If you are a landlord, you are probably aware of the fact that the toughest decision to take and implement is to increase the monthly rent on your rental property. There is no doubt demand for apartments among renters in all housing markets across the country are increasing. Also, it is a right of the landlord to increase the monthly rent to keep pace with the increasing costs of amenities.
Still, most landlords try to avoid increase in rent as far as possible as they are afraid of an exodus of their tenants. The impact of the news of rent increase on all tenants is not the same. This is the reason how the news is broken along the tenants is as important as the amount by which monthly rent is being increased.
Things to do before increasing the rent
A landlord cannot increase the monthly rent of all tenants on rental property at the same time as the lease of different tenants begins and ends on a different date. They should look at the lease of each and every tenant to not just learn about these dates but also whether the lease restricts from increasing the rent in any way. In some leases, it is mentioned how and when the landlord can increase the rent of the tenant. There are also leases where even the amount by which the rent can be increased is mentioned. In some places, there is this provision to sign a new lease contract with the tenant whenever the landlord increases the monthly rent.
If increasing costs have become unbearable and the landlord finds that the lease term of the tenant is not going to end in near future, they should check if the lease says anything about built in rent increase. If there is no mention of any such rent increase, it may be difficult for the landlord to increase the rent of the tenant in the middle of the lease term.
There are some counties in the country where rent increase is subject to regulation. If the monthly rent is subsidized and the landlord receives subsidy from the government, there is nothing much that the landlord can do in terms of rent increase. In fact, some landlords are unable to increase the monthly rent because the earlier owner of the property received funding from the government. If your property is situated in cities like Washington and New York, your ability to increase the rent is limited because of the laws related to rent control.
Sending a notice for rent increase to your tenants
If you have read the lease contract and ready to increase the rent of the tenant accordingly, you need to send a notice of rent increase one month in advance. It should be titled Notice for Rent Increase so that there are no chances of miscommunication in future.
This notice should contain the following information
- Effective date of increase
- The amount by which rent is increased
- The new rent that would be payable
- Instructions on how to proceed if the tenant needs to sign a new lease contract
- Any other information that is necessary to be shared with the tenant by law
If the tenant does not speak English and mother tongue is another language, the landlord should get the notice of rent increase translated in mother tongue. It helps in keeping relations with the tenant better and also prevents any misunderstanding between the tenant and the landlord. Notice for rent increase is a must even if the landlord has earlier talked to the tenant about possible rent increase in future.
If you’d like to talk more about property management, or you need help with Everest Property Management, please contact us at Everest Realty.
As a top producing Realtor and Property Manager; Terry specializes in sales, extensive construction homes, rentals, REO’s, short sales, and all aspects of Real Estate. After graduating the University of Michigan with a master in MBA, Terry continued his endeavor and now has over 15+ years of experience in the Real Estate world. If there is anything that has to do with Real Estate and sales, you can always be sure of Terry to provide important, specialized knowledge.
