The demand for rental properties is constantly changing, as the property market moves so to should your rent. While it is rare for you to drop your rent, it can happen, in this article we will talk about managing expectations and getting the most you can for your rental property. You should keep in mind that the rent you charge can determine the type of tenants you attract. If you charge under market value you may find yourself with less desirable applicants and if you charge to high you may find yourself with none at all.
The first thing you should consider is if the property is worth more than the current rent. Have upgrades been made recently? Has the market in the area changed to allow you to charge more? Some factors to consider here is if a new school has been announced or if a new business has moved into the area. Often when a large business moves into an area the demand for rental properties will go up and allow you to charge more. Pay attention to the number of listings and how quickly they are being rented out, you can use a site like Zillow to do this.
Next you can look at the amenities available for the tenants. Say, for example, you can offer free Wi-Fi or cable TV, or water/power or other utilities that becomes a basis for increasing rent as it reduces the hassle for the tenant. Other simple improvements like yard maintenance, updated appliances or having a security system installed can increase the amount you charge for your rent.
It’s advisable to increase the rent moderately. This is done so as not to scare away potential would-be long term tenants away. Building a small increase into your rental agreement can help to make this easier. If the tenants know up front that you are going to raise rent every year by a specific amount they won’t be shocked when it does go up.
You should also consider if it’s legal for you to increase rent. Different States have different provisions for increasing rent. It’s normally done to protect the tenant from being exploited. In some State, you may not be allowed to increase the rent within six months of a lease being signed and you may not be allowed to also increase the rent within six months of the last increase.
It’s also a requirement that when increasing the rent, you provide written notice to the tenant informing them of the increase and give him ample time (again this is State specific) to start effecting the increase. You should also ensure that the rental contract allows you to increase the rental charge. Some contracts provide that the landlord can not increase the rent until a certain long period.