FUNDAMENTALS
LEASES
3 Steps for Renewing a LeaseWhile Raising Rent
WEIGHING THE COSTS OF RENT INCREASES CAN HELP RETAIN TENANTS
by Marin Scott
common fear for all landlords is rocking the boat with a loyal tenant by asking for a rent increase
rates, and whether your tenant can pay more in rent all play into whether you should ask for more rent from your current renter. To keep the process of renewing a lease and raising the rent simple and easy to follow, here is a three-step process:
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when it comes time to renew the lease. But with new expenses every year and property tax increases, your investment returns can quickly begin to diminish. So the question remains, how do you successfully raise your rent and renew a lease with a current tenant? There are many reasons why you as a landlord would want to renew a lease with your renter. Maybe you have an incredibly reliable tenant that pays rent on time and is respectful to you as their landlord and the renters around them. You could have built a relationship with this person where you are able to work well within the landlord-rent- er dynamic. They understand the rules that you have created as a landlord and you rarely, if ever, have any complaints or issues to deal with. Or you don’t want to go through the painstaking pro- cess of cleaning and fixing up a unit to put it back on the market and wait for a new renter to come along. There is no guarantee if you have to flip your unit and find a new tenant that they’ll be as great as the last tenant. Even worse, renovations and repairs tend to take longer and cost more than planned, which can leave you with an extended vacancy. If these reasons apply to you, then renewing your cur - rent lease is likely the best option available. Before you send over the renewal with an increased rate for rent, it is important to weigh the costs and ben - efits of raising the rent knowing this could lead to your tenant not renewing. Factors such as market values in your area, vacancy
Three-Step Process to Raising Rent
Make Rent Increases An Aspect Of Your Lease
Determine How Much You Should Increase Rent
Notify Your Tenant
Before you consider raising the rent during a lease renewal, know your local laws. Both state and local laws vary in terms of raising rent. Some areas have rent control laws that prohibit it. Others have rental caps that
30 | think realty magazine :: january 2021
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