What are the steps for raising rent?

[Nicole Candelario]

Hello fellow landlords!

It’s been one year since our tenants have been renting from us and after reviewing the market rents it seems as though we are receiving at least $200/mo under the norm. With that said, our tenants have “not” been the most desirable tenants. Part of that is my fault (I neglected to get a pet deposit from them and pet addendum). I have decided to increase the rent at least $100/mo along with pet addendum & pet deposit. Is there a certain amount of time I have to give them before it goes into effect or should I just put the new amount in the new lease? Any advice is appreciated!! Thank you

Nicole

[Kyle J.]

It varies by state and whether or not the property is in a rent controlled area.  However, if the property is in your state (California) and the property is not subject to rent control (and assuming the initial term of the lease has expired and the tenants are now month-to-month) you can raise the rent by simply giving them notice of the increased rent amount. 

If the increase is 10% or less, you only need to give them 30 days notice.  If the increase is over 10%, you have to give them 60 days notice. 

If you're having them sign a new lease, just put the new amount in the lease.  If you're not having them sign a new lease (i.e. you're going to keep them as month-to-month tenants), you just have to provide them with the notice and they don't even need to sign anything. 

[Nicole Candelario]

Thank you!!!

[Account Closed]

@Nicole Candelario There is currently an anti-gouging statute in effect for much of California, allowing increases of no more than 10%, so unless you check with an attorney first, I would highly recommend a raise of no more than 10%.  That being said, if there are any utilities not being paid by the tenant, you can give the tenant a 30 Notice of Change of Terms, requiring them to pay all utilities (or trash) in the future.  This does not count toward the 10%.  Feel free to PM me if you would like to ask any specifics.

[Nicole Candelario]

Thanks @Account Closed!

[Ian Kee]

I'm not familiar with the laws in your area about raising rent more than 10%, but if you aren't too keen on your tenants anyways, raising rent by $200/month may help coax them out and you get new tenants at a higher rent that you properly vetted. All that said though, make sure you're legally allowed to raise rent more than 10%.