Many property owners are wondering whether they should raise rent in 2014. It’s best practice to raise rent a little bit every year or at least consider raising rent every year so your tenants become conditioned to that and it’s not a big shock to their system when you do ask for a little bit more when they renew their lease. Rents are going up between five and 15 percent this year, depending on the area you have your property in. So, yes, you should definitely raise rent.
The question is always how to raise rents and still keep tenants. As we all know, if you lose a tenant, that vacancy is much more expensive than that little bit of extra income you get from a higher rent every month. It is important to raise the rent a bit over the long term, however, because year after year the increase amounts to a lot of money.
I suggest you get some comparables for your marketplace. Check the newspaper or look online so you can find out what the rent increases are in your area. Then, talk to your tenants. Figure out where they are and let them know that rents are going up all over the area. Show them how rents for similar properties are increasing at an average of 12 percent, but since they are great tenants and you want to keep them, you are willing to raise rent eight percent only. That would be a good way to approach raising rents so you don’t lose your good tenants.
An even better way to successfully raise rent is by using a professional property manager. When you have a property manager in place, you have someone with good negotiating and communication skills. That professional can approach the tenant on your behalf and put together a plan that everyone will be comfortable with.
I have had tenants tell me they appreciate the way we go about raising rent, and they have been more than happy to stay in the property and pay a little bit more every month. You want to keep your property rented, so make sure you raise rents the smart way.
If you have any questions about rent and how to raise rent, please do not hesitate to contact us at Aapex Property Management of Hayward. We’d be happy to share a little more information with you.