These are great questions. As far as whether you should raise the rent or not...do some market research. What are similar type homes in your area going for? In other words, would your tenant have better options? Remember, it is expensive and inconvenient for them to move...so they will only do that for good reason.
By the same token, if you raise rents and then are going to be well over market, you could lose your tenant and that is always costly. So know your market.
Give tenants a reason to want to stay. What kind of a landlord have you been all year? Do you take good care of the property? Do you perform preventative maintenance? Do you respond quickly to their concerns? If you have been a good landlord, they are more willing to want to stay. Have you contacted them through the year just to see if they are satisfied?
So first thing is that I like to start 45-60 days before lease renewal I congratulate them on coming up on an anniversary. I tell them what great tenants they have been and that I would love to have them stay for another year. Then offer some sort of inducement - that also improves the property.
For instance, maybe it is time to change out the vinyl floors; or paint the interior; or change the carpet. Maybe you want to install ceiling fans in more rooms. You could upgrade appliances. It also helps if you have been listening to the tenant throughout the year...they may have had a recurring problem that you now just replace that item altogether.
When you provide a great home for tenants at a fair price, they do not want to leave unless their life changes. You can raise the rent and ask them to renew the lease without fear. If you have been a good landlord and you are priced competitively and they still move out - it wasn't because you went up a few dollars. Something else changed in their life!
