As an experienced L.A. property management team, we understand the anxiety of raising the rent. You really don’t want to upset a great resident, but you do need to keep up with current expenses.
So, how do you handle an increase delicately without losing your residents? Check out our tips below.
1. Put it in Writing
Never even so much as hint at a rental increase until you have communicated it with your residents in writing. Put it all down in a well-thought-out note that explains why you have to increase the rent and make a great case for the residents to remain in the property.
2. Always Be Gratuitous
We’re not saying stretch the truth, but do start your letter with gratitude. Our L.A. property management team always lets residents know we’re glad to have them and appreciate how responsible they are. So, do that, and thank your residents for paying rent on time each month and looking after your property.
Then, do a bit of research and use it to demonstrate that you have been giving the residents a good deal by keeping the rent as low as you can in the face of today’s volatile market.
3. Lay the Groundwork
Next, lay out your case for the increase based on the costs you have to foot to maintain the property. Don’t get bogged down with the details, but just cite a few bigger expenses that you have shouldered in, say, the past 12 months, like taxes, insurance, and repairs. Suggest that these expenses have been a little bigger than an anticipated.
4. Mention the Rental Increase
Don’t ask your resident’s permission to increase the rent. Rather state that it is happening and when. Justify the increase as a way of keeping up with rising costs and to keep current on the market. Reiterate that you enjoy having the resident on your property and that you will continue to strive to keep the rent down as much as you can.
5. Offer a Reward
Why not offer your resident a reward for staying? You could subtly mention something like an annual upgrade, such as cleaning the carpets or upgrading appliances. Mention that your maintenance or upgrades will happen at the start of the next lease year, should the resident remain on the property.
Why Do You Need to Increase the Rent?
If your letter is not enough and your resident contacts you for further information, remember that often, an increase in a rental is the result of shifts in the cost of living, taxes, and inflation. In fact, many lease agreements include a built-in increase percentage that can be enacted if necessary – if you are not already implementing annual increases. This percentage is usually relatively small, like between two to five percent, but that small percentage could well be significant for you as a property owner.
Managing residents can be time-consuming, and many landlords find it difficult to increase the rent when they have fantastic residents. Learn more about how Polaris Property Management can effectively manage your property portfolio and deal with increases for you.