Raising rents in Chicago

[Alejandro Ferrer]

Hey all. If you have a inherited tenant who’s lived there for 5+years and is on a 6 month lease ending end of august. Rent is below market and want to increase at least 50$ for now. Going to give a 120 day notice before end April. How long do you tell them they have to give an answer? What if they don’t agree to the new rent increase? And what if they do agree at first but come almost end of lease and they don’t agree anymore? Is it required to have them sign the notice? 

Thank you. 

[Nathan Gesner]

Quote from @Alejandro Ferrer:

Study the market and make sure you know what your property is worth. From what I've read, rent rates are up 8% over last year in Chicago and probably up 20% or more in the last five years. You may be farther below market than you think.

Second, most tenants will not move over a small increase like $50 a month. That's only $600 a year. If they were to move, they will need to save up for the first month of rent, deposit, and moving expenses, moving truck, the labor, possibly time off work, etc. Is that really worth $600?

Third, I would give them notice no more than 60 days prior to the lease ending. I give them one week to respond in writing that they intend to renew for a year. If they don't respond, then I send them notice that their lease will end at 11:59PM on [DATE] and provide instructions for moving out. If they agree to a one-year renewal, then I send them the new contract - or an extension letter - and give them a week to sign and return it. Once they do, they are contractually obligated. If they don't, then I send notice that they failed to meet the deadline, the offer for renewal is rescinded, and I start marketing the property. I don't let tenants drag things out or play games with me.