What, really, are the rules behind raising rent? Stories routinely circulate in the news concerning rental management services, skyrocketing rental rates, and testy tenants fighting back. Unfortunately for renters and fortunately for landlords, the laws in place regarding rental increases are, well, minimal.
In fact, excluding rent-controlled apartment considering the very small minority they represent in the national housing market, there are nearly no laws restricting rental increases outside of simple supply and demand.
If market rates allow for landlords and rental management services to increase rent, then they can increase rent at will so long as tenants are given proper notice. Proper notice, in this instance, essentially translates to the end of the lease. So for a year-long lease, landlords and rental management services can only increase rent after the lease expires.
For renters on a month-long lease, payments can theoretically increase immediately at the end of the month. Although inconvenient, it’s the price month-long renters pay for the convenience of being able to leave whenever they so choose.
This lack of restriction on rental legislation is why rental rates continue to rise year after year. In fact, according to Rent.com, 88% of property managers out of 500 (that’s 440) raised the rent in 2015.
What’s more, these rental spikes are not going ANYWHERE. Low-supply and high demand dictate high prices. It’s a landlord’s dream and renter’s nightmare. The only saving grace for renters is to negotiate longer lease terms.
Renters should also keep in mind landlords cannot raise the rent as a retaliatory measure. Basically, if a tenant angers a landlord with an inconvenient maintenance request, the landlord or rental management service cannot get back at them by increasing the rent.
This all said, we at TenantEvaluation advocate for fair housing and treating human beings with respect. Granted, you should price your property at market rates so you continue to see income; but just because you can increase the rent significantly does not mean you should.
It pays to keep responsible tenants in place. It’s worth it to keep a tenant in place with a slightly lower than market rate if raising the rent will mean weathering the cost of a vacancy for a couple months.
Not to mention, a good tenant also mitigates property damage, encourages positive cash flow, and is all in all just enjoyable. A healthy tenant-landlord relationship is hard to come by, to say the least. As they say, you never know what you have till it’s gone. So try to understand the benefits of keeping your tenant in place at a slightly lower rate rather than incentivizing them to leave with a higher than necessary rental increase.
In order to find the right tenant to create a positive relationship with in the first place, use tenant screening services. Tenant screenings services (the good ones, anyway) pull credit, rental, and criminal history to help you as a landlord or rental management service understand their likelihood to pay rent on time, take care of your property, and ultimately just be a good person.
Conveniently, TenantEvaluation does all of the above and more for FREE. Yes, for free. Not only that, TenantEvaluation is the most comprehensive and credible screening service on the market today. Already having processed over 3.7 million tenants completely online and completely paperless with not a single breach of information, you can rest easy knowing your information is secure.
All in all, if you’re a landlord or rental management company/service, you can increase rent. Just do so within reason and at the end of the lease. If your property is subject to local rent control laws, check the legislation to determine the cap for increases. It really is that easy.