Most people understand that the cost of living goes up just as taxes and insurance often do. That includes your tenants. The thing is, if they are good tenants and you hope to keep them, you want to avoid pushing them away with high rent fees. At the same time, if they are happy in your rental property, they will likely see the value in staying, since moving is costly and a pain.
As the landlord, you must know your market and local regulations governing rental increases.
For instance, if the market slows and you find yourself with vacancies, you will need to lower your rents to attract tenants.
Check on properties in your market that are equivalent to yours, and if rents have increased, then you need to follow suit. If you started out with higher rents then you are in a better position and can raise the rent less than other properties in the area.
Here’s a sample Letter of Rent Increase that you may find helpful.
Dear Tenant,
No doubt you are aware that rental costs in the area have gone up over the last year due to economic changes, insurance, and taxes. We have evaluated rental increases in the area and found that some increases have been as much as $100 per month and more.
Please know that we value you as tenants, but at the same time we have increased costs that we must cover. Because you are good tenants, we would like to reward you by increasing your rent by only $75 rather than $100.
This means you are still getting the same amenities, but for less than other tenants in properties in the area. We hope you agree that this is fair to both of us.
Stay on top of your market so that you are being fair and equitable to both your tenants and yourself. And if you find that the overall management of your property is just more than you bargained for, remember, you can call Cousin James Management. We will take the worry out of being a property owner. Whether it’s raising the rent, fixing a broken appliance, managing difficult tenants, or making sure they are keeping the property well groomed, Cousin James can do it all. Give us a call and let’s chat.