How To Use Strategy And Intelligence To Raise The Rent Without Any Friction
There are ways to raise your tenants rent fairly painlessly. The very first step you need to take is to find out if you are even able to raise the rent. Once a tenant has signed a lease the amount of the rent becomes fixed for the length of the lease. Until the lease has come to an end the rent can't be raised. This is the reason rent is most commonly raised when a tenants lease is renewed.
Leases and agreements that run month to month are different. As long as you have provided the tenant with 30 or sometimes 60-day notice you can probably raise the rent. The landlord tenant laws in your state need to be checked to establish the length of time required on a notice to change the lease. You must also check your local laws if the lease is in an area with rent control. These prices are controlled by the government and chances are you will not be able to increase the tenants rent.
An effective trick when increasing the rent is not to tell the tenants the amount of the new rent. Instead give them three different options to make their choice from. Most large businesses have three separate tiers regarding prices. Some businesses use small, medium or large. Others offer basic, premium or platinum. Another choice is bronze, silver or gold and finally there is regular, premium or plus.
The reason companies like real estate Virtual Tours offer different choices is because most people will make their decision from those choices instead of looking at the prices offered by another business. An excellent example is Starbucks. Their coffee is incredibly expensive but they provide options for their customers. They offer a choice of Tall, Grande and Venti so it is rare for anyone to even think about the fact that the diner down the street has coffee for just $0.99. They choose from the available options at Starbucks. The different tiers of pricing have been designed to remove people’s attention from the price. They simply choose the option that fits the price range they are willing to pay.
What most people never consider is the Venti only costs Starbucks slightly more to make than the Tall. All the tiered pricing really does is allow Starbucks to make an even higher income. Certain individuals will always want the premium option just as others will always select the option for regular. This is how Starbucks manages to make a profit on every single customer they serve yet still gives their customers different choices. The same thing can be accomplished regarding raising the rent.
Even with this strategy in place there will always be some tenants who will complain because their rent was increased. The rare tenant may actually decide to move somewhere else. Most tenants will simply figure it is a basic reality of renting. Real estAte realizes that over a period of ten years rent is continually raised on numerous tenants. Most tenants will accept the new rent and complaints will not be common. Sometimes if you do receive a complaint you can work with the individual. You can offer a solution such as offering a longer period of notice before an increase in the rent is actually implemented.