Rent Increase Guidelines Requested

[Michael Temple]

Ever since becoming a landlord, I have struggled with the concept of rent increases. The short story is I haven't done them. The longer story is that is coming back and biting me in the backside now. Expenses have gone up considerably in the last couple of years and my rents aren't keeping pace. I need to turn this around.

My main question now is getting some guidelines on the amounts other people raise them by and how often? Most of my tenants sign 1-year leases. Is there typically a formula or percentage increase that most people do? Should I do it each time the lease renews?

I had a fellow REIA member say she puts the increase schedule in her initial lease so tenants know from day one how much they will be going up and when. I am afraid that encourages people to start pre-planning to leave if they know they are coming up to the end of a lease and don't want to get hit with an already known rent increase.

Last question, how do most of you present this increase to tenants? Do you say because expenses went up, blah, blah, or do you just say this is what it is and give no explanation?