Hey Youtube,

Welcome to another Mentorship Monday and today's question is a good one. Long time Mentorship Monday viewer Jacob wants to know "How do I raise rents without my tenants hating me?". Great question! Thanks Jacob.

So, how do you go about raising rents without your tenants hating you?

Here's the deal. You job first and foremost is to be a fair landlord who provides your tenants a quality place to live, takes care of maintenance issues in a timely fashion and treats them with respect. Even if you check off all the boxes, there's still going to be some tenants who just don't like you. But that's there decision, some people just aren't happy with anything you do. The best thing to do is detach yourself from that situation. It's your tenants decision to be happy or not.

Next, if you want to raise rents then create a value for the increase. Examples of that would be a list of expenses such as, inflation, taxes, maintenance, insurance, etc. You get the point. Have some type of justification for why you're increasing the rents. We try to on average raise our rents about 1% 3% per year.

When you do finally decide to increase rents, what we do is send a lease renewal. We make it simple, just a 1 page letter that states the changes for the following year. Your tenant can sign off and it then becomes an addendum to the lease agreement. For this process you don't have to send over a whole new lease, some do, but it's not necessary.

Now, if you want to increase the rent significantly because you notice that it's way under market value, in this case offer improvements. We call these "Light Upgrades" examples would be installing ceiling fans, counter tops, flooring, new vanities, shower heads, etc. These are bigger changes that can be done while the tenant is still living in the unit. Some are a little more difficult than others like flooring, but the rest are quick and simple changes that will significantly increase the value of the unit.

Now if you're looking for an even bigger return, your best bet would be to wait until the tenant moves out and the space isn't occupied anymore. Then you can make major bigger changes and bigger renovations. Hope this helps! Have a Great and Profitable Week!

As always, please email us any real estate questions to [email protected] and we will answer them on an upcoming episode!

Learn more about The DeRosa Group at http://www.DeRosaGroup.com or on BiggerPockets.com https://www.biggerpockets.com/renewsb...
Matt & Liz, founders of DeRosa Group, were recently secondtime guests on the BiggerPockets Podcast.

Check it out: https://www.biggerpockets.com/renewsb...

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