Raising Rent at Lease End in Park City Property Management
When a lease comes up for renewal raising the rent can sometimes be a difficult subject to broach with tenants in Park City property management. If you are wondering what your property should rent for you can check out an earlier post I have on that subject titled "What Should My Rent Be In Park City Property Management?". If you have already established a market rent but during the term of the current lease the market has changed you may want to increase the rent. Right now in Park City property values are climbing back up. This also results in an increase in rental rates. As the properties I manage are coming available I am increasing rates, either with renewals or vacant units. So here are some tips for approaching a tenant about raising the rent.
- Make the increase reasonable: This number should be a reflection of the rental rate. A $200/month increase might be completely reasonable for a single family home but not for a studio. Do your research on what similar vacant units are renting for and try to match that rate. If it ends up being a significant increase you may want to scale back. The goal is to keep the tenant while pricing the property for the market, not raise rent to unreasonable levels.
- Let The Tenant Know You Want Them To Stay: Some people may interpret the increase in rent as a desire to have them leave. You should be careful as a landlord to avoid being accused of retaliation by a tenant in Park City property management. Make it clear to them you want them to stay and that the increase is no punitive or designed to force them out. If they are resistant it may also be useful to explain all the costs of money, time and effort that go into moving. Some tenants may have a gut reaction without actually thinking through what moving will require. Things like deposits and first month's rent, moving trucks, etc. are just some of the costs of moving.
- Explain The Reason For The Increase: In general as a property ages it will require more money to maintain. Property taxes also typically go up. If you are paying any utilities or HOA fees these also tend to go up. Other outside factors can also warrant an increase in rent such as increasing property values, new property or business development in the area, etc. Explain your reasons behind the increase to your tenants so they will hopefully understand where you are coming from. Long term tenants are valuable for long term rentals in Park City.
As a landlord you need to balance your goal of maximizing revenue through rental rate increase with the potential costs associated with vacancy. Talk this through with your tenants and be willing to work out an amicable compromise.
If you would like more information or tips increasing rental rates., or further information about Park City property management in general click the link below for a free consultation. You will receive valuable information specific to your property that will help you make an informed decision. You will also receive a free, no-obligation quote on our property management services. At CC Realty we specialize in making investment property ownership a trouble free experience. Please contact us today for your free consultation.
