How to Appropriately Raise the Rent in Kitsap

The Joseph Group May 2021

Ian Joseph

“Clients first!” – is a huge part of the DNA that Ian Joseph and his Team have established at The Joseph Group. This motto helps them focus on striving for the highest level of customer experience, for their clients (landlords) and customers (tenants). In fact, Ian strongly believes that in life, family and business, you must strive to give more than you receive. “You can have everything in life you want if you help enough other people get what they want." - Zig Ziglar

Raising the rent can be tricky! It might feel like you're overcharging for your property or that a rate increase will run excellent renters away. However, the best property management Kitsap offers will tell you that not raising the rent (when necessary) can hurt your bottom line—but there's an appropriate way to do it without discouraging residents!

Much like professional maintenance staff, the ideal rental rate is essential to generating the income you need from your rental homes. However, the "ideal" rate might not stay the same year after year—and that's not a bad thing! With expert insights and the right tools, investors can adjust rental rates and maximize ROIs. Here's what Kitsap investors need to know about raising the rent the right way!

Real Estate Prices

When the Rent Is Too Low

Can the rent be "too low?" Yes! When real estate investors don't charge enough rent for their properties, they lose money every day. It's tempting to think that setting the rental price lower than a competitor's monthly rate can make your rental more attractive. However, doing that sells your property short, can attract unsavory renter prospects, and ruin your cash flow and long-term income plans.

What If It Was "Ideal" Once Before?

At some point, your rental price was probably ideal. You calculated your expenses, ran Kitsap market research and analysis, and estimated the right amount of rent to cover your costs and put profit in your pocket—but times change!

Property taxes increase, HOA fees go up, property values increase, cost of living goes up, and other expenses increase over time, even when you work hard to set and maintain a budget. When life around your rental property makes maintaining it more expensive, your "ideal" rate is no longer relevant, and it's time for a rate increase. 

Are There Rules for Rate Increases?

So, the current monthly rental price isn't covering your costs or boosting your income. Can you increase the rent next month as high as you want to set it? 

No. There are rules! Panicking and raising the rent amount too much or at the wrong time will damage renter relationships and become a more expensive problem than a rate that's too low. 

To follow the law and keep excellent renters, investors need a strategic approach to raising the rent. Working with the best property management Kitsap offers is an excellent way to understand what changed about the market, how to justify an increase, and the best approach to making it happen.

When increasing the rent for a current renter:

  • Check local, state, and federal laws about rent control or other factors impacting how much and when you can adjust rental prices
  • Consult the lease to confirm the rules about increases and timing
  • Wait until it's time to sign a new lease before applying an increase
  • Give renters plenty of notice before a new increase goes into effect

If it's time to put a new rental on the market or relist a property, it's also an excellent time to review the monthly rate and increase it if necessary. Making property upgrades and starting a new lease with a new renter is an ideal time to bump the rent a little higher without overpricing your rental compared to similar properties in the Kitsap market. 

Senior woman with application paper

It Starts With the Lease

We mentioned checking the lease before applying a rate increase. If your lease doesn't contain details about when rates can go up and the timing of when increases can take place, it's time to update the lease. 

Most renters anticipate a rent increase when it's time to renew. With rate guidelines outlined clearly in your leasing documents, residents know what to expect. Plus, you have protection from a lawsuit if the lease supports how and when you apply an increase.

If you're not sure that your lease covers all of the bases regarding rate increases, a property manager can review it and make sure it's airtight. 

Communicate Clearly and Work With Renters

Not every renter will absorb a rate increase and stay for another lease term. However, with a professional approach, real estate investors can retain more renters while increasing the rent! 

Stay on top of lease renewals and alert current residents to an increase at least 60-90 days before their lease ends. This gives them time to adjust and decide to renew or let you know they are moving out. Don't take a non-renewal as a sign to lower the rent again! If the research and market support an increase, stick with it and find new renters who will love your property and pay what the market says the rent should be. 

Hire a Property Manager to Raise the Rent in Kitsap

The best property management Kitsap offers helps real estate investors navigate rent increases to protect ROIs and retain renters! If you're losing money, let Joseph Group help you analyze your investment properties and adjust rental rates to get you back on track. When you're ready to learn more about how we can help, don't hesitate to get in touch.

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