My Tenants Thank Me for Raising Their Rent.

     If you are going to be running a profitable business you are going to need to raise the rent. Hopefully, you do it on a regular basis. Tenants don’t always appreciate it. It is not often convenient. (What bills of yours do you look forward to seeing rise?) Some will claim not to understand it but most do. They know their other bills are rising. Is the rent rising faster than their cable bill? How about their cell phone? Probably not.

     How do I make it easier when it is time?

     I maintain my properties well and respond quickly to tenant requests. I always make necessary repairs quickly—usually within a day or two, sometimes, same day. I don’t always make the upgrades the tenant requests but I always respond quickly to the request, discuss the cost, and explore if the tenant wishes to share the cost. Sometimes they agree to. Sometimes they agree to a rent increase to help cover the upgrade.

     I appreciate my paying tenants and let them know that whenever the occasion arises. I don’t make phony contacts to schmooze them but if I have to contact them through the course of normal business I make sure they know they are important to me. I often delay rent increases for long term tenants. If the last increase came after a year I may wait 14 months to discuss the next increase.

     I inform my tenants about tax increases, extra millages for road repairs, the zoo, the art museum, bus service, increased landlord registration and rental inspection fees, etc. Sometimes they know the measures passed. Often, they voted for it. They frequently think someone else pays for it (i.e. me). Sometimes they didn’t know about the new fee. I let them know how much my taxes rose and explain that I cannot bear increases indefinitely—on my own.

     Most importantly, I make them a partner in the implementation of the rent increase. If I wish to raise the rent $30 a month I may let the tenant know that I am considering an increase of $50 and I ask them if they will be able to handle that. Sometimes the tenant understands and agrees immediately to the increase. (Those are usually my best tenants—they earn a significant delay until I ask for another increase.) I thank these tenants.

     Sometimes they tell me that money is tight and ask if I could delay the increase for a couple months. They often tell me of the difficulty they are going through. I try to sympathize with them. I often agree to the delay, making sure we are clear on when the increase will take effect. The tenant usually thanks me. I usually thank them back.

     Sometimes they say they can’t afford that much. I will ask what they can afford. If they say $30 or higher I will accept and the tenant thanks me. I usually thank them back.

     Sometimes those who plead poverty are also those who pay late fees of $50—$150 almost every month. (I wrote another blog about how I learned to deal with these types of tenants:

My Liquid Fund. How I Learned to Embrace Late Fees and Become a Better Landlord.

For these tenants I add up all the late fees they have paid since the last increase and explain that they would save money, even after the rent increase, if they simply paid the rent on time. They have, after all, been paying more rent than they needed to already. I explain that I would prefer to receive the rent on time than have to collect the late fees, file notices to quit, etc. Sometimes I get a thank you from even these tenants but not as frequently.

     How do you implement rent increases?

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