Most landlords find it difficult to increase the rent during lease renewal and by how much.
Here’s a look at my proactive approach, tenant retention rate, and market research to help keep your tenants and grow your rental income.
Increasing Rent During Lease Renewal
In all my years as a property owner and manager, I have done countless lease renewals. During that time, too, I have had to increase rents.
But I am not just going to give you any random amount to add to your rent. The rate increase isn’t the same for all landlords anyway.
In my property management company, for example, we offer every one of our landlords the opportunity to record their expenses for the past couple of years into our system.
Our system allows them to create a budget based on those numbers. By seeing their cash flow, they review how they are doing with their budget versus actual expenses and income.
The Influence of Inflation on Your Rent Increase
The most important benefit of having financial records in our system is seeing how your expenses went up. This can include the costs of utilities such as water, taxes, and insurance.
For example, your expenses can increase by 3% due to inflation.
Inflation is how much value your dollar gives you from year to year. The 3% increase in the example is the average annual inflation rate.
If the inflation increases by 3% and your expenses increase by 3%, you lose 6% of your money if you don’t increase your rent.
How a Property Manager Helps You Increase Rent
Aside from being a property owner, I also manage properties. let me share with you how a property manager helps you increase your rent.
A property manager guides you through the lease renewal and rent increase process.
For one, we present your financial records to you and help you figure out how much to increase to cover your actual expenses, including the inflation rate.
Furthermore, the property manager explains the rent increase to your tenants. Most landlords dread doing this during lease renewal; worse is they do not do it at all. But having a property manager saves you the hassle of dealing with your tenants about the rent increase.
A property manager also ensures that you make more money. We do that by saving money on expenses or, most importantly, increasing rent.
The Landlord Tutor Promise
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