For many landlords, raising rent can be a difficult situation to tackle and often a pain to implement. Depending on how much the rent will be increasing, there could be a slew of issues that follow which many property owners would prefer to avoid. However, raising the rent in some cases is not only fair, but necessary to keep up with real estate market rates and the growing local economy.

But when is the best time to raise rent? If you’re a landlord that is a bit ahead of the curve and you have already hired an experienced local property management company, you should definitely consult your property manager on rent increases. Otherwise, below are some of the best times for landlords to consider raising rents, the reasons why, and the best processes to utilize when doing so.

Local Real Estate Market Rates Are Up

The real estate market can be turbulent, especially in cities that experience heavy population changes. When housing supplies are short and demand is high, local real estate market rates are sure to be on the upward swing. The opposite is also true when supplies are in abundance and demand is lackluster. For a property owner, staying on top of local market trends and vacancy rates is vital in order to know whether or not your rental rates are on par with the competition. This may involve some research to see what comparable properties are charging for their rentals, but it’s definitely worth the effort if you discover you’re underestimating your property’s potential/value.

During Neighborhood Enhancements

Another aspect all landlords should take into consideration are the neighborhoods in which their properties are located. Have there been recent local improvements that could potentially enhance the value of the neighborhood? It could be something as simple as a new grocery store, gym, or restaurant opening nearby. Perhaps it’s a new school, post office, library, or other service which can have a major impact on the value placed on a particular neighborhood. When all these enhancements stack up, potential tenants are always willing to pay for the convenience of being close to these amenities. When your neighborhood is undergoing obvious improvements, it could be the ideal time to raise rents.

The Local Economy is growing

The health of the economy is typically one of the strongest indicators of what tenants are willing to pay for rent. When the economy is growing, this generally translates to more jobs, higher paychecks, and an increase in disposable income. As a result, it makes financial sense to capitalize on the opportunity by increasing your rental rates when the local economy is strong. Raising rent should be a well thought out decision based on logical timing, not simply when you need extra money for a DUI lawyer Las Vegas or that dream vacation you have wanted to take. When local companies expand their operations or new businesses move into the area, there will inevitably be new, open positions which those organizations are hoping to fill. This could be a major draw for potential employees, prompting the desire for them to move to the area and increase demand for surrounding housing rentals. This combination makes for great timing to increase rental rates.

After Property Improvements

Raising rent to reflect the added value of property improvements is one of the easiest ways to justify the increase. Because the improvements are obvious and tangible, potential and current tenants are able to see and experience these upgrades. Examples of these improvements may include putting in new flooring or carpet, upgrading the HVAC systems, the addition of new community spaces (like a gym, clubhouse, or outdoor barbeque area), upgrading landscaping, and increasing security efforts. If your property offers more than your previous competition, it’s only reasonable that tenants pay more for these added amenities. Additionally, this will also help cover the cost of the improvements made.

What is the Best Process When Raising Rent?

Increasing rental rates needs to be approached methodically and decisively. It is common for landlords to get some pushback, which is why it’s crucial to have an ironed out process in place when it’s time to raise rent. Here are some important points for Las Vegas property management experts and landlords to consider before raising rent, according to Nevada law:

• Monthly tenants must be advised of rent increases by written notice at least 45 days before the increased rate is due
• If a tenant’s rent cycle is less than 1 month, the tenant must be given at least 15 days advance notice
• A landlord may not increase rent as an act of retaliation to a legal complaint or citation from a tenant
• An increase in rent must apply in a uniform manner to all tenants
• If a tenant is under a lease agreement, rent cannot be increased until the end of the lease period

If the landlord’s increase to the rent does not violate any state laws, the best approach is to give all tenants fair warning, be familiar with your rights as a landlord, and stick to your decision without exceptions. Any exception made can be interpreted as discriminatory to the other tenants and can be legally detrimental to the landlord in the end.

How a Property Manager Can Help Implement Rent Increases

As any reputable property manager can tell you, it’s important to stay competitive and relevant in the real estate market. If you’re considering raising your rent, bringing your price up to the going market rate is both appropriate and expected. Of course landlords should always take into consideration state regulations, how your current tenants will respond to the raise in rent, the justification factors, and how you will implement the increase.

The property management experts at Black & Cherry are specialists when it comes to tenant services. Communication between landlord and tenant is so essential when raising rent and needs to be done with both sensitivity and professionalism. Black & Cherry can make sure you are adhering to all state laws and requirements, while also implementing the most effective process to successfully increase your rent with as little disruption as possible.