerticalRent takes every reasonable effort possible to ensure the accuracy of its consumer reports and landlord forms, we do not guarantee or warrant the information to be correct, complete, or up-to-date. The law changes rapidly across the United States, from jurisdiction to jurisdiction. We will not be held responsible for any loss, injury, claim, damage, or liability related to the use of our blog, landlord forms or consumer reports generated from this platform.



comments powered by Disqus
Get Started For Free!     Have some questions? Check out our FAQs.