I’m about to re-new a lease with one of my tenants and I want to increase the rent. I am trying to find out how to approach this? At the signing of the new lease? With an informal correspondence? How do you other landlords achieve this with little belly aching from the tenant?
Some states have formal requirements for a rent increase, such as terminating the existing agreement and offer a new one at the higher rent. Others have no requirements and you can simply inform the tenants of the new rent.
My policy is to send a letter of a proposed rent increase that will take affect in the future. If they feel it is too much, they can contact me to discuss the situation. Otherwise, they just pay it. I always ask a little more than I actually want in case I get a call. I have not had anyone call.
Tenants expect an occassional rent increase-- they seem to know that everything goes up over time. We have a letter that’s slightly apologetic while still making the point that our expenses go up just like everyone else’s.
Still, our tenants seem to do better with small, regular increases rather than huge jumps. We rent at slightly below top-of-market rates, then increase $15 - $25 at a time. Our biggest increase was after Hurricane Rita when the county came around and revalued everything at way-higher rates and the insurance companies either dropped us and/or sent their rates through the roof… :banghead
Just like Connie said, you have to raise the rent $10 to $15. It is not enough to cause them to move but if you have 10 houses and you raise each one $10 that is an additional $1,200/year. That can pay for one of your vacations.
Thanks to everyone for the responses, information that I sure can use. Connie I would love a copy of your letter to tweek it a little for my use. My e-mail address is in my profile.
Thanking you in advance
I’ll be happy to share as soon as Hurricane Ike moves on through :eek2
At home now, on the home computer and doing lots of boarding up and other storm prep stuff. If I forget, just send me an email with ‘rate increase’ in the subject line and as soon as I can, I’ll get it right to you.
If you’re needing it right away, I’m thinking the original was from the Mr. Landlord website and I just tweaked it a little :smile