Today we are discussing issues that you need to consider when you’re planning to increase the rent on your tenant’s property. While reviewing their return on investment, many property owners think raising the rent will improve the bottom line for the upcoming year. It is important to review income and expense figures on a regular basis and to stay in tune with the housing market. As your property management company, we know that there are many other things to consider when you’re planning a rent increase.
First, remember the tenant is not the only one bound to the lease. The landlord must follow it as well. We always check the rental agreement to see if we can legally issue a rental increase. Typically, the best tie to raise the rent is on the annual anniversary month of the tenancy.
Next, take into consideration the current rental housing market. If the supply of available rental homes is low, demand will be higher and rents will increase naturally. But if the supply of rental homes is high and the demand is lower, rents will be flat or even decrease.
Conducting a close review of houses that have recently rented is critical in determining if a rental increase is due. You also need to consider whether the tenants have had an excellent payment history and taken great care of the interior and exterior of your property. Sometimes, it’s wiser to give no increase, or just a minimal amount to ensure you’ll keep your good tenants.
Finally, if a decision is reached to raise the rent, the amount should be reasonable. It has to be consistent with the rental market. Imposing a huge increase will only create bad feelings between you and your tenant. It can lead to a less successful relationship, and that’s not what you want.
If you have any questions about rental increases, or you’d like more information about how we can help you, please contact us at PRS Property Management.