Raise Rent but Retain Residents

by Andrea West


Posted on 2016-03-03 10:52:36


It’s got to be done, but how? As someone who works for the landlord side but lives on the renter side, here are some tips to allow the experience to work for everyone.

 

A Year Timeline

 

August - Let’s say this is the month I move in. I would like my landlord or property manager to verbally highlight the main points of the lease with me and especially include money talk. Let me know of possible fees. Also let me know if the lease allows for rent increases during the year or if they will increase when I sign again.

As a resident, I know I’m supposed to read what I sign, but we all know that nobody does. You do need all of these points in writing to protect yourself, but verbally explaining can help you avoid angry residents in the future who may feel blindsided when more money is required.

But what if the lease is done online? Bold and increase the font size of the points you would highlight verbally and don’t place all bolded points at the beginning of your paragraphs. Bolded points at random are more likely to catch their attention.

 

September - November - Do maintenance as needed and make sure you keep positive associations with your resident(s).

 

December - Since I moved in in August, I probably won’t have a rent increase at this time, but it should be noted that the holidays are not a good time to send a notice or increase the rent. Try to do this in November or January.

 

January - February - Same as September through November.

 

March - April - Yearly trends are starting to settle in. If you want to ensure that your units remain filled and that you also make money, you need to keep your prices competitive. Do a search to see what other apartments comparable to yours are charging and keep that in mind as you determine what your new rates will be.

Make sure you play by the rules. Increases in rent rates need to be law-abiding. The rules differ according to what type of lease your resident signed, whether it be month-by-month or yearly. They also change depending on the city and state you live in. You’ve got to do your homework in order to protect yourself and your property.

 

May - June - Let’s say the state I live in requires a sixty-day notice before a rent increase. Give your resident a couple of weeks added to the sixty days so that there is no question that you fulfilled the requirement. This letter should include the new price and date effective.

This will give your resident time to *yikes!* shop around. But if you did your homework during March and April, then I will find that if I stay, I will still be paying a good rate. I’m also one of those people who budget and I need to know ahead of time what the change in rent will be so I can plan accordingly.

 

July - Send me a follow-up letter that my lease will expire soon and about the rent increase. As the resident, I may at this time ask you why it is necessary to raise rent. As much as you want to make money for yourself, I want to save it for myself. Make sure you have sufficient answers for when residents may ask questions in relation to this and remain professional.

 

August - We have come full circle and it is time for me to sign my lease again. Have the new lease ready with any changes highlighted. Verbally explain to me what those changes are, including the new rent amount. Because I have been well informed about changes from the beginning and was reminded again before my lease was up, there is no need for tension to exist on either side at this point.



The Don’t List

 

Don’t just give notifications verbally. They need to be in writing as does your resident’s agreement.

Don’t do rent increases in larger chunks every few years. Every year, rent changes by about 2-3%. If you only change your price every five years, this means you will have to hike the rent by 15% in order to keep up with other apartments. 3% is easier to handle and less heart-attack inducing than 15%. Even a 4% increase every two years looks better. You’ll also make more money.

Don’t raise rent in discrimination or retaliation.

Don’t feel guilty. Raising rent is a natural part of being a landlord or property manager.


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