The need to raise your rental rate to cover the expenses of running a well-maintained rental property has always been a hot-button—if not outright contentious—issue between renters and property owners. Unfortunately, the rising cost of rent often paints landlords in a cold, uncaring light rather than being an opportunity to highlight their own humanity and debts. As an expert in Parrish property management, we've seen how the COVID-19 crisis has only made this perceived divide between renters and property owners wider than ever nationwide. However, the reality is that property owners and renters are two sides of the same coin.
Rent strikes from the perspective of a tenant who has suddenly found themselves unemployed through no fault of their own while feeling the pressure to meet the cost of their housing make sense. When you suddenly fear you may not have a roof over your head tomorrow while being forced to stay home, that understandably would make anyone anxious. However, even the strikers have acknowledged that there is a dilemma when it comes to addressing how the shortfall from "canceling rent" should be handled.
The majority state that, instead of punishing small-scale, mom-and-pop property owners (who encompass roughly half of all rental property ownership), the government should foot the bill. As most property owners who survived the 2008 housing crash know, the government is more likely to bail out the banks than save them from the demands of their mortgage. The reality that you face as a landlord is stark: when you can't afford to pay your mortgage, everyone loses. You no longer have a rental property to offer—and your renters no longer have a home.
To combat this potential outcome—even though the politics surrounding it are tense right now—property owners in Parrish occasionally have to raise the rent in order to meet their expenses. If you're a Parrish property owner wondering exactly how to do this safely in our current economic and political climate, follow these tips from the experts in Parrish property management to guide you through.
A quick note: The following article is not a substitute for legal counsel. If you need immediate guidance for successfully managing an increase in your rental rate, turn to the Parrish property management experts at Gulf Coast Property Management for real-time assistance!
Act Based on Your Lease
We've already touched on exactly what Parrish property owners stand to lose—beyond profits—when they feel trapped in their current rental rate. However, to safely raise your rates and bring your property price back up to what the market suggests you should be earning from your rental, you need to consult what you've written into your lease.
If you've written a percentage ceiling into your lease, say, a maximum increase of 3-5% during each renewal as needed, you can always play within that amount at your discretion. Regardless of the number, the terms of a rental increase should always be easy to find within the lease and explained to your renters at each move-in. Transparency in this, as with most things, prevents unpleasant surprises for your residents down the road. The speed at which you raise your rates also matters: slow and steady wins the race—and is more likely to keep your properties occupied.
If you haven't written your expectations for a rental price increase into your lease, this is a smart thing to overhaul as part of your ongoing crisis management plan moving forward. As a property owner, you can't afford to trap yourself in a corner for twelve months at a time if you primarily operate using a year-long lease. Working with Parrish property management to overhaul and update your leasing language is a smart move that will continue to serve you well long term!
Your partner in property management also affords you a research opportunity to find your ideal rent rate—often for free—in the form of a rental analysis. A rental analysis gives you a target to aim for with your property price so that your percentage increase makes sense. If you've been unknowingly undercharging for your property for years—say, $1,200 instead of $1,750—a property manager can not only help you find this ideal rent rate but help you craft a plan to reach it slowly through careful rate increases.
That extra $550 a month certainly seems appealing right now, with income uncertainty a reality for many. However, if you raise your rate too quickly, you risk scaring off a great renter and facing the staggering expenses paired with property turnover in Parrish.
Turn to an Expert in Parrish Property Management
If you're feeling anxious about how to approach this issue as a property owner in the wake of the COVID-19 crisis, we're here for you. At Gulf Coast Property Management, we've been serving landlords in Sarasota and Manatee Counties since 2003. This gives us the unique perspective and expertise of a property manager who has served property owners in just about every kind of economic climate.
We can help you design a plan to increase your rental rate safely and effectively while still maintaining the great relationship you have with your renters! The perfect place to get started is by taking advantage of our expert resources and requesting your free rental analysis.