Landlording & Rental Properties

How to Successfully (& Legally) Raise the Rent as a Landlord

Expertise: Landlording & Rental Properties, Real Estate Investing Basics, Flipping Houses, Business Management, Personal Development, Mortgages & Creative Financing, Real Estate News & Commentary
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It is no secret that rents are now at all-time highs. Demand for rental housing has pushed rents up higher and higher over the last few years—and short of a huge building boom or crash, there is no end in sight. This is good news for us landlords, as higher rents equal more income and an increased property value.

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If you are a landlord who has not raised the rents on your rental properties in a while, perhaps now is the time to. At the very least, you should consider it since the current set of market conditions may never again be so favorable.

Raising the rent sounds like something that would, and perhaps should, be very easy to do. But, as with everything in life, there are pros and cons to raising rents, and there are good and bad ways to go about it. Some ways will be more effective than others. Some will cause you less pain and grief. If you are considering raising your rents, here are some steps to follow to make it as easy as possible on you and your tenants.

Assess Your Market

First, you must carefully consider if you can raise your rents in your market. All markets are local, and while rents in some communities may be skyrocketing, others may be barely climbing—or even on the decline. The only way to consider this is with a bit of market research.

You simply have to see what other landlords in your market are charging for comparable properties. Most of you are probably doing this all of the time anyway, but if you are not, check rental ads and online sources like Rentometer. Talk with other landlords in your area. If you find that your rents are lower that almost everything else or under market, then you can move to raise rents.

Finding that your rents are under market does not mean that you can instantly raise them. Remember that lease you signed with your tenant? (I really hope you are using a written lease!) That lease is a contract, and per the terms of that contract, you cannot alter any of the terms, including rent, for the specified term of the lease.

That means you cannot raise the rent in the middle of a lease term. You have to wait until the lease expires or is up for renewal. If there are six months left on a year-long lease, you can begin planning for that increase in six months. Of course, both you and your tenant could agree to a higher rent, but the chances of that happening are likely quite slim.

Related: How to Successfully Raise Rents Without Risking Costly Vacancies


Understand Local Laws

Now that you have determined that you can raise rents and when you can do it per your lease terms, what’s next? You need to know and understand your local laws. Laws regarding the landlord/tenant relationship vary considerably across the country. What might be legal in one city might not be legal in an adjoining one. When it comes to rent increases, the law will generally address a few specific areas.

  • How much notice the tenant must receive before a planned rent increase. In most cases, it will be one month, but some jurisdictions may require as much as 90 days.
  • How the rent increase notice must be delivered. Can you just call or text your tenant, or will you need to send a certified letter?
  • How much you can increase the rent. Some jurisdictions with rent control may not allow you to increase the rent at all. Others may only allow a certain percentage. Know your laws and stay compliant.

So, you have finally done some market research, examined your lease terms, and ensured compliance with local laws. What else should you consider? You should think about how much expense and turmoil you want in your landlording business—because no rent increase will likely occur without it.

Related: Raising Rent (& Risking Tenant Turnover) vs. Playing it Safe (& Missing Out on Rent): Which Wins Out?

Is Increasing Rent Worth It?

Some tenants will, of course, accept the increased rent, but others will decide to move. How many will move really depends on how much you increase the rent. But any tenant turnover will increase your expenses. You will lose income while the property sits vacant, and you will likely be spending money to find new tenants and get the property in rent-ready condition.

Will these expenses negate your rent increase? Only you can determine that, and only you can determine how much hassle and turnover you are willing to deal with. Sometimes it is better to let sleeping dogs lie or just gently move them, so to speak.

4 Tips for a Smooth Rent Raise


If you do decide to increase your rents, here are some final thoughts on how to go about doing it.

  • Give your tenant as much notice as you possibly can. Thirty days, in my opinion, is the bare minimum, with 60 days being much more desirable. More notice gives the tenant plenty of time to make a decision—and possibly gives you more time to find a replacement tenant if your current one decides to move.
  • Send notices of rent increases in writing, and then make them a part of your lease.
  • Try to only increase rents as units turn over. This way, you do not upset your existing tenants nor do you rock your business boat too much.
  • Improve the property a bit if you increase rents. It does not have to be much—a bit of paint here or there, some landscaping, installing ceiling fans, or even a new appliance or two. A few improvements along with increased rents may help your tenants feel like they are getting a bit more value for the increased costs, thus, softening any blow.

Landlords, what has been your experience in raising the rent? And how have you mitigated vacancies during the process?

Share with a comment below!

Kevin Perk is co-founder of Kevron Properties, LLC with his wife Terron and has been involved in real estate investing for 10 years. Kevin invests in ...
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    Peter Mckernan Residential Real Estate Agent from Irvine, CA
    Replied over 3 years ago
    I am just about to go have a tenant of mine sign a 3 year lease today with an increase each year that was agreed upon by all parties. This was really great to read and a coincidence the day of the renewal! Thank you Kevin!
    Peter Mckernan Residential Real Estate Agent from Irvine, CA
    Replied over 3 years ago
    I am just about to go have a tenant of mine sign a 3 year lease today with an increase each year that was agreed upon by all parties. This was really great to read and a coincidence the day of the renewal! Thank you Kevin!
    Krista Riggs Real Estate Investor from Orlando, Florida
    Replied over 3 years ago
    I like the idea of building in an automatic rent increase after the year lease is up, usually tenants end up month to month after that at the same price, but I lived in an apartment rental for one year and a month and that last month they automatically raised the rent pretty high! Interesting to see how the big dogs did it.
    Stephen Shelton from Debary, Florida
    Replied over 3 years ago
    I’m new to this (first renter signed in Jan 2014) and have not raised rent on either of my established rentals because the tenants are great and I’d rather have less rent than run the risk of chasing them off. Hell, one missed month of rent on my lowest property would require a new tenant pay $77 more a month for the other 11 months of a year! I hate that I will have to do this at some point, local politicians get greedier every year. While I lowered my insurance costs, taxes always go up… A lot.
    Angus Reed
    Replied over 3 years ago
    Thank you very much, It is a very helpful post and excellent discussion. The comments and Smooth Rent Raise tips attract my interest to read complete blog.
    Anthony Wilks
    Replied over 2 years ago
    New landlord here. I hadn’t even thought about a 2 year lease with an automatic rent increase in year two. I love the idea of offering long term lease discounts, but still a rent increase each year written into the lease agreement!
    Replied over 2 years ago
    If you are going to have a long-term lease, then it should have fairly generous provisions for breaking the lease. No one knows the future, and no one should be disproportionately punished for future events that might interfere with the lease.
    Anthony Wilks
    Replied over 2 years ago
    The lease is in writing and everybody knows the commitment. As a landlord, I commit to not raising the rent more than is written into the lease, and as a tenant you are saying you will be there for the duration of the lease. Tenants don’t have to sign a lease at all, but they may not get the place they want either. If you feel a multi year lease isn’t for you or you won’t be staying in the area that long, simply don’t sign a multi year lease. I offer a discount for commitment. Nothing illegal or punishing about that.
    Katie Rogers from Santa Barbara, California
    Replied over 2 years ago
    No one knows the future in spite of their best intentions and good faith commitment..