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Rent Increase: How to Raise the Rent Without Losing Tenants

Rent Increase: How to Raise the Rent Without Losing Tenants
23 June 2022
6 min
0

Most owners of a property in different cities are sure that a reasonable rent increase is not the only way for those who want to make money with an alternative higher rate. Due to inflation, utilities can grow in price by more than 15%. If you decide to move in an additional tenant, the behavior of other guests can be unpredictable. Homeowners may lose profits with a lease increase. Let’s find out why this happens and how to prevent misunderstandings in 2022.

What is a Typical Rent Increase

If you want to prevent issues, you must know exactly the rights of both the tenant and the landlord. Such knowledge will help to avoid significant overpayments, legal consequences, and misunderstandings between the people who moved into the apartments and the owners. It may happen that both parties cannot agree to an increase in a rental property rent increase. When discussing a contract, consider all details to find a compromise:

  • Reasons to renegotiate a contract and rates
  • Base reasonable rent increase on the inflation trends in a particular state
  • Comparison with average real estate prices fluctuations
  • Guidelines for future control

Mailing About Changes

Homeowners don’t want rent increases to cause problems that tenants can’t handle. Spent notice before any revision. The common way is to write a letter or message about the rent increase percentage per year, quarter or month. People prefer certified mail, the use of messengers, or hand delivery. If they use special applications, they can set up automatic mailing, whether prices are reviewed monthly or yearly.

The owner of the premises may increase the rent or other payments by informing guests of their amount no later than the 30th day of the calendar month, indicating the notice periods. If you use Rentaapp.net, you have no problems in this regard. The term for notification of the amount of rent or other payments is 3 months unless the parties have agreed on a longer period in the contract. These rules are acceptable to most guests.

How Much is a Typical Rent Increase

If you don’t take a strategic approach to how and when to raise your rent, you may alienate long-term tenants. Most people prefer clear and fair terms that are discussed before signing a contract. Consider the average rent increase per year and the following:

  1. In what area is the tenant employed? Personal data is not disclosed but you can clarify this in informal communication. If tenants’ incomes are not grown, rising rents can be a reason to move. As a result, homeowners trying to earn $100 extra may lose their monthly payments with an apartment rent increase.
  2. Tenant’s request. Often people are willing to pay for more comfortable conditions. Owners of the apartments can appease the tenants with a refrigerator, TV, or other household appliances. The rent price increase within 5-7% will be perceived as inevitable.
  3. Trends in the market for a particular state. Before you increase the rent for your current tenants, consider offers and the requirements of competitors. Just read people’s reviews about how they entered into an agreement. The whole point of the rent increase is to get additional profit every month in line with the trends in the market. The highest prices do not mean raising income.

Find Out the Cost in Informal Communication

Top investors are convinced that the secret to successful rent rate revision and increases without losing tenants is to be attentive to detail and willing to compromise. Equally important is knowledge of the laws. Even if you don’t raise your rent, try to discuss it and find out possible wishes that may relate to comfort, the specifics of paying for utilities, and other aspects. Offer a friendly, constructive atmosphere or surveys to get their opinion. All these steps help to improve the understanding between the tenant and the owner and create a favorable basis for increasing the rent.

Key Takeaway

Initially, when people sign a lease for the first time, they should set expectations for new tenants regarding rent rate revision and increases. Not all of them attach special importance to additional terms.  Meticulous people have no misunderstandings. If you set up an annual detailed schedule for a typical rent increase, your partners will understand what you must notice. This means that they will have no reason to complain. Avoid increases in rent payments by more than 15%.

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