| Being a landlord is difficult—like all businesses where | | | | included in the process if you share some of your |
| collecting money from people is part of the job | | | | struggles. In your letter, which should be sent to your |
| description. But, in order to be successful as a | | | | tenants a couple of months before the rental increase |
| business, landlords need to cover their own costs and | | | | is to take effect, you should candidly explain that |
| earn a profit every month. This means, with | | | | increasing costs have forced a corresponding increase |
| perennially-increasing insurance, tax, and housing | | | | in rental rates. |
| association rates, a landlord must periodically increase | | | | What's stated above is an oversimplification. Without |
| the rental rate to maintain the profit margin he has | | | | lying, you want to overstate the increased expenses, |
| established (that's business). But how do you hike up | | | | while understating the increased rent. In other words, |
| the cost of living every year for your tenants without | | | | make sure the letter includes whatever increases you |
| driving them off and having to search for more | | | | face (sometimes it's helpful to include things like the |
| (absorbing the cost of rent in the meantime)? Here is | | | | actual HOA dues, which may be $250/month, or the |
| a simple strategy for doing just that. | | | | fact that insurance went up by 5%). Then, mention to |
| First of all, it helps to have a history of being a friendly | | | | the tenant that the good news is the monthly rent will |
| and reasonable landlord. It should go without saying | | | | only be increasing by whatever amount you choose, |
| that this strategy is less likely to work if your tenants | | | | say $40/month. You can explain that the rental |
| hate you from the onset. | | | | increase does not fully cover all of your new |
| The best way to approach a tenant is with sincerity | | | | expenses, but you are willing to absorb the blow as a |
| and transparency (or at the very least, it should appear | | | | trade-off to maintain this particular tenant. If your |
| that way), in the form of a written letter. If it's not too | | | | letter makes them feel as though they are wanted, |
| far from the truth, be sure to express what a pleasure | | | | and that you are working to keep them there as |
| it is to have them as a tenant—how they are | | | | opposed to making a quick buck before driving them |
| pleasant, pay on-time, etc. While your letter doesn't | | | | out, then your tenants will be much less likely to gripe |
| have to tell them everything about your business and | | | | about the hike in rental rates. |
| its expenses/earning, it often makes the tenant feel | | | | Tell us what you think.investmentpropertymadeeasy. |