Should You Consider a Rent Increase?
Property management companies cycle their leases in a variety of ways. Some want their leases to start and end with the calendar year. Others prefer to have leases that coincide with the school year. Still, others choose to simply allow a lease to end 12 months after a tenant arrives. And with the end of a lease comes the question of raising rents.
If you are in the first category, you likely already are thinking ahead to next year and the lease renewals it will bring. If your cycle coincides with the school year, you probably have already made your decision and likely have a lot of moving trucks parked in front of your property right now. If you fall into the third camp, this question is probably always on your mind.
When considering a rent increase, first look at other properties in your area. If there are a lot of vacancies, your current tenants have a lot of options if they decide not to accept your new lease terms. Next, consider your area’s population. Is there a chance that your rent increase will keep potentially fantastic renters away from your door? The next thing to think about is the quality of the renter you want living on your property. Good tenants have a lot of options when it comes to renting an apartment. Bad tenants don’t necessarily have those same options. If you raise rents, make sure you know who will stay and who will go.
If, after considering these factors, you decide to increase rent on your properties, carefully craft your message to your current tenants. Let them know that you understand the additional financial sacrifice you’re asking them to make, and clearly explain your reasons for doing so. Proper communication can go a long way toward helping a tenant tolerate a rent increase.
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