How to Raise the Rent Without Ruffling Feathers
Raising the rent is something that many landlords have to grapple with at some point. It is difficult, especially if you have to raise it a significant amount or you know that it means the person living there will have to move because they can no longer afford it. However, you have to do what you have to do to keep your profit coming in, which means that sometimes, yes you will have to raise the rent – even if you have long term tenants.
The first thing you need to do is make sure that you can legally raise the rent. If you have a lease agreement, the rent is fixed for that term of the lease and cannot be raised until it is over, which is why most rental increases occur when the lease is renewed. If you have a month to month agreement, you have to give a certain amount of notice. Look over your monthly agreement and the landlord-tenant laws of your state and local governments to see if you have to give 30 days’ or 60 days’ (more common) or even longer notice. Remember, if you are in an area where there is rent control, in other words where the government controls rent prices, you need to be extremely careful. In some situations, you won’t be able to raise the rent at all.
Tricks for Raising Rent Peacefully
One approach to raising the rent is to use a trick that marketers will sometimes use to make people pay more than they wanted to previously. Give your tenants three price options to choose from – it sounds silly, but it works. Offer those three choices and allow your tenant time to think over it. You can include something like
Option 1: Raise the rent $50 per month, offer to deep clean the carpets throughout the apartment/house;
Option 2: Raise the rent $100 per month, but offer to push the raise off for a few more months;
Option 3: Raise the rent $150 per month, but replace one of the existing appliances that is older.
You have to make your own options up, but make sure that on the other side of the deal, you come out the winner. It might take a few months, but on a year-long lease, it works out.
The Lease Renewal Decision Form
In order to officially raise the rent, you need to have a new Lease Renewal Decision form. You can find mock-ups of those all over the internet.
At the end of the day, some tenants might still call you to complain about the rent being raised or they might even move. However, that is just part of being a landlord. Over time, you will get better at doing it until it is something completely comfortable for you to do.