How Often and by How Much Should You Increase Your Rent?

When is it time to increase the rent on a property? Today I’ll discuss.

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A good rule of thumb is to plan a 5% increase in rent every year. If you have great tenants that keep your property in amazing condition, it does bear consideration; is it worth it to you to raise the rent and risk having a less-than-stellar, long-term tenant? There are also costs associated with having vacant properties.

As you can see in the graph in the video above at the 1:00 mark, the trajectory of rents since 1988 has gone consistently upward. Very seldom have we seen dips in rent. Of course, one of the benefits of buying a home is being able to avoid the consistent rise in rental rates.

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I recommend setting the appropriate expectation with your clients regarding your yearly rent increase to keep up with the costs of rising insurance and tax rates.

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Ultimately, I recommend setting the appropriate expectation with your clients regarding your yearly rent increase to keep up with the costs of rising insurance and tax rates; this measure will make sure that your margin isn’t shrinking as those costs go up.

If you have any further questions, don’t hesitate to reach out to us. That’s what we’re here for.