Raising rent is a common practice that keeps you in-line with the current market. However, you cannot simply issue a notice to your tenants that the increase has gone up, and you cannot choose a random number to increase it by.
Here are a few tips to handle a rental increase the right way, especially during a global pandemic.
- Firstly, check your rental agreements before issuing a rental increase as it most likely states that the current fee is fixed for the term of the lease. If this is the case, you will need to wait until it is time to renew the lease.
- Consider your tenants’ current position as a result of the pandemic. Yes, you can still issue a rental increase, but have some compassion when the time comes as they are most likely in a difficult position, along with the rest of the world.
- If your tenants are in a month-to-month agreement, this allows you to legally increase the rent at any time you wish, as long as you give sufficient notice.
- We recommend giving at least 30 days’ notice, but do some research to ensure you are following the laws in your area first.
- Before signing a new lease with a brand-new tenant, consider giving them a heads up that rent is likely to increase by 5-10% (or whatever the going rate is to ensure you are in line with the current market). This way, it should come as less of a shock.