Education and news for smart DIY landlords!
“Tenant, there’s something important I want to say. I’m increasing the rent and its effective next month.” Said the landlord while the tenant looked at him perplexed with squinty eyes. “What? Why?”
Scenarios like these cause tension between landlords and tenants because landlords feel anxious about losing their tenants while the tenant is bewildered to as why he’s going to pay extra for no reason at all. And while having no tenants is bad business, today Landlord Prep™ teaches you the 10 ways to raise the rent without losing your renters:
Tenants will always question why they have to pay more after a long time of paying a fixed rent. So, whatever the reasons for your increase, they have the right to that information, such as increased tax, renovation and improvement costs.
Know the legal limits of increasing rent amount. Being familiar with the legal ceiling as to how much you can raise your rent helps you in calculating an increased amount that is also just and fair to both you and the tenant.
This is for those who want to double-check your work, whether they may be complaining tenants or the local authorities. Documentation shows that your calculations are legitimate and well-thought.
Read More: Basic Record Keeping System for Landlords
Tenants do come in many forms of life, sometimes they are average, above average or just really wealthy. Knowing their monthly incomes on how much they can afford or pay for helps you in setting an affordable price as to not lose them at the same time.
If your tenants are unhappy with the price hike, they are more likely to leave and resent you after. This is bad for the business. One way to fix this is to give them options like pay half of the increase while signing on a longer lease with you.
This would be a subtle way to stay in pace with the market inflation. Not only this method is more likely to have less complains from tenants, it also sends the idea that “Yeah, the market is changing and so does the rent price.”
Most of the time, a happy tenant will not leave even when the rental price gets a hike. That is why it is important for a landlord to build a positive relationship with his tenant while maintaining the degree of professionalism. If the time comes for the increase they will think that since the service provided when they arrived was good, then an increase would probably bring some improvements or help in maintaining the good service.
Asking your tenants about what they would want to see added after telling them of the rent increase would be good for them. It reassures them that the money spent was actually worth it if ever some suggested improvements from them were implemented by you.
Sending a letter to your tenants about the rent increase is good but it isn’t just enough; speaking to them personally shows professionalism and helps in giving you yourself the landlord a positive image. This way, you can also learn about their different reactions regarding your rent increase.
“Good day tenant.”
“Good day landlord.”
“I was wondering if you’ve read about the letter I sent to all of you, regarding the rent increase?”
“Yes, I did.”
“I wanted to talk to you personally about it if you have some questions, reactions, or suggestions?”
“Come to think of it, I actually have.”
If you're about to increase rent and bound to have service just not as good as the one across the street, then you're in for a bad time. A tenant will trade himself for a better place that’s got an even lower price rather than stay on yours. If you're faced with the same situation, increase your rent, but just a little.
There are loyal tenants and there are picky ones. Either way, both are important for business and keeping them while planning a rent increase might be hard but there are a lot of ways to help. I hope you learned from the tips above!
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