If you’re considering raising the rent price of your property, it’s important to do so carefully and responsibly. An increase in price can sometimes be a great business move, while other times you could end up with higher expenses or a lower income overall. Here are some tips for raising rental prices.
In this article:
Do the Research
The first step when thinking about increasing rental rates is to do your homework—and a lot of it. Think about the state of the rental market in your area and the rates of similar rental property. Consider the amount of current vacancies you have, too. Can you afford to raise the rental price because your property is in high demand? Or if you have several properties, is it only feasible in one area? Think about your tenants, too: how will they respond to the increase, and will they be able to manage it?
Prepare for any tenant turnover expected from the change. Make sure you have a clear marketing plan and contingency funds to help you through the process of obtaining new renters.
Be Prepared for Upgrades
Keep in mind that charging more for your rental property can also mean the need to fill increased expectations. Current tenants will remember any repair that needs fixing and may expect higher overall maintenance if they’ll be paying more. And new renters may come to the property with higher expectations that meet the new price. Think about any upgrades you’ll have to make with the higher rent to keep your tenants happy.
Get Ready for Questions
Your tenants will obviously have questions if you make the decision to raise your rates. Be prepared to remind tenants that they are still receiving a good deal. Show them comparisons between your new prices and other local properties. And clearly address any questions about other cost changes, such as tax or maintenance.
If you feel you’re prepared to raise your rental property rates, make sure you’re doing the proper marketing, research, and preparation for possible upgrades. A property management company can help you in preparing for changes like this in your property.