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Home » Tenant management » A Landlord’s Guide on Raising the Rent Without Losing Tenants

Raising the rent can often feel like walking on thin ice. Although it can increase your rental income, it can also discourage tenants from renewing their lease agreements. Sooner or later, however, you will have to handle a rent increase. It’s an inevitable part of investment property management. Not raising the rent will not provide you with the lucrative investment you’ve been hoping to have. In this article, we will walk you through how to increase the rent on your South Florida property without ruining tenant retention.

Identify Your Reasons for Raising the Rent

Why do you want to raise the rent, anyway? Raising the rent for profitability is a perfectly fine reason. After all, you’ll need to find ways to offset the costs in order to maintain your cash flow. Perhaps your insurance premiums have increased, or you’ve recently hired a property management company. In general, you are legally allowed to raise the rent once the lease agreement ends — regardless of your reasons. Understanding the “why” of your rent increase will help you figure out how much you should increase it.

Review Local Landlord-Tenant Laws

Landlord-tenant laws aren’t the same across all U.S. states. That’s why it is important to refresh your memory when it comes to the rent increase laws in your state. For instance, in Florida, if your tenant is on a month-to-month lease, you can increase their rent at any time as long as they’re given a fifteen-day notice. In California, on the other hand, landlords can only increase the rent once every twelve months, provided that they’ve received a ninety-day notice.

To ensure that you don’t get in legal trouble, consult your property management company’s in-house counsel.

Calculate How Much to Raise the Rent

Calculate How Much to Raise the Rent

You can’t just raise the rent to any amount you can conjure. You’ll have to determine the amount of the increase by considering the following factors:

  • Other rental properties. If rental properties that are similar to yours are raising their rent, you can increase yours, as well. A property management company can help you compare prices in your area.
  • Your rent shouldn’t be based solely on the price of similar properties. You need to ensure that you’re still profiting off of it. Raise it to an amount that’s sufficient to offset your costs.

It’s important to note that some states can limit the amount of the increase. For instance, the rent increase is capped at five percent in California, while it’s capped at seven percent in San Francisco. Fortunately, the rent increase is not capped in South Florida.

Determine When You Should Notify Your Tenant

This is something you have no control over. Your state laws will determine when you should inform your tenant of the rent increase. In most states, the minimum is one month’s notice. In Florida, property investors must serve month-to-month tenants a fifteen days’ notice. If this information can’t be found in your state’s statutes, refer to the lease agreement. It should specify how far in advance the notice should be served.

Informing your tenants in advance gives them time to weigh their options. Should they stay or should they rent somewhere else? You can also consider giving them incentives to encourage them to stay. If they decide not to stay, at least you can start listing your property so you’ll already have a replacement tenant when they move out.

It’s worth mentioning that you should also send a written notice. That way, in case a tenant claims that they were never aware of the rent increase, you’ll have solid evidence. Alternatively, you could send the notice through a tenant portal.

Explain Why You’re Raising the Rent

Explain Why You’re Raising the Rent

Don’t settle for a written notice — that’s too impersonal. Treat your tenant with respect by scheduling a meeting where you can tell them why you’re raising the rent. Relay the reasons concisely so that there’s no room for confusion. If they attempt to negotiate a lower rate, it’s up to you to decide if you should accept their offer. That’s why we recommend hiring a South Florida property manager. They will act in your best interests so that you don’t end up with a bad deal.

And while you don’t have to show them the calculations, you should prepare well-thought-out answers. That way, you can prove to your tenant that you aren’t pulling the amount out of thin air.

If your tenant complains, here’s what you can do to approach their frustration:

  • “I don’t see the need to raise the rent”. If your tenant says this, list the reasons why you’re raising the rent. Tell them that maintenance costs, utilities, mortgage, etc. are going up. Mention the improvements that you’ve added — the ones that increased your property’s value. Remind them that raising the rent will allow you to continue providing them with maintenance services.
  • “The rent increase is too much.” This is why you should compare properties. Help your tenant see the amount of your rent increase is actually more competitive compared to others. If they feel that they’re getting a deal, they’ll be more open to a rent increase.

Add a Rent Increase Clause

Some property investors include a clause in their contract to avoid having to deal with the dilemma of a rent increase. For instance, the lease agreement could include a clause stating that the rent will increase by 3% to 5% annually. That way, when the tenant/s sign the lease, they are already aware of the incremental rent increase. Hence, tenants that aren’t open to a rent increase will be “weeded out” early on.


No tenant will want to pay more, however, if you can raise the rent properly, you can benefit from better profits. As long as you accurately calculate the amount of the rent increase, and you serve your tenants an advanced notice, the rent increase can be more “palatable” for them.

A full-service property management company such as Luxury Property Care can help you determine the amount of the rent increase. We’ve served South Florida for more than a decade, allowing us to truly know the market. What’s more, we’re trained to handle tenant-related matters, which means we can help your tenants understand why a rent increase is necessary.

Call us at (561) 944 – 2992 or complete our contact form for more information.

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