If you’re wondering if it’s time to raise the rent on your Denver area rental properties, the experts at Cobalt Creek Property Management can help you find the answer. Asking for money is not an easy task for any landlord. You worry that your tenants aren’t going to be happy about it or that you’ll lose some valuable, long-term tenants in the process. Raising rent, however, may be beneficial and even necessary for your property to keep generating revenue. Our staff can help you with each step of the process.
How Much To Raise The Rent
In most cases, it’s recommended to raise rent by only 3-5% each year. The most accurate way to know if it’s a good idea to increase rent, though, is to have someone experienced assess rental market values for you. Evaluating certain factors will help you determine whether to keep your raise on the lower end or justify a higher increase. Here are a few things that are predicting a rent increase right now in Denver.
- The average rent is increasing.
- You’ve noticed more interest in your rental units.
- You’ve recently made (or will soon make) improvements to your property.
- New businesses and government services (like libraries, post offices, and schools) have moved into your area.
- Public transportation has expanded into your neighborhood.
Keep Your Tenants Happy
One thing to keep in mind is that rent trends don’t always impact all kinds of rentals equally. For example, demand may increase for studio apartments but not for 2-bedroom units. Consider targeting the types of rentals that you see the most interest in while excluding the units (and tenants) that aren’t affected by the rising trends.
The key to keeping tenants is clear communication with plenty of notice. Adhere to the requirements specified in your lease, and be prepared to offer legitimate reasons to back up your decision. Your tenants may not agree with the changes and leave, but customer service and professionalism goes a long way to keeping the relationship positive.
When To Make The Change
The best time to make the rent increase official is when leases are renewed. Writing automatic increases into your leases also means that you can start new tenants expecting an increase in price. This also gives long-term tenants the ability to budget for the higher rent well in advance, since they know precisely when it’s coming.
Let Us Take Care Of Raising The Rent
If you’re not sure about how to raise your rents in Denver, partner with us at Cobalt Creek Property Management. We handle the market research and communication with tenants, so you always get a competitive market price for your rentals without the hassle. We also handle drafting and renewing your leases to your specifications. Leave the busy part of property investment to us. Contact us today to get started.