When you own investment properties, you want to get the most out of those properties. If you have a tenant who is paying rent, but not as much as you can get, you may want to look into upping the rent. Here are a few common reasons why the rent should be raised and a few tactful ways a property manager can deliver the bad news to your tenant for you.
Reasons Why the Rent May Need to be Raised
The number one reason why rent may need to be increased is because rental prices have dramatically risen since the renter signed the lease or since the last time rent was raised. If this is the case, it may be time to up the rent. Another reason why rent may need to be increased is because you have made renovations that have increased the value of a property. Typically, when you upgrade a rental home or property, the amount of rent you can get for a property can increase. The last reason why the rent may need to be raised is because your property-related prices have increased. Generally, when taxes, utilities, home insurance and other standard property-related items increase, rent does as well so you don't absorb these on your own. However, you have to ensure you are still renting the property at fair market value or your tenant may not want to pay the increase.
Tactful Ways Property Managers Can Deliver a Rental Increase on a Tenant
Having a property manager deliver the news to your tenant can be great, as they can do it tactfully. Generally, it is best to let the tenant know via phone call or in person visit that rent will be increasing, rather than by simply blindsiding them with a notice in the mail. However, a letter must still be mailed letting them know about the increase. Additionally, give your tenant notice before the increase goes into effect. This allows them to budget accordingly and may make the increase easier to swallow.
Do you have properties that you need to increase the rent on? Do you want to do so without scaring off your tenants. Let Gassen, a property management company in Eden Prairie, MN tactfully and lawfully let the tenant know that their rent will be increasing in the future.