Landlord Lease Agreement
As A Landlord, How Can You Raise The Rent Price On The Leased Property Via Newly Updated Lease Agreement
Rental properties are popular asset among seniors or even for
those who are planning their retirement early, as a tool for future
investment. However it is not as easy as they imagine when it comes to
the maintenance of the property and upkeep of damaged household items,
such as door, cabinet, electric appliances, etc. Along with that, there
are rising costs of energy (natural gas, coal and oil) every day which
will even more affect the total maintenance costs and property
insurance premiums as well as tax assessments at the end of the year.
In order to keep up with those repair and maintenance costs, landlord
has not many choices but to raise the amount of monthly rent.
In that case, no renters are to happily accept a newly raised rental
payment and there comes a negotiation between tenant and landlord.
Landlords are always interested in full cycle rental rate without any
vacancy over the 12 months period on their lease properties, and on the
other hands, tenants are always looking for cheaper and clean house
status while duration of their signed lease contract remains valid.
While it is still legal for the landlord to file an eviction process
at the court, most of landlords want to keep the tenant as long as
possible instead of more hassle than necessary.
There are some tips on how to balance unhappy tenants and rising cost maintenance. First you can think of the right timing. If it is fall or winter season, most people do not want to move. Therefore you can delay your decision until next spring while you keep the current tenant happy, even though they are considering moving out of your property now. You can even give them a benefit of staying at current rental property which will save their moving costs and other inconvenience like cold wind outside. That way you could avoid your risk of finding another tenant to fill an empty property lease, which will be rare in the season of winter.
The second tip is more of negotiating technique in person. If you are considering raising the monthly rent, how would you like to approach the tenant? You can either send a letter notifying that you will raise the price from next month and you are expecting a signature from them within 10 days. Well that works too, but what do you think your tenant will feel at first? They might be surprised and embarrassed to immediately think that they want to move out of your property and search for the new place. Instead of such an irritating letter, you can simply knock the door and sit down with your tenant for a cup of tea. Then you can slowly introduce the reason of rent increase by giving them a reasonable explanation such as rising energy costs and repair/maintenance costs over the year. And at the end of the conversation, you can show them a modified tenant lease contract and most of the case, they don’t really look into every single lines of the document, such as tenant lead disclosure in the contract. You can point out what has been changed in terms of cost and expenses, and you will be able to get the signature without much trouble. There is nothing wrong with this method as you didn’t force them to do anything, but you have shared your burden with tenant and they understood and accept it at the end. It is much better than simply sending a notification letter.
Thirdly, you will need to ensure that your tenants receive a written notice even though you had a chance to talk to them verbally. In most states, it is required for all the landlords to give their tenants a written notice in a certain days advance. So following your local state’s real estate law is important. You can find the best time of handing over this notice to renters while you are having conversation. Even if they decide to leave, it is still advantageous for you because there will be longer time period elapsing wherein you will need to find a new tenants before the current tenants leave.
The fourth tip is for you to consider making longer term lease. Most of tenants don’t want their rent go up every year, regardless of the property’s size or condition. By proposing longer term lease that will span over few years, you can secure the tenancy for those periods of times and both parties can be happy. This might be risky for your end due to the maintenance cost, however if you observe the tenants and that they are nice enough to use the household items cleanly then you might end up saving a lot of money by having a good and responsible tenants. At your next lease renewal, you can modify the contract that there won’t be any increase for at least two years, and then execute a new lease.
The fifth tip is to go out and research what other rental properties are available in your area and how much the rent is for. Most potential renters seem to have wrong information about the market rent figures in their local area, and they believe they can obtain a better deal automatically by going somewhere else without giving a much thought. Before even speak with your tenants about raising the rent, do your little homework and walk through some other rental properties which are currently available in the area. They might say that they didn’t know how much other properties cost for them. Also gather some official data on the rental market and share with them. When you ask your renters to sign a new lease that has a higher rent, you can also show them the data about the other nearby rental properties. This will prove that they're still getting a "good deal" by staying in your property, along with other benefits that they can get out of your property.
Keep in mind that sometimes it is not easy and feasible to announce and increase the rent on your properties, even if the market rents are higher than yours. If you've got great and nice renters that are worth keeping, don't raise the rent immediately. This looks risky at first, as your income reduces slightly as a result, however in the long term it could be beneficial to you. You might have hard time finding tenants that pay promptly and take good care of your property well. Don't risk losing them by pushing an increase in their rent immediately. Think about other alternatives that are available when you sit down and talk the situation over with them, including the possibility of signing a longer term lease or phasing in the increase in rent slowly over the course of a year or two.
If you are a type of landlord who wants to stay solvent, it is not pleasant task for you to raise the rent, while facing the issue of naturally rising maintenance costs over the period of time. However, stable tenants living in your rental property are also valuable and a good fuel for your long term investment. So consider a long term rental lease which will be a viable option in some circumstances. Also keep yourself always in honest and fair condition, so that your tenants respect you and remove any obstacle when negotiation is going on between you and them.
If you are looking for more information, go to legalforms.name, and you can find many legal resources and free legal forms that are completely free of charges, including Rental Agreement, printable blank lease agreement and free rental agreement forms that are popular among many landlords and tenants who are interested in protecting their real estate properties.