Indiana Rent Increase Limits?

18 Replies

Is there a limit for how much you can increase a tenants rent in Indiana?  I purchased two properties with inherited tenants who have been paying rent well below the market rate.  I will honor their current rental agreements but plan on increasing rent as much as 70% (owner was paying utilities too) with the next agreement.  I believe I only have to give 1 months notice, but I haven't seen anything that limits how much you can increase rent.   

So I can't speak into Indiana. However, Pennsylvania is broken out per area. So for example PA does not have any restrictions. But the city of Philadelphia would. So it is really by region or city that would determine this. I'm guessing Indiana would be the same. So you may want to check the city or area you are in if they would have any rental restrictions. Now on a human level, giving them a heads up it's increasing by 70% might be worth it(that is what the 30 days notice is for too). Because I'm going to take a guess here and assume the tenant will move out if you increase it that much. It might be worth doing an upgrade to the home so they feel like they are getting something out of the increase. But either way, I would do the same and try and get that rent up to the market value as quickly as possible. Best of luck. Hopefully, this was helpful. 

Mark,

There are no limitations on rent increases in Indiana. The only stipulation is that you must give a minimum of 30 days notice. As Sheldon stated, I would suggest you give them more than a 30 day notice. A 70% increase is massive for a renter to absorb. I think if you explain to the tenant, why you're increasing the rent so much, they'll understand. But to increase with just a notice, can be detrimental to both parties. Most likely, they know they're paying a low price. So explaining to them why their rent is going up, is just good business. Sheldon also mentioned maybe doing some upgrades. This makes a tenant feel like they're "getting" something for the increase. If they're paying on time, keeping the place clean and are overall good tenants, try to work with them as much as you can. A "good" tenant can be worth their weight in gold! 

Thank you for the feedback.  I plan on giving the family as much notice as possible.  I definitely won't increase it 70% in year one, I'm not a monster, lol.  The tenants have been in the home for 10+ years so they seem to be good to the home.  However, their rent hasn't increased the entire time they've lived their.  I just wanted to make sure I wouldn't run into any legal issues before increasing rent.

Mark, as long as you give them the legally required notice, you should be good to go. It sounds like the tenants are well aware of the deal they have. It also sounds like they're good tenants. Ten years is a long time. Those are the type of people you want to hold onto! Best of luck. 

Originally posted by @Sheldon Zimmerman :

So I can't speak into Indiana. However, Pennsylvania is broken out per area. So for example PA does not have any restrictions. But the city of Philadelphia would. So it is really by region or city that would determine this. I'm guessing Indiana would be the same. So you may want to check the city or area you are in if they would have any rental restrictions. Now on a human level, giving them a heads up it's increasing by 70% might be worth it(that is what the 30 days notice is for too). Because I'm going to take a guess here and assume the tenant will move out if you increase it that much. It might be worth doing an upgrade to the home so they feel like they are getting something out of the increase. But either way, I would do the same and try and get that rent up to the market value as quickly as possible. Best of luck. Hopefully, this was helpful. 

There are there rent increase stipulations in Philadelphia code now?

We always give a 60-day notice to give the tenants time to adjust.

How much are the tenant paying and what is the market rent?

You are running a business and not a charitable organization. Sometimes, it is better to hit the tenants with a large rent increase and let them move if they want because then you rent the apartment for the very maximum. You need to create a simple spread sheet to see if you come out ahead by taking the chance that they will move. Suppose, you don't increase the rent and you lose $3,000 to $4,000. Then, you increase the rent one year later and your tenant moves, anyway. Now, you are in the same boat as if you increased it all at one time with the exception that you lose money.

I definitely don't believe in trying to keep tenants by keeping the rents low.

The rent is $910 but the previous owner agreed to pay all utilities, which are $450/mo on average (old house). The market rent for a house it’s size in the area is $1,100-$1,200 with the tenant paying all rents. I want to bite the bullet and just jack up the rent but I battle with the ethics dilemma since it’s a family of 4. Maybe hire a property manager to do it and take the emotion out of it. 

Originally posted by @Mark Aiken :

The rent is $910 but the previous owner agreed to pay all utilities, which are $450/mo on average (old house). The market rent for a house it’s size in the area is $1,100-$1,200 with the tenant paying all rents. I want to bite the bullet and just jack up the rent but I battle with the ethics dilemma since it’s a family of 4. Maybe hire a property manager to do it and take the emotion out of it. 

Ethical and unethical are not factors. Since when did you every think that any business is unethical because they raise their prices. Maybe, it is unethical for tenants to the tenant to live in your rental unit knowing that they are taking advantage of you because you have mental issues in regards to raising their rent.

If the apartment is worth $910 per month then that is what you charge. If it is worth $1200 per month and every other tenant pays their own utilities then that is what you need to charge. Be a business man and don't short your own family because you have some issues within yourself. Why should your wife not be able to but all the makeup she wants at Nordstroms because you have a mental issue in regards to charging what the tenant should be paying.

It is not your fault the previous landlord didn't charge the market price for the rents and there is no reason you need to be soft in the head from now going forward.

I have one brat who just started college in Fairbanks Alaska and another who just started at Ohio State University. Raise the rents and send me half of the increase if you like to help other people's families.

If I'm going to make a larger rent increase, I usually do it in tiers. ie, rent will increase to $xx in 60 days and then 6 months after that it will increase to $xxx. This gives them time to discover that they're getting a good deal. I've recently given notice to a long time tenant (been in the house over 10 years) because we haven't been able to get them to pay rent in a timely manner. I know they don't want to leave but we're fed up. We gave them a 60 day notice to vacate (required in Georgia for month to month) and then filed an eviction when they didn't pay. They've since paid voiding the eviction but I expect we'll need to do it again next month. sigh...

One piece of advice is to make sure the rent is appropriate for the condition of the unit. ie, if it would rent for $1200 fully renovated, what's it worth in its present condition. Factor that in.

Originally posted by @Josh G. :

@Mark Aiken, Nope, I just had my rents increased by $1,200 in Indianapolis. I gave move out notice yesterday.

 An increase to $1200 or a $1200 increase?

City of XXX Dept housing website. Rent control? Rent increase limit? Lease expiration date?   In CA and west coast states it is often 60 days in advance after 1 year of stay.

@Jack Orthman thank you for your thoughtful response full of grammatical and spelling errors.  There are plenty of examples where business raising prices are considered unethical (e.g. pharmaceutical company increasing the price on life saving medicine).  Just because I'm empathetic towards individuals with financial struggles doesn't mean I have a mental disability.  I probably will be better off financially increasing the rent to market value immediately but that doesn't mean the human elements shouldn't be considered too when this is my business.   

Originally posted by @Mark Aiken :

@Jack Orthman thank you for your thoughtful response full of grammatical and spelling errors.  There are plenty of examples where business raising prices are considered unethical (e.g. pharmaceutical company increasing the price on life saving medicine).  Just because I'm empathetic towards individuals with financial struggles doesn't mean I have a mental disability.  I probably will be better off financially increasing the rent to market value immediately but that doesn't mean the human elements shouldn't be considered too when this is my business.   


It sounds like you have a problem to me since the following are two statements that you wrote.

"I definitely won't increase it 70% in year one, I'm not a monster, lol."

"want to bite the bullet and just jack up the rent but I battle with the ethics dilemma since it’s a family of 4."

When you write something then it may be best to explain on more detail, or be prepared to defend, in a polite way your full meaning. So, please explain what you are battling with and what is or is not ethical about increasing rents to the market rate.

As for my spelling and grammar??? Writing on BP is a hobby and not a job.