As a landlord, asking your tenants for more money can be as stressful as asking for a raise at work. It can feel uncomfortable and scary as you fear damaging relationships with reliable tenants and respectful people. As a landlord, many tasks are challenging but simply just part of the job. Nate Armstrong is the chair of Investor Relations for Home Invest and understands everything about property management. He understands the stressors that landlords face every day, and he’s created three simple steps to follow when raising the rent as a landlord.
It’s understandable that you might be hesitant the first time you’re preparing to present a tenant with a rent increase. You don’t need to explain your reasons for raising the rent, but you do need to give notice to the renter in a respectful period. Give at least 60 days notice of a rent increase. Significant notice provides the tenant with time to decide if they still want to rent from you, and it lets you know in advance if you will have a vacant spot. Depending on your relationship with the tenant and your style of communication, select the appropriate way of sharing this notice. It may be emailed, written notice under the door or face to face communication, which is highly recommended by Nate Armstrong. Keep the respect flowing even through this uncomfortable process. Check the laws in your local city/state to ensure you comply.
Follow up with the tenant
Once you have communicated the notice of rent increase, give a weeks time before you approach your tenant and make sure everything is good to go. Nate Armstrong shares that giving some time before contacting your client is an excellent way to show respect and let them think the increase over before any action. Let this style of communication be a bit more relaxed, whether it be a text or a phone call or an email. If your tenant is upset about the raise, let them know that you have your responsibilities to keep the place running; point out any improvements you’ve recently done or have to do in the near future. Point out the property tax increase as well. Knowing the law and understanding the market is a great tool to have during these sometimes sticky conversations.
Understand the market and the law
Usually, your costs don’t dictate your price for rent, the market does. Understanding your area’s market keeps you on the ball and aware of undercharging and overcharging. As long as your rental rates are similar to those in your area, and understandable depending on the quality of your space, an increase shouldn’t feel out of place. Knowing the law is another not only relevant but necessary factor of this process. You can’t raise rent whenever you’d like, because there is a statue of limits upon property managers doing so. If the tenant has signed a lease, you can’t raise the rent until the contract has ended.
Nate Armstrong understands that raising the rent as a landlord can be a challenging task. With these three simple steps, it makes the process feel as simple as it should be. Remember to check in with your area’s laws and regulations when it comes to raising the rent. Also, keep the relationship between your tenants professional and respectful.