Landlords don’t have the authority to increase the rent whenever they feel like. There are specific legal steps that must be followed to effect the change. Among these steps include a rent increase letter. A rent increase letter is usually given by the landlord to the tenant informing him/her of the upcoming increase in rent. This letter may involve a monthly rental agreement or lease that is approaching its expiry. Therefore, read on to know what it takes to write a rent increase notice and how best to serve it.
How to serve rent increase notice
It is always recommended that landlords device ways to increase rents without losing their tenants at the same time staying within the legal limitations. As such, landlords should fist know the market rent. Then, calculate the percentage increase you would like to effect. As a good rule of thumb, your increase shouldn’t exceed 5% per year. After having the exact increase, you need to notify the tenants of the changes. To achieve this in a proper way, write a notice letter, either email or hard copy and send it to the tenants. This should be done, preferably 60 days before the effect. Also, this can apply to the lease tenants whose term is approaching.
Things to consider before increasing rent
Raising rent for your tenants isn’t easy. You never know how well your tenants will embrace the new changes. Therefore, before you proceed with the increment, there are factors you need to consider to ensure everything moves well. These factors include:
- Historical unit prices
- Competing rent prices within that specific area
- Livability and the attractiveness of that apartment to potential tenants
- Timing, i.e., landlords should consider economic fluctuations and stability
- The amenities and utilities that the apartment have and how they are charged
- The nature of the tenant, i.e., if they were paying their rent on time
How to check the current rental value
Before letting out your property or renting a house, you must check the current rental value. Putting a higher rental rate can put off prospective tenants. Likewise, the lower rental value can contribute to losses to the landlord. As such, you must check the current and accurate rental value for a given proper. To achieve this, you can feed your address in the following online searches:
Once you’ve run an online search, you’ll be able to know the value of any property.
How to write a rent increase notice?
First and foremost, write the names and address of the tenant at the upper left corner.
Write the date the letter is being written, the landlords’ name, and the current rental charges. Also, include your street address. This paragraph should be short, precise, and direct to the point.
Here, you need to inform the reader (tenant) of the date you would want the rent increment to start. Furthermore, the landlord should include the deadline of dates tenants can give feedback should they decide to object the increment notice.
In this paragraph, you (landlord) should conclude the letter with an official sign off. The letter is then sent to the respective tenants either through email, send through tenants’ address, hand delivery, or deliver in the premises using a property agent/ caretaker.
Rent Increase Notice Form Template
Rent Increase Letter Template
Sample Rent Increase Notice Letter
15TH Street Avenue
House No. 13.
This notice letter sent on [Date], marks the official notice for our intention to raise the monthly rent for the house you currently occupy [House Address]. The landlord, Mr. Steve Branson, will affect the increment from the current [Current Rent] $359 to [New Rent] $400. The rental payment will be due before the seventh day of every month.
Kindly note that the new increment will affect as from the [Date] 1st of February 20XX. If at all you don’t accept the increase in rent under the terms of this notice, you can notify us through email latest by [Date] 31st December 20XX. After the deadline, no comments, views or concerns will be heard. Also, be informed that all the initial tenancy agreements will continue to remain valid even after the increment.
Thank you very much for being a responsible tenant. We would wish you to continue with your tenancy.
Related: 9+ Sample rent increase letters