PHILADELPHIA - If your tenant is unhappy with the current rent, you may consider increasing the rent. However, you must keep in mind that there are limits on the amount you can raise your rent. Before you raise your rent, make sure you know the reasons for doing so. You can also compromise with your tenant if they are a good tenant.
Compromises To Keep Tenants Happy
As a landlord, it is essential to follow the lease as closely as possible, but at the same time, you should also be willing to make concessions when it makes sense. Depending on the situation, this could mean increasing the rent, offering an additional deposit, or creating additional responsibilities for the tenants. If you decide to make such a concession, it is important to write it down in a lease addendum. It should state the concession details, including what the tenant must do for the property. It also must specify what happens if the tenant violates the lease.
Limits On Rent Increases
Limits on rent increases are a common way to protect your tenants. Though many tenants expect to receive annual increases, some may not be able to afford the increase. To keep your tenants from moving out, you should stick to the limits set by law. The law states that rent increases cannot exceed 7% of the tenant's monthly income.
Some states prohibit landlords from increasing rents until a lease has ended. For example, you cannot increase the rent during the first 12 months of a year-long lease. However, a month-to-month lease allows you to increase it monthly as long as you give 30 days' notice.
You also cannot increase the rent in a discriminatory manner. You cannot raise the rent for certain groups or if your tenant has children. The law also prohibits landlords from raising the rent as a means of eviction or decreasing the services they provide. Moreover, you cannot raise the rent as retaliation against your tenant for exercising their legal rights.
If you have to increase the rent, you must get the consent of the tenant. In most cases, you need at least 30 days' notice for a 10% increase. However, the laws differ from state to state. In California, for example, landlords need 60 days advance notice, while landlords in Massachusetts must give advance notice equivalent to one rental period.
Reasons To Raise Rent On A Good Tenant
One of the easiest ways to attract new tenants is to increase your rent. However, the reason why you should raise your rent is not based on inflation. Increasing your rent every year is standard practice for many landlords. Some landlords increase the rent on a fixed schedule each year, while others may wait until certain circumstances arise.
Raising the rent on a good tenant should only be done after providing sufficient notice. It should not exceed 2% to 5% per year. If the increase is small, it is unlikely to cause your tenant to move. However, if the increase is too large, it may drive them out. It is also better to start small and gradually raise the rent until it is closer to the market rate.
Increasing rent on a good tenant isn't always an easy task, especially for landlords who are new to the business. You may be worried about upsetting a good tenant in such a situation. In addition, the rising costs can cut into your profits. Also, raising the rent on a good tenant may put the rent out of the tenant's price range, which is not always ideal.
The best tenants are the ones who pay their rent on time. These tenants take care of the rental property and are easy to manage. They are also reliable and rarely cause you any trouble. So, staying with a good tenant for a long time is possible. But there may come a time when you may need to increase your rent.