We send out a notice to our tenants about 60 days prior to the end of the lease. Usually we’ll send an email or make a phone call. We ask if the tenant is planning to stay when the lease ends. It’s important to start this conversation early. After we have the initial discussion, we send the tenants a form that gives them an option to indicate that they would like to stay or they plan to move out. We also include information on whether we’ll keep rent at the same price or whether it will increase.
If we’re raising our rent, we tend to raise it around $25. In our experience, tenants don’t have too much of a problem with a rental increase in that amount. If you try to raise the rent by $50 or $100, they are probably going to look for something else. The $25 increase is okay, and tenants will usually stay.
After we send out that form, we follow up with the tenants about their decision. Our goal is to get their answer at least 30 days before the end of the lease. We want that commitment from them because if they are going to leave, we want those 30 days to find a new tenant and avoid a vacancy
for the landlord.
Raising the rent is not really a science and there’s no one way to do it. It’s more of an art and it takes some skill to do it correctly. Just remember that reasonable increases will retain tenants. You won’t have to worry about vacancy unless you raise it too much. If you have any questions about rental increases, contact us at Cape Shore Property Management.