If you’re a landlord, you know how tricky increasing the rent of your estate can be. You want to earn as much as you can but also don’t want to scare away good residents. So what’s a reasonable increment amount, and how often does rent increase in general?
In this article, we’ll guide you on how often you should raise the rent of your property. We’ll also discuss the factors you should consider when deciding the rent amount.
Reasons to Increase Rent
Who doesn’t want to earn good money by increasing the rent of their property? But that’s not the only reason you should consider the increment. One of the major reasons that increasing rent is important is inflation. Seattle’s inflation rate was recorded to be over the 18% average recorded in other cities. That means if you want to keep up with the cost of living in the city, you need a higher income.
In addition, you also need money to maintain your property and upgrade it according to the latest market trends. This is necessary because, without maintenance and upgrades, your property will lose its rental value.
How Often Does Rent Increase and When to Increase Rent?
How often does rent increase? It depends on many factors. But ideally, you should be increasing the rent of your property every year at the time of lease renewal. For an optimal rent increase value, always research the average market rent in your area.
Also, explain why you are increasing the rent to prevent residents from leaving due to the rent increase. After knowing the logical reasoning and that the rent aligns with the current market, they will likely renew their lease.
What to Consider When Increasing Rent?
Now that we know the answer to “How often does rent increase?” let’s discuss the optimal rent increase value. The new rent amount will depend on the following factors:
Property Value
The value of a property is affected by how close it is to certain amenities and the benefits of its area. So if a good school or market has recently opened near your property, its rent should be raised accordingly.
Market Trends
Always keep up with the rental market trends in your property area. If the demand for the area is strong, increase the rent like the landlords of nearby houses are doing.
Operating Costs
Landlords incur many operating costs, such as insurance, maintenance, paying a professional property manager, etc. So, the cost of all these things should be considered when raising the rent each year.
Inflation
With the current inflation rate, one cannot maintain their quality of life without raising the rent of their property. That’s why the rent increase you decide should align with the increased cost of your own living.
Conclusion
Knowing the general answer to “How often does rent increase?” can help you manage the rent of your property. Make sure to calculate an increment value every year, considering factors like property taxes and inflation.
You can also just avoid the hassle altogether and leave everything to us at Home Team. Our experts have years of experience in managing a wide range of properties. So, by hiring our services, you can be assured of always getting the best deals.
