Every owner and landlord should evaluate their rental rates 90 days before the end of their Residents’ terms to determine if they should adjust the rental amount or terms of their lease. Take into account any property tax increases, maintenance expenses, and insurance rate increases. You may also want to take into account how difficult the tenant has been or if they pay on time or consistently late. The MOST important factor is the market rates of comparable rental homes in the area that yours is.
We send out a notice 90 days before the end of the resident’s lease to give them plenty of time to decide what they want to do. We follow up at 60 days, and automatically send them a new lease to sign. At 30 days, we give them notice to either vacate the property or that their lease will go Month to Month. If the lease is going to be MtM, that may be at a higher rate than if they would sign a full year lease.
We also recommend revisiting the other terms of your lease, such as who handles lawn and snow, how utilities are split, and any late fees or penalty clauses.
Here are some tips to help you write a rent increase letter that will effectively communicate the change to your tenant.
1. Begin with a formal greeting: Start your letter with a formal greeting such as “Dear [Tenant’s Name].”
2. Explain the reason for the rent increase: State the reason for the rent increase in a clear and concise manner. This could be due to increased costs, inflation, or market value.
3. Provide detailed information: Include details such as the amount of the rent increase, when it will take effect, and the length of the lease.
4. Offer options for payment: If you are willing to negotiate, provide options for payment such as a monthly payment plan or a one-time lump sum.
5. Explain any benefits: If the rent increase also includes any additional benefits, such as a new appliance or additional services, explain them here.
6. End with a polite closing: Conclude your letter with a polite closing such as “Thank you for your understanding, or “We look forward to continuing our relationship.”