Rent Increases: How and When to Raise Your Rental Property Rates

rent increases

With the rising cost of living, building materials, wages, and more, rent increases are a normal part of owning or managing a rental property. But how do you increase rent for your tenants? Is there a right and wrong way to go about it?

Keep reading to learn the basics of how and when to raise your rental property rates!

Know the Rules for Rent Increases

Legally, there are rules about when and how you can conduct rent increases. Rent increase laws say that you cannot increase rent for a tenant in the middle of the term of a lease. You must wait until the lease is up before you can give notice of rent increases.

If you have a yearly lease, this means you can increase once a year. If you rent by the month, you can increase at the end of any given month.

In most states, you have to give your tenants at least 30 days’ notice before you raise their rent. However, it is important to check the laws for your state because if you are increasing your rent above a certain percentage, you may need to give your tenants more advance notice.

Research the Rental Market in Your Area

Before you decide how much you want to increase the rent for your property, you should research the average rent increase per year in your area.

Conducting research is a great way to help ease any conversations that you may have with questioning tenants about the increase. You can address their concerns with solid evidence and research. You can also explain that your rent increase is reflective of rising rent costs in the area, as well as a rising cost of living and cost of property management and maintenance.

Raise the Rent a Little At a Time

Raising rent by a large amount every few years is a very unsettling experience for your tenants. The sharp increase could lead to you losing some of your tenants!

The best way to conduct rent increases is to raise a small amount each year. These raises should always be supported by your market research, and the tenants should be alerted with ample notice.

However, increasing rent by small amounts doesn’t cause as much immediate financial strain for your tenants and will increase your chances of having them renew their leases for the following year.

Write the Perfect Notice Letter

If you are planning to raise the rent, then you need to send out a rent increase notice letter to anyone staying at your rental property. This letter should include:

  • Information like the date, address, and name of the tenant
  • Key information about the lease like when it expires and when the new rent cost would take effect
  • Information about the rent, like the current amount, the new amount, and the date that the new amount will be due
  • The date you want to be notified as to whether they are renewing their lease
  • A friendly closing letting them know that you hope they will choose to renew their lease

Your letter should be friendly but professional. Write a welcoming introduction and a familiar closing, but be sure to give all of the necessary information your tenants will need in the body paragraphs of your letter.

Will You Be Raising Rent?

Investing in real estate and managing properties is a worthwhile experience. However, it is good to learn as much as you can about the rules of processes like rent increases so that you can develop the best possible relationship with your tenants.

Are you thinking about getting into real estate investing and property management? Contact us today to learn more!

Property Manager vs Landlord: What’s the Difference?

property manager vs landlord

What does it take to be a good property manager? What about to be a good landlord? Well, it won’t surprise you to learn that the skills for either one are similar. However, their work environment and responsibilities differ. So if you are thinking about getting into property management of any kind you should know the key differences between a property manager vs landlord.

Read below to learn more about each one and whether you would be a good fit.

What Is a Property Manager?

A property manager is an individual that is paid by the building owner to perform certain tasks for the tenants of the building. Property managers usually work in large multi-unit apartment complexes, multi-family buildings, or commercial properties (i.e., an office building). A property manager may also manage several properties owned by the same person or group.

The duties of a property manager may include but are not limited to:

  • Preparing units for new tenants
  • Advertising the property
  • Interviewing prospective tenants
  • Collecting rent
  • Managing tenant complaints/arranging repairs
  • Oversee other employees on the property
  • Handle records for tax purposes
  • Keep building up-to-code at all times

Although they do not own the property, property managers have a lot of responsibility to the building owner and the tenants. When tenants have problems or questions the property manager is the first person they contact.

What Is a Landlord?

A landlord is usually an individual who owns a property and rents to tenants. Landlords manage smaller buildings such as single-family rental properties or small multi-family rental properties. With smaller properties, it makes more sense for a landlord to manage the property instead of hiring a building manager to do it.

Sometimes the landlord will live in one of the units of a multi-unit building so they can better manage the building on-site. The duties of a landlord include but are not limited to:

  • Manage repair requests
  • Collect rent
  • Oversee rent agreements/leases
  • Handle tenants disputes/complaints
  • Screen potential tenants
  • Execute eviction policies

As you can see, the day-to-day responsibilities of a landlord are similar to a property manager. However, the landlord may not have as much financial freedom to hire vendors to help with things like landscaping and repairs.

Property Manager vs. Landlord 

The main difference between a property manager and landlord is the type of building they manage and their ownership status. Property managers manage larger buildings with more tenants and they don’t typically have any ownership in the building. Landlords manage smaller residential buildings and usually own the building or the units they rent out to tenants. 

Keys to Property Management

Now that you understand the differences between a property manager vs landlord, you can decide whether one of these roles is right for you. If you are a highly motivated, organized, people person then property management might be the right choice.

And if you’re looking to get started as a landlord by purchasing a rental property, contact us online. Our agents can help you find the best opportunity for rental properties!

A Landlord’s Guide to the Eviction Process

eviction process

Evicting tenants isn’t easy, especially if you’ve never had to go through it. On top of being a costly process, it can be a stressful one.

Unfortunately, most landlords will find themselves in this situation at least once. If your tenants refuse to play ball, eviction may be your only option. Thorough background checks can alleviate this issue, but some bad tenants can still slip through the cracks.

The good news: you can break the eviction process into four simple steps. Here’s what you should know about this side of property management.

Know Your Laws

Before you can evict a tenant, you need to know your state’s eviction laws. Reviewing them is particularly important if you’ve recently moved.

Knowing the laws can help you with writing lease agreements as well. If you know what to include, you won’t have to spend as much time reviewing the laws later. Alternatively, you can hire a property manager to take care of the tenants for you.

Check for Violations

When it comes to how to evict a tenant, the first thing you’ll need is a valid reason. Here’s a list of common violations of the lease agreement:

• Damaging the property

• Failing to pay rent

• Disrupting other tenants

• Staying after the lease expires

• Using the property for illegal purposes

Make sure to document evidence of violations. This may serve as evidence in court, so be as thorough as possible. These documents can include text conversations with the tenant, photos of damages, and bounced checks.

Issue an Eviction Notice

If you can’t come to terms with the tenant, your next step is to send them an eviction notice. This won’t automatically evict them, but it lets them know what they can do before the case goes to court.

There are three types of eviction notices: a notice to cure or quit, a notice to pay rent or quit, and a notice to quit. The former two give the tenant a chance to remedy the situation. The latter option simply sets a date by which the tenant needs to leave the property.

File for Eviction

If the tenant hasn’t moved out by the time specified in the notice, you’ll need to file for eviction. You can do so in your local housing court.

At the courthouse, you’ll need to prove that the tenant had enough time to respond to the notice. To do so, you can use the tenant’s dated signature or a certified mail receipt. Once you’ve provided proof, you’ll receive a scheduled court date.

If the case gets to trial, your best bet is to let the evidence speak for itself. If you win your case, the judge will give your tenant a time limit to vacate your property.

More on the Eviction Process

Keep in mind that this is just a basic overview of the eviction process. As straightforward as it is, individual circumstances can disrupt it. If you want to make sure you haven’t skipped any steps, hire an eviction lawyer to help you.

Want to avoid going through the tenant eviction process in the future? Check out our tips on how to find the right tenants for your property!

Tips for First-Time Landlords

landlord

In the US, there are around 11 million individual investor landlords. If you have the money, investing in property to rent out can be a great way to make some passive income. But it’s definitely not as easy as just owning a house, renting it out, and collecting rent. Many newcomers are surprised that being a landlord entails many more tasks, which can leave you feeling overwhelmed pretty quickly.

If you’re a first-time landlord, you’ll want to read on. We have some practical advice for you in this article.

Invest in Good Property

You might be excited to jump straight into this opportunity, but don’t just buy the first property that you can afford. Take some time to look into the qualities of the rental property you’re interested in to make sure that your money is well spent. This is probably one of the best tips to get started!

You’ll also want to get an inspection done before putting money down. This ensures that there are no hidden issues you’ll have to deal with.

Come up With a Good Vetting System

The eviction process can be a long and tedious one. So you want to make sure you’ve done everything you can to avoid it in the first place.

Don’t be too eager to fill your rental property with tenants. Make sure you ask potential renters for their:

  • Contact information
  • Current and previous addresses
  • Proof of income
  • Employment history
  • References

You’ll also want to perform credit checks to make sure you’re only renting to people who have good credit histories.

Don’t Spend All Your Rental Income

When you receive those rent checks, you can get a pretty penny all at once. It’s tempting to spend all that money, but what you should know is that the smart thing to do is to save a good chunk of it. We recommend saving around 6 months’ worth in mortgage and property maintenance costs.

You never know when things will go wrong on your property. And when they do, you want to make sure you have the proper cash reserves to cover those issues without draining your bank account.

Always Take Pictures and Videos Before Tenants Move In

You’ll be collecting deposits at the beginning of the contract to cover any damages you might need to fix after renters move out. But many will try to claim the damage was already existing so they can get the full amount back.

Cover yourself by taking pictures and videos before tenants move in. You should also have a move-in walkthrough where you and the tenants sign a document that notes that everything is in working order (and what isn’t).

Be the Best Landlord You Can Be

Being a landlord can bring in some great passive income. But without knowing the right steps to take, your responsibilities can become monumental.

We hope that our tips have given you some insight on what to do so you can be a first-time landlord with ease!

If you need additional help with listing your property, or you have other real estate questions, please don’t hesitate to contact us!

5 Qualities to Look for When Buying a Rental Property

buying a rental property

Did you know that there are almost 50 million rental units in the United States alone? Investing in a rental property is one of the best decisions you can make in the current economic climate.

You may be wondering about rental property investments and how to buy a rental property. Here are some tips for buying a rental property that will bring you a great stream of income in no time.

Check Crime Rates

You will not be able to attract good tenants if your rental property is in a bad area. Thanks to the internet, you can easily check the crime statistics in the area of your rental property through the library or public resources.

Sometimes crime rates in an area will fluctuate due to a variety of factors. You can see if there is a police presence in the neighborhood as well. For some of the best information on criminal activity, there are many watchdog sites that have other details.

Get an Inspection

If you decide on a rental property that you want to invest in, you should fork out the money to get an inspection done. That way, you can pay a little bit to see if there are any major problems that could cost you a lot more down the road.

Your inspector may point out problems with the rental property that can be easily fixed. Sometimes buying the rental property and doing some simple renovations can actually increase the property value by quite a bit, allowing you to charge more for rental fees.

Calculate Property Taxes

When you factor in your regular expenses for rental property investments, you need to factor in property tax rates. Location plays a huge role in this, as more urban and metropolitan areas tend to have higher property tax rates overall.

You can use the property taxes to determine how much rent you will charge your future tenants. For instance, if the market rates coincide with it, you may even be able to ask for more rent to cover property taxes if the amounts are higher than you expected.

Scout Out the Location

Location is one of the most important considerations when thinking about rental property investments. You want to make sure that it is close by to amenities such as shopping, banks, grocery stores, and other places that your tenants might need to access on a regular basis.

You can also check out the job market in the area to see if it will present employment opportunities in the future. This could potentially bring the value up on your rental property investments.

Buying a Rental Property Should Be Easy

When buying a rental property, you should not have to worry about whether or not it will be prosperous. With these features, you should get the best deal around on your rental property investments.

Want to learn more about investing in a rental property and getting your business going? Take a look at our site or contact us today for answers to all of your questions.