Whether you are brand new to investing in rental property or have done it for years, many homeowners report that one of the most stressful moments of their rental property journey is when they must tell their tenants that rent has changed. However, not all rent adjustments have to be a bad thing, even if the price does go up.
In order to successfully raise your rent prices, without raising concern, it is important that you take these tips from Real Property Management Talent to better communicate with your tenants and show them the value they receive based on the changing prices.
Home Improvements
When a potential tenant is choosing their rental home, they are looking at some of the finer details such as the age of the home, how new appliances are, if the color scheme of the home is modern and suits their style, etc. In this initial selection stage, a tenant must decide what fits their price range and are often willing to go slightly above their range if one home meets their needs over another.
However, once in a home there are often restrictions on what a tenant can do it terms of painting, remodeling, and so on. It is important for your tenant to understand that as you make improvements to your property, the price will increase with its marketability. Many tenants feel entitled to the home, and to the original price, they were given. If explained, however, and if the home improvements meet their expectations, then your tenants are much more likely not to raise their concern over price increases if they feel they are receiving benefits.
Housing Market
It is easy to feel like your tenants assume you are greedy because you are raising your prices. However, if you take the time to explain to them where the money is going, this scenario doesn’t have to happen. Just as the housing market changes from a buyer’s market to a seller’s market so do the prices.
One scenario to illustrate this is that of a rapidly growing city. Over time, rental listings that are located near the heart of the city, or any main attraction are going to naturally increase in price due to the demand. While this may seem unfair, it is offset by rental prices dropping in surrounding areas and the choice is then left up to the tenant where they want to be. It is not a landlord’s fault that it is a busy and exciting city, and these natural price increases must be explained.
Homeownership
Many tenants do not fully realize the benefits that renting can bring. While they may feel like they pay a lot of money they do not usually see the mortgage bill, the taxes, homeowner insurance, the utility bills and possibly the home loans it took for them to live in the property they call home. When broken down all these elements add up, and when taxes change or interest starts to build on possible loans, then prices naturally increase.
While your tenant should not know the details of all of these items, it is a helpful talking point to explain how you have taken on the task of homeownership so that they can enjoy the property they live in. All rent increases must be done within the laws, with some markets only allowing for minimal rent increases annually, it is still important to take advantage of this potential extra income.
When properly communicated, with plenty of notice before any changes are made, you will find that it is possible to have the best of both worlds with both happy tenants and extra income.
If you would like more information about our Temple property management services, then contact us online or call us at 254-4010-0400 today.
We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. See Equal Housing Opportunity Statement for more information.
