Informing a tenant that their rent will be increasing is a thorny job for any landlord. Rental property owners undoubtedly deserve to gain a fair amount of cash flow from their assets. The challenge is they must do so in a manner that doesn’t unnecessarily anger their renter – and could also be defended in a courtroom, if necessary.
Notices are the safest avenue for achieving these aims. However, before we discuss a few tips in this regard, let’s look at a few ways not to announce a rent increase.
How Not to Announce a Rent Increase:
- Slipping a note under their door. Being creepy is never awesome.
- Surprise them with the announcement on the 31st of the month. You would be better off tattooing “I Am A Jerk” on your forehead.
- Use a renter’s political stance as pretext – like this guy, who (maybe) jokingly threatened to raise his tenants’ rent if they voted for Barack Obama in 2012. Not cool.
- Drop through the ceiling into the living room and shout your message. A great way to end up on the news.
Tips for Announcing a Rent Increase
In all seriousness, if you don’t want to be “that landlord” but need to raise rent, what do you do? Thankfully, there are a few tips that help to make rent increase a smooth process for everyone.
- Do your research.
It is always a good idea to do some homework before increasing the rent on your properties. Make sure that everything you do is in accordance with state and local laws. This will protect you, especially if you face legal action at any point. Moreover, ensure that the new price is competitive with those of other rentals in the area. Websites like Zillow and Realtor.com are a great place to find such information.
- Think about timing.
Did you just find out that your tenant is a Muslim? Did they mention a few weeks ago that they are DACA recipients? Now would not be a good time to raise rent! Doing so could easily seem like discrimination to a jury if the complaint made it to the courts. Time of year is also key in implementing a rent increase. Telling renters during the holidays that their rent will go up next year will not win you any points.
- Give notice in writing.
This may seem like a given to some, but bears repeating. Dropping by the rental and telling the tenant that you’re increasing rent would not only be a recipe for a scene, but would make it difficult to prove – and defend – your actions in court. Whenever possible – document everything!
- Use a template.
- Give ample time.
- Be kind.
This is probably the most important part of the rent increase process. Being kind helps to maintain as positive a relationship as possible with your tenants. Even if they decide to move out due to the increase, you will still have a good reputation with them. Such a reputation will in turn make you stand out to potential renters. In an age where “Worst Landlord Ever” stories abound, be a wonderful exception!
Giving notice of a rent increase is no fun. Yet, following these tips will not only keep you from being a jerk landlord, but also encourage rapport, ensure legal compliance, and protect you in case of legal action. Wishing you the best as you navigate this process!
How do you increase rent prices? Let us know in the comments below!