No tenant will ever be especially excited to discover that a landlord has raised the rent, but a landlord can have a number of reasons for deciding to make that call for a property they own. Landlords need to turn profits on their buildings, and sometimes rising costs in other areas mean boosting rent for tenants. However difficult that may be, there are a few ways to soften the blow. After all, higher rents are no good if tenants storm out of the building the moment those costs have gone up.
So how does a landlord raise the rent without losing renters? Insurance by Castle offers these landlord tips to make the transition as smooth as possible:
#1 Set Incremental Rent Increases
One of the biggest mistakes landlords make is waiting to increase the rent too long, fearful of the backlash such a raise would bring. Then, a large rent increase comes and upsets renters more than annual incremental raises would. The fix, of course, is to make a 2-4 percent average rent increase per year the norm for all renters. If it’s an expectation from the beginning, the hikes won’t be a surprise.
#2 Cap It at 8 Percent
Smaller rent increases are not the type of thing to dissuade renters from sticking around, but once you start enacting increases above 5 percent, the waters get a little muddier. If you go as high as 8 percent in any given year, that can make it almost impossible for current renters to stay.
#3 Offer Alternatives
Another option is to give renters a choice: if they would rather not see annual rent increases, perhaps they may be interested in signing a longer lease in your building. While this could mean less income for the landlord, it also represents steady income. Many people are more than happy just to take the sure thing.
#4 Maintain Positive Relationships with Renters
The friendlier and more present you are with tenants, the easier it will be to alert them of an impending rise in rent costs. Getting to know them and making them feel as though you care about them as people put them at ease for what otherwise would be pretty bad news.
#5 Communicate Via Letter to Tenant & Phone Call
The law requires that any rent increase come with an official letter to tenant notifying them of the change. However, it costs landlords nothing to make a phone call, as well. Nobody likes bad news in writing, so having an actual conversation with renters about something like a rent increase makes it easier to swallow and may come as less of a nasty shock than a letter would on its own.
If you can follow these suggestions from Insurance by Castle, there is a much better chance that your rent raises will be more easily accepted by tenants. That means everybody is happy—not just the person bringing in the money on the property, but the people renting those units in the first place.