The real estate market and cost of living constantly increase, so renting rates also tend to rise accordingly. If you own and rent out Irvine, CA, real estate and stay at your initial level of rent, you may be leaving valuable money on the table. Though it is wise to raise rent to keep up with local market trends, you may find some tenants are unhappy with the idea of a rent increase. To raise rent without causing your tenants to leave, consider the following six tips.
1. Keep Rent Increases Low
Never raise the rent more than 10 percent at a time. Keep in mind your tenants probably picked the property because it fits their budgetary needs. Most people cannot afford to suddenly start paying hundreds of dollars more a month. A drastic increase is the quickest way to lose tenants.
2. Explain the Rent Increase Over the Phone
If you value a good relationship with your tenants, it is best to provide both verbal and written notice. Visiting the tenants or calling them on the phone gives them the chance to share concerns with you, and you can explain that you are just trying to keep up with market trends and inflation.
3. Install Upgrades
You may be able to justify a rent increase by adding upgrades to the property. Keep in mind this will only help you keep tenants if you select upgrades they desire. It might be helpful to talk to the renters and ask what upgrades they’d enjoy.
4. Remain Professional
Trying to be too friendly or apologetic about increasing the rent could backfire. Avoid attempting to argue or defend yourself while discussing rent increases. Use a calm, professional, and firm tone to clearly explain that the rent increase is just to keep up with average rental rates in the area.
5. Offer Reduced Rates for Longer Leases
When raising the rent, you might want to let the tenants know you can keep the price low if they are willing to sign a longer lease, which would help you keep good tenants who take care of the property and pay their rent on time. The feeling of getting a deal or discount may make the tenants more amenable to an increase.
6. Raise the Rent Slowly
Some landlords make the mistake of trying to keep their tenants happy by not raising the rent for several years before doing a large increase. It is generally better to do a slight increase each time the renters renew their lease. Raising the rent in small increments reminds the tenants you are just trying to keep up with inflation, and a small change in price will likely not be enough to upset them.
If you’re looking for properties in Irvine to purchase with the intent of renting out to tenants, reach out to Irvine Residential Living to see the latest houses, condos, and townhomes for sale. Irvine, CA, has many great homes on the market. Call 714-454-6304 to speak with one of our friendly agents and begin your search.