Can I raise my tenant’s rent every year, and if so by how much?
Q: Can I raise my tenant’s rent every year, and if so by how much? Carrie, Bloomfield, NJ
A: The key to being an effective landlord is knowing your local real estate market, where it is and hopefully where it’s going. While landlords would always like to raise their rents to increase their profits and sometimes to offset increases in their expenses, the market ultimately decides how much rent you can charge. If you charge too much rent relative to similar properties in your area, your property will sit vacant or your existing tenants may move out if they know they can pay cheaper rent for similar digs somewhere else. For this reason I strongly recommend that you monitor market rents where your property is located. You can monitor rents by 1) calling For Rent signs in your area, by 2) checking with local realtors who specialize in rentals, and by 3) looking at rental ads online so you can see what your prospective tenants or current tenants are seeing-in other words become a secret shopper yourself or in this case a secret renter. So to answer your question, you can raise the rent in your property every year if it’s necessary to keep pace with your market, but I’d caution you not to try to get ahead of the market or you may end up with an empty property and no rental income. Thanks for your question, Carrie. Good luck. For more real estate tips and information, visit performanceproperty.com. I’m Gerald Lucas and I’ll see you again soon.