How to raise rent on tenants

3 Replies

Add it to the lease. Refer to what is allowable in local law. Make it so you are not raiding the rent but that it is simply a part of the contract meant to keep it in sync with inflation.

There is no magic to it. The tenant is going to be unhappy no matter what. You can be rational with them and explain that your taxes go up every year, and the cost of maintenance goes up every year, and there is inflation every year, but in the end you are a greedy rich SOB. 

Just be fair on the rent and be matter of fact about it. I'm going to need to adjust the rent to $XXX. If you get pushback you can either say: Based on current market rates I believe this is fair. Or you can explain how your costs go up. Or you can just shrug. 

Don't fear losing tenants. Yes vacancies and turnover cost money. So does moving for a tenant. So does charging under market rents because you're scared to lose a tenant. 

FYI, tenants generally move due to work and family changes, not rent increases. They expect rent increases. 

I don't know any Landlord that has raised rents and been praised by the Tenant. I don't like seeing the price of gas and T-bone steak going up, but that's life.

As long as your raises are fair, it doesn't matter what your tenant thinks. You offer a product for a particular price; they are free to buy it or take their business somewhere else.

Some notes about increases: give notice in writing and keep it short and professional. There's no need to give reasons or try to soften the blow. Increases should be done all at once; raising rent in increments over a period of time is more likely to cause confusion and they'll still be upset about it. Finally, if the tenant is excellent (timely payments, good communication, taking excellent care of the rental, etc.) then you can consider raising rent but keeping it 5% below market to reward them for good behavior and encourage them to stay. Try not to let rent get 10% or more below market because then you'll have to use large increases to catch up and really tick off the tenant.