Nobody likes paying more for the same product. Whether your rent has been raised or your favorite drink at Starbucks is fifty cents more, it can be frustrating to feel as though you're paying more for the same service or product you received yesterday. With that said, nothing can stay the same forever, and even if your town isn't experiencing an extreme housing crunch, you'll eventually need to raise your rates to account for cost of living increases. While your tenants won't likely be thrilled about any kind of increase, there are ways to raise your rent rates in an ethical way.
Before you propose a rent increase to your tenants, double check to make sure you're legally allowed to raise the rent. Rent control areas in cities like Washington, DC have limitations on how much a landlord can raise rent by and how frequently they may do so. In most places, tenants on a month-to-month lease need to be informed of rent increases with 30 days notice. For those on a longer term lease, rent hikes need to be communicated before their lease runs out.
Even if you're well within your legal rights to raise rates, it doesn't hurt to let folks know about the expected changes ahead of time. As with most dilemmas in the property management world, it helps to live by the golden rule. How would you like to be informed about rent increases? By treating your tenants the way you'd like to be treated, you'll stay on good terms with them regardless of spikes in rent.
Also be sure to loop tenants in on why you're deciding to raise the rent. Have a list of honest reasons ready to go before you make the announcement. Alert them to increasing costs associated with maintenance, upgrades to the property, or simple inflation. While they won't likely be thrilled with any reason, tenants will respect your decision to do so if your reasons are valid.
Keep your tenants happy by always staying aware of their situations. If you have particularly excellent tenants who always pay rent on time, consider rewarding their loyalty and incentivize their reason to stay. Compromises are also a good way to keep tenants happy. Offer them a longer lease in exchange for keeping their rent the same price. After all, you can't put a price on a quality tenant!
- Scott Safadi, Cal Bay Property Management
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