As you probably know, increasing your tenant’s rent can undeniably cause conflict and tension between you and your renters. Before raising the rent, consider our tips to protect your property from legal action and breaking the law. No one wants to loose great tenants, and with our guide you can learn a few tactics to successfully raise the rent and retain your renters.
Consider These before Raising the Rent
Before you raise the rent, you need to make sure that the raise is in compliance with your state and local laws. Not only is policy that reinstates rent controls gaining popularity in California and Oregon, but a few city ordinances that dictate fees and acceptable rent increases have already passed. For example, the City of Portland has an ordinance that requires landlords to pay their tenants a relocation fee if the rent is raised by more than 10% or if there is a no-cause eviction. City ordinances like Seattle’s CB 119855, which requires landlords to rent their vacant units to qualified applicants on a “first-come, first-served” basis, and CB 118817, which makes it illegal to charge move-in administrative fees or pet fees, make retaining good tenants a priority.
Additionally, you’re going to want to make sure this rental raise is well-timed. If you recently discovered information about your tenant’s gender, race, national origin, religion, disability or familial status that you previously did not know, raising the rent could be seen as a result of discrimination. You also do not want the raise to seem like it’s out of retaliation for (for example) complaints received about their pet or because the tenant requested extensive repairs. While this will usually not be an issue, timing rental increases carefully can help avoid a potential lawsuit.
Retaining Tenants after a Rental Increase
If you want to retain your tenants after increasing their rent, you need to be prepared. Whether you raised it to keep up with market rates, because of taxation, or for another reason, if your tenants ask you should be willing to show them how you came up with your final numbers. While some communities make it a policy to raise the rent every year (in small increments like $10 or $15) to normalize rental increases and curb outrage, we recommend doing this sparingly. No one wants their rent raised for no reason, and if you choose to adopt this method, you’re going to need to justify the raises.
Be sympathetic. If you believe your tenants will move because of the increase, give them more than 30-days to decide what to do. This will ultimately give you more time to prepare for a vacancy, and give them more time to adjust financially to the raise (if they choose to stay). If you want to keep your renters, consider giving your tenants some options. Offer them a month-to-month rate, a lower 6 month rate, and an even lower 12-month rate. This will allow you to keep your property full with the tenants you trust, while obtaining a higher rental rate and avoiding leasing stress and fees (although ApplyConnect tenant screening is free).
Ultimately, if you have a good tenant-landlord relationship and maintain communication, your tenants will be more willing to stay despite a rent increase. While letting your renters know that you’ve raised the rent can be an unpleasant and awkward experience, by making it seem like you’re giving your tenants options (either through earlier notice or with lease/price options), you can make your rental competitive while maintaining your renter’s trust. If your tenants do decide to leave, we’ll have your tenant screening and online application covered.
Have you raised your tenant’s rent before? Did you prioritize renter retention and communication, or not? Let us know your experiences in the comment section below & be sure to subscribe for more tips!