How to Raise Rent Without Angering Current Tenants

Raising the rent is an unpleasant aspect of property management in San Diego, but it’s something that must be done from time to time. Understandably, your current tenants may not take the news of a rental increase well. You can avoid angering your tenants and keep long-term tenants from leaving by taking steps to soften the blow.

In general, raising the rent without angering your tenants requires planning. You should anticipate needing to raise the rent on an annual basis to compensate for the rising costs of doing business. The following tips can help you make rent increases without facing a greater risk of losing your best tenants.

Make Sure Rent Increases Are Legal

One of the first things you should do before making plans for a rental rate increase is to check local laws. In some areas, a rental rate increase is prohibited by landlord/tenant laws. Some cities that do allow increases place a cap on the amount you can increase the rental rate. For example, in San Diego, there is a current maximum rent increase of 10% per year. However, some properties are exempt. That’s why it’s important to check with your local San Diego property management professional for details.

Start by Asking for a Competitive Rate

Before you buy any rental property, it’s important to do enough research to ensure it will turn a profit. You should be able to set a competitive rental rate from the beginning and still be able to attract quality tenants. If you’re asking too little, you’ll have to make significant rent increases that seem unreasonable to your tenants.

Keep Increases Modest for Better Property Management in San Diego

Some property managers recommend making small rental rate increases every year as a matter of policy. This keeps your tenants accustomed to the increases whether they are really necessary each year or not. Most years, the increases will be necessary to help you combat the rising costs of maintaining the property.

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As a rule of thumb, each rent increase should not exceed a 10% maximum. If you feel compelled to make an increase that’s higher than that, it’s probable that you were charging too little for rent in the first place. Stretching larger increases over a longer period of time will minimize the financial impact on your tenants.

Reinvest in the Property

Your tenants won’t be as critical of rent increases if they see that you’re investing some of that money in the property. Make sure the laundry machines, swimming pool, fitness center, and other amenities are kept in good condition. The grounds, security features, and common areas should all be well maintained. Tenants will pay more to live in a better community.

Offer an Alternative

Give your tenants an option that allows them to minimize the increase they will have to pay. For example, imagine you’re raising the rent from $1,100 to $1,200. Offer your tenants the option of locking in a rental rate of $1,150 by signing a new two- to three-year lease. The guarantee of keeping the rental unit occupied for longer may be worth the lower, locked-in rate.

Give Advance Notice for Each Increase

One of the most effective rules for positive property management in San Diego is to always give advance notice for any planned inconvenience. When it comes to raising the rent, you should provide a minimum of 60 days, if the tenant has resided in the property for one year or longer.

You should also use at least two methods of notifying tenants of the increase. For instance, send each tenant a written letter and notify them by email. You can also post a letter of increase on their front door.

Maintain Good Relations

Your tenants will be more understanding of the need for a rent increase when you make an effort to maintain good relations with them. When they come to your office, make sure to ask how they are doing. Inquire about their families or their experiences living in the community.

If you make an effort to develop relationships with your tenants, they will feel less critical of rent increases. They will understand that the increases are only done as needed.

Send Out Resident Polls

From time to time, email polls to your tenants to seek their input. This will give you insight into the common problems your tenants experience on the property. It will also help your tenants feel involved in how the property is managed. When a rent increase becomes necessary, your tenants will be more understanding of the need for the increase.

Many property owners turn to a management company to help them address rental rate increases and other issues with their tenants. A trained and skilled staff will communicate more effectively with your tenants and assist with maintaining your rental property. By using this type of service, you’ll get more out of your real estate investments.

News Reporter