Writing a rent increase letter
From time-to-time, every landlord finds themselves in a position where they have to increase rent. However, you must decide if increasing rent will have any bearing on your tenants renewing their lease. If you decide to proceed with a rent increase then you need to provide the tenant with notification to that effect. Usually, this is in the form of a friendly letter specifying the increment amount and when it takes effect. Moreover, it is important for the letter to be warm and friendly. In addition, the increment has to be justified, as well as reasonable. Here is our guide on writing a rent increase letter.
Rent increase guidelines
Each country has its own specific legislation that regulates issues pertaining to rent increase. As a landlord ensure you’re up to speed with the laws that govern landlord-tenant issues in your area. Here are a few things you must be conversant with.
- Regulations for increasing rent
- Frequency of permitted rent increments
- Provisions for increasing rent within the term of the lease
- Maximum amount or rate for rental increments
- Length of the notice period
Usually, landlords can only increase rentals at the collision of a lease period. However, there are cases where a lease stipulates that rental increments can be implemented mid-lease. In addition, a 30 day notice period is customarily required before new rental structures kick in. Most areas do not necessarily have a cap on the amount you can increase your rent by. But it is important that the rent you charge is affordable and doesn’t alienate tenants.
Writing the letter
A rent increase letter serves as a tool to communicate the rent increase to the tenant. In addition, it is also a way to officially document and have a record of the communication. As you write the rent increase letter, remember to keep it short and professional. However, it should contain all the pertinent details to ensure there is no room for a misunderstanding. It is also important to infuse a human touch and thus communicate with understanding, warmth and empathy. After all, issues involving money are sensitive and have to be handled delicately. Do not forget that if you fail to show empathy you risk losing your tenants as they will not renew their lease.
Your change in rent notice letter should contain the following particulars:
- Firstly, it should contain the tenant’s name and particulars
- Secondly, the letter should provide the address of the property
- The landlord’s name and contact information should also be included
- In addition, the letter should contain the date it is written
- The current rent amount
- Rent increase amount
- The date the rent increase will come into effect should also be in the letter
You can also and a section or the tenant to acknowledge receipt of the letter and sign. In addition, there should also be a provision for the tenant to sign in the affirmative or negative to the rent increase.
Rent increases can be among the most difficult issues to deal with as a property owner. You can consider bringing in a professional manager to handle this issue. A capable manager will start by drafting a professional and comprehensive rent increase notification letter. Moreover, your property manager will know exactly how to deal with tenants and increase your chances of tenant retention.