Raising rent on renewed leases.

[David Franklin]

I was reading a post on Facebook about terms in a lease. There were a lot of comments about raising the rent on every renewed lease. My question is if your taxes didn't go up nor your insurance and there was no other unexpected expense, why would you go up on rent?

[Nathan Gesner]

Quote from @David Franklin:

I was reading a post on Facebook about terms in a lease. There were a lot of comments about raising the rent on every renewed lease. My question is if your taxes didn't go up nor your insurance and there was no other unexpected expense, why would you go up on rent?

Have you looked at the market? Plumbers, electricians, cleaners, and everyone else is charging higher prices because the cost of fuel, equipment, and materials has gone up. Electricity increased 6.5% in 2021. Natural gas increased 25%. Wood for the fireplace is higher because loggers pay more for gas. The price of water heaters, 2x4s, and Windex have all gone up.

Many Landlords decided to not increase rent the last couple of years because of COVID. Now that costs are going through the roof, they're trying to catch up. It can be difficult to keep tenants when imposing a 10% increase or greater. Even worse? Some areas have imposed rent increase restrictions that prevent an owner from ever catching up unless there's a complete turnover.

Every investor can make this decision for themselves. If your costs haven't increased and you want to stay at the same price despite what the market is doing, that's your choice. It could come back to bite you hard.