Reasonable Rent Increase Percentage – Average Annual / Monthly

Around every region of the world, landlords face different problems with their tenants and it is difficult to decide whether they need to increase the rent or not. It is the most common problem among all landlords and there is also a way through which you can solve all your problems and your tenant will also be happy with the decision.

The annual increase in the rent is the safest method for the tenants because rent will increase according to the rate of inflation and tenant can make an effective arrangement for this problem. Do you also want to know a Reasonable rent Increase Percentage? If yes, then you are in the place where you will find the best ways to increase the rent and your tenant will also satisfy with your plan.

But the most difficult scenario is this when you pay rent on monthly basis, for this purpose as an investor you need to increase the rent percentage which also feels reasonable to your tenant. So, let’s get into the further details!

Reasonable Rent Increase Percentage

When do you need to raise the rent percentage?

According to the standard annual rent increase in percentage is somewhere between 3 to 5 percent of the actual rent value, there are many appropriate times in which you can increase the rent percentage. Keep in mind that you don’t need to specially raise the rent percentage for each new year.

Most of the tenants will be in the mid-lease at that specific point, so to increase the rent percentage you should need to wait until the lease time is complete. Moreover, if you sign the lease time for one year with your tenant, then after one year you will be able to calculate increase the rent percent if you want.

Keep in mind that this is the annual rent increase and it will help you as an investor to compete with other housing markets also it will ensure you that you are never undercharging.

Why do you need to raise the rent percentage increase at all?

Multiple general expenses are associated with the owning property and they will change from year to year. Keep in mind that rent percentage will be different every year due to differences in interest rates on your mortgage and taxes. For this purpose, investors need to change the rent percentage.

To protect your rental property investment, it is one of the easiest and safest ways to do is to raise the rent percentage. Also, there are some essential things, which are according to the competitive standards, including:

  • Mortgage payments
  • Property taxes
  • Maintenance and Repairs cost
  • Insurance and management fees 

If you don’t raise the rent percentage then it means you are eating your profits. For a reasonable rent percentage, you also need to give a standard facility to your tenant.

How you can find out about a reasonable rent increase?

Keep in mind that any rent increase or raise must come to you in a hard copy or writing paper. The standard rent increase percentage letter will include the following things:

  • Date when the rent percentage will increase
  • Date of the notice or letter
  • Address of the property
  • Current rent cost
  • Total amount of the rent after an increase in the percentage
  • Renter name
  • Landlord or property manager name and contact information
  • New amount of rent owed every month(if you pay rent monthly basis)

What are the core factors which directly impact the rent increase percentage?

The location of your buildings or home rents varies between different areas. There are multiple reasons for a landlord or a property manager to increase the rent percentage, including:

  • Higher property taxes
  • Increase property value or unit up-gradation.
  • General inflation.
  • Costs of necessary repairs.
  • Market factors changing

Frequently Asked Questions

1. If The tenant is on a one-year lease, then how much notice is required to give a rent increase percentage?

Answer. The rent of the property can be increased with at least two months written letter.

2. Can a tenant object to the increase in rent percentage?

Answer. Yes, the tenant can object to the rent increase percentage. There is a proper way to make an application to the investor or the property manager within a specific time. 

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