As a landlord, chances are that you’ve had long-term tenants in one or more of your properties from time to time – and this can sometimes present a challenge when the time comes to raise rental prices. While it becomes necessary to raise the rent, you want to ensure that you don’t upset your decent tenants to the point where they decide to move elsewhere.
Below are some strategies you can implement to raise your rental prices – while still keeping your decent tenants happy.
Know the Legal Limits
Before settling on an amount for the rental increase, keep in mind that your state may have a legal limit with regards to the frequency and monetary amount that the rent can be increased in any given year. Knowing these recommendations and regulations will help you to come up with an increase percentage that is fair and practical.
Get to Know your Tenants
One of the best things you can do as a landlord is to get to know your tenants, because this will benefit your professional relationship with them. When the time comes to raise rent prices, this will help you work out the best and most practical way to approach your tenants about it. In most cases, it will enable them to see you as a physical person and not just a name that they write on their rent checks each month.
If you intend proposing a rental increase amount based on financial figures and current inflation rates, ensure that you’ll be able to explain to your tenants how you reached the final amount. While most tenants won’t ask too many questions in this regard, there may be a few that will require specific answers.
Humanize your Increase Amount
It’s recommended that you humanize the amount you intend increasing your rental rates with by informing your tenants about how it will directly affect you as a landlord. For instance, if utility costs have increased, let your tenants know how it will have an effect on your income from the property they are living in. Most tenants will be more willing to work with you if they can see valid reasons for having to pay a little more rent.
Make Reasonable Promises
Another strategy you can implement is that of providing your tenants with an agreement that there won’t be another rental increase for the next year, or alternatively, offering to perform some type of upgrade on the property in the near future – this can be something as simple as a new coat of paint. This will usually help your tenants to be more receptive to the news of a rent increase.
Using the above-mentioned tips and strategies can help you increase your rental rates by reasonable amounts without causing your decent tenants to want to move elsewhere. It’s also crucial to ensure that any and all agreements made in this regard are done so in writing to ensure that both parties understand what has been agreed upon.