On more than one occasion, I’ve been accused of being a cold, uncaring, cruel, heartless—and meaner
than a junkyard dog Landlord.
But when an out-of-state landlord hasn’t raised the rent in 10 years, it’s crazy NOT to…and very BAD, BAD, business. And I don’t raise rents to extortion levels…I just bring them up to fair market value…which is only…well…“fair.”
In those cases, NOT raising the rent would be like owning a grocery store and knocking 25% off every item a shopper brings to the checkout. You’d be out of business in no time.
But this is like many similar mistakes that inexperienced real estate owners make—about property insurance, zoning, taxes, maintenance companies, financing, inspections…and of course, rents.
Is Landlording easy? No…there’s one heck of a lot to know. It takes never- ending self-discipline, smooth-running systems, a vast network of professionals, a ton of time, painstaking attention to detail, and having seen the same (hidden) mistakes many times…until they become easy to spot.
I’m about as mean as a junkyard puppy. And I actually give to charities…regularly!
3 Landlording Tips For Raising Rents
Here are three tips from one of REIClub.com’s investing articles on how to raise rents:
Tip 1: Research Market Rents
It’s far easier to raise the rent if you’re raising it to a reasonable level and comparable to other local rents. Find out what other local landlords are charging for similar properties, and if your tenant balks at your raise in rent, show them the data on what they can expect to pay for similar rental properties. Here is a quick short video on how to determine fair market rents.
Tip 2: Planning Ahead
Many states require advance notice of at least 30-90 days when raising rents or changing lease terms. This is something you will need to research for your state. Having the conversation sooner rather than later gives you an opportunity to find a new tenant, creating a smooth transition if the rental increase is not accepted.
Tip 3: Optional Longer Rental Agreement
When a tenant expresses their unhappiness regarding a rental increase – tell them you understand that they have their own bills and their own concerns, and that you’re willing to extend their rental agreement from 12 months to 18 or 24 months. This will offer written assurance that you will not raise their rent again for a year and a half or two.