How to Increase Rents in Your Property

People often ask, why do apartment owners raise rents every year? The answer is simple. Landlords need to make sure there is enough to cover their property costs like, mortgage payments, insurance, maintenance, repairs, utilities, and property taxes which are rising every year also so investors have to adapt. Simply because if they don't raise their rent and their expenses continue to rise, they will lose profits, and real estate investing is a business, which at the end of the day either makes a profit or loses money.

Landlords have the right to raise rents, and this is usually legal, but there are some exceptions, where rent laws may differ from state to state. If you are a tenant, your lease should contain information regarding possible annual rent increases. Some agreements specify a maximum dollar amount, others specify the interest rate on each renewal of the lease. Landlords should also explain to their tenants the rental rate increase policy upon arrival so they don't get surprised when it eventually starts because not all tenants read the lease.

Property owners should give their tenants written notice prior to the actual increase and the best is to send this form to them by certified mail, where the confirmation will be recorded that the tenant received the notification. Depending on the laws in the state, property owners may be required to send 30 or 60 days notice, while others require a specific notice period depending on the rental rate increase. Also, generally speaking, there is no limit to how much a landlord can increase their rent, if he wishes to raise the rent by 15%, he can certainly do, and it should be stated in the lease when the tenant has signed it.

Some states have certain restrictions on how much a property owner can raise their rent and if the rent for an apartment is regulated or stabilized, this usually means that there is an increase limit or an annual limit, and these laws are intended to protect tenants from unjustified price increases.

Tips for raising rents in your property:

Market Prices.

Most of the tenants should expect you to increase the rent on leases when they are renewed and to determine the most accurate price increase, always compare your price with what is available at other apartment communities, before you're planning an increase. Rating items in other locations like the amenities over yours and if you see that they offer even less and still charge higher prices than you, that's a good sign that it might be time to raise your rents as well.

Set The Right Price.

If you bid too high a price on a property, you know that if you don't get calls, you can fix the situation by lowering the price, but this usually does not happen when you ask for the low price of rent and then you have to get lower rent for a long period of time. You always can be more aggressive depending on how long your property has been on the market, the time of year , and so forth.

Advertise.

Improving your reach will improve your chances of finding renters you may pay higher prices. So by taking some really good pictures of the property at a 30-degree angle and by writing a compelling offer, you can attract those looking online for properties to rent, which these times is one of the main ways of how people search for new properties to live in.

Raising at Renewal.

When it comes time to increase the rent, how do you tell your current tenants about it? If you've already given them notice by emailing them 90 days before the renewal, this is a good way to get prepared. Consider what price will be fair for your tenants who want to stay. Be clear and simply explain circumstances that lead to the rent increase, such as insurance prices, property tax increases, service costs, etc.

First Impression.

Think about how you can improve the look and the feel of the property, things like painting your front door, mowing, fixing window shutters, etc. these are small expenses, but in the long run, they can bring you better results and will significantly affect how long your property will be rented out and at what price. Always make sure to thoroughly clean the unit before it's being shown, raise the blinds, turn on the lights, and add some air freshener.

Even if the market hasn't changed, you should plan to raise your rent at least a little every year. If you need advice on how to increase your rent in your property or if you want to talk about the management side, be sure to contact us for more information.