Many landlords believe they can only raise rent when tenants move out – but this is not the case. If you handle it delicately, you won’t lose your tenants and you will be increasing profits. It can be a daunting task for some landlords as they are afraid their tenants will move out. However, if you want to increase your profits, it has to be done.
Do your research
Look at the expenses for you property to see if they exceed the income. They will increase over time so it pays to look at this on a yearly basis. If the tenant asks for reasons why rent is increasing, you will able to paint them a clear picture.
Don’t go overboard
It is best to try to keep the rent increase under 10% otherwise tenants will disappear. It also pays to look at similar properties to see what they are charging and keep it in line with what the market rates are.
If possible when tenants move in, verbally warn them that rental increases can and are likely to occur over time. You should already have this in writing in your tenancy agreement with the tenants, so this should not be a surprise. Legally you have to give 60 days notice, but depending on your relationship with your tenants, providing a bit more may be the courteous thing to do. It also allows you to find new tenants if they decide to move out.
Do you have any tips on how to increase the rents on your properties?