How to Raise Rents The Smart Way – Part 1

By on July 10, 2015
Good tenants are hard to find. These people always pay rent on time and never give you any sort of trouble. Everybody is happy to have them but when it comes to the question of increasing rents, it becomes quite a tricky dice to play. You need to get the task done without losing them. Raising the rent and not losing the tenants is a hard to balance act but when handled in a smart fashion always leads to a win-win situation for the landlord. He gets the raise done and the renters are as happy as they were before the raise. It is also an absolute must to keep the market competitive. In this blog we are going to look at certain ways where you can raise the rent with justification without any significant sacrifice.

Basics of raising the rent
This is the most important part where the landlord prepares a solid, full of facts base and study the market thoroughly for some time before actually raising the rent. Researching through all the options, he/she then calculates the amount of rent to be raised. This raise should not sound inappropriate or baseless in any way. The challenge lies in deciding what amount is insignificant in the eyes of the customer as compared to that which he would consider excessive. Reminding the tenant the facilities that he is having as compared to other localities is a very common methodology but this should not be an exaggerated. Below are some other ways that can help you justify the rent increment in a decent way. Following are the steps:

Assessment of the market

This assessment includes the landlord to do some homework. The two major steps in this regard are:

  • Market Research: This involves comparing the rates of your property (or properties) with the similar properties in your locality. You need to evaluate the demand of the rental units that are like yours; the vacancy rate; and requests that you receive for your property in a certain period of time. By asking, answering and researching these questions, you will be able to determine if the increment can be justified or not.
  • Tenants: You need to ask certain question to yourself.
  • What was the last time your rent was incremented?
  • Was the tenant now is different than it was when the rent was raised?
  • How much you value your tenant?

The answers to all of the above questions will help you in making the final decision about the rent increment from the perspective of the potential tenant.

Read more at Online Property Management Software

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