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How to Raise Rent Without Losing Tenants

10-12 min

July 4th, 2025

As a landlord, now and again, you may be required to increase the rent. Property taxes may go higher, maintenance costs also increase, and inflation makes it difficult for you to get any profit out of your investment. That said, there is also the fear that if you raise the rent, you will lose tenants. This might be bad for you in this competitive market, where turnover can be time-consuming and costly.

Luckily, there are ways for you to raise the rent without driving your tenants away, but only if you do it right. With good communication, timing, and the correct strategy, hiking up the rent can be fair. If you take thoughtful and professional steps, your tenants could even find it acceptable. In this article, you can find out more about how to raise rent without losing tenants.

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Before you even consider hiking up the rent, you’ll have to check the law and market boundaries in the area. If you ignore them, forget unhappy tenants and casual disputes; you may end up with legal penalties on your hands.

For example, some cities or states have rent control policies that set limits on how much you can raise the rent. Plus, even if you are technically not in the rent-controlled area, there may be clauses in your contract that pose restrictions on lease increases. For instance, places such as New York have an annual cap, whereas other cities let you increase the rent with each renewal.

You need to understand what’s allowed and what’s not in your local jurisdiction. Some work on month-to-month leases, whereas others can come with annual leases. The regulations can change depending on whether you are dealing with mid-term or long-term rental properties.

It’s important to check up on proper rent increase notice periods and lease renewal timing. For the most part, it’s around 30-60 days, depending on how long the tenant lived there. You can use tools such as REI Lense to check up on trends in the area, thus making sure you choose an acceptable rent increase.

Know When to Raise Rent

When it comes to hiking up the lease, timing is everything. If you get it wrong, this can cost you a tenant. However, if you get it right, it improves your chances of appearing reasonable rather than just opportunistic.

Try to time this together with lease renewal periods. After all, both you and the tenants are thinking about potential plans. This gives them enough time to consider their options while avoiding pushback. Let the rental market guide you here. If rent increases in the area, tenants are less likely to leave if you still have a competitive rate.

Steer clear of mid-lease increases, unless the agreement specifically allows it. Not only are they not received well by tenants, but they’re usually not legally allowed. It’s risky because your tenant can find it unfair and leave, and they could also sue you.

Communicate Early and Transparently

As a landlord, you don’t casually call your tenants and tell them the rent’s going higher starting next month. You have to give sufficient notice before you do that. For the most part, it’s around 30-60 days, which gives your tenants plenty of time to breathe and assess the situation.

Some good tenant retention strategies include telling them why you decided to increase. If you just do it without saying anything, they will think you don’t care about anything but the money. However, if you tell them it’s due to increased market costs or property tax hikes, they will be more likely to understand and accept the change.

Make sure to be professional, polite, and empathetic when you approach the conversation. Use clear, non-confrontational language when delivering the message. If you sound cold and inflexible, they will be less likely to cooperate with you and will likely look for other places to live. A little bit of empathy goes a long way.

Offer Value Alongside the Increase

If you’re thinking about how to keep tenants happy despite a potential rent increase, consider offering them value. They’re less likely to show resistance if they feel like they are getting something extra in return. This could be small upgrades such as fresh paint, new appliances, or better responsiveness for maintenance requests.

Consider offering them flexible payment methods or tweaks to the lease terms. For instance, 15% of tenants hide their pets from landlords because the original contract didn’t allow it, leading to tension.

If you suspect your tenants have a pet but you let it slide, consider adding a pet-friendly clause to the contract. You could also consider offering them multiple rent payment methods, such as autopay or online portals, to make matters easier.

Emphasize stability and reliability as benefits if they decide to stay. Remind them of how you responded to maintenance requests and neighborhood safety. Point out the peace of mind they get when staying in a well-maintained home. Tenants, especially those looking for long-term collaboration, like that.

Follow Fair Rent Increase Percentage

When push comes to shove and you have to kick up the prices, you may end up wondering: how much can a landlord increase rent without reaping dissatisfaction?

Here’s a rule of thumb: consistent small increases are more effective than occasional dramatic raises. The former type is more predictable, whereas the latter could end up shocking the tenants.

For the most part, a 3-5% hike every year is seen as acceptable in most markets, assuming you didn’t make any major upgrades.

For instance, if you add a 4% rent increase to a $1,500 lease, it hikes up the monthly payment to $1,560. Tenants will be less shocked compared to leaving them alone for a few years and then suddenly hiking it up to $1,700.

Keep in mind that seeking a reliable tenant is more important than aggressively raising the rent for profit. If they leave, you could end up dealing with vacancy periods, repairs, marketing, and tenant screening.

Rental scams are also on the rise, which can put you in a bind. If you manage to retain a reliable renter, even if it’s technically at a lower rate, you can have better financial stability in the future.

Long-Term Relationship Building

An average of 61% of employees leave because of poor internal communication. This applies to rental agreements as well, since this is a business transaction, after all. Failing to build a long-term relationship with your tenants leads to lower retention. This causes high turnover costs, unstable income, and more headaches than necessary.

Good communication and fairness result in longer-staying tenants. They are more likely to stay with you if they feel heard and respected. Focus on being responsive to maintenance costs and offering transparency about potential changes.

When you adopt this kind of fairness, you let them know that they are more than a rent check for you. In return, they’ll be more likely to take care of your property and adopt an understanding attitude around adjustments.

As a landlord, you should think long-term and not seek short-term profit. A bigger rent hike could look good on paper, but it can lead to a vacancy if it backfires. Even if your rent is slightly below the market rate, it’s more profitable than dealing with constant turnover. Loyalty goes a long way and keeps your investments steady.

Rent Increase Letter Template

If you’re unsure of how to notify tenants of rent increase, here’s an idea: use a professional letter template. This helps you avoid tension and confusion while keeping you from accidentally saying the wrong thing, in the wrong tone. You can personalize and send it via mail or email, whichever works for you.

The top of the letter should include things such as your name, address, phone number, email address, and date. Next should be the name of the tenant along with the address of the property (your property) they live in.

Be polite yet professional, expressing your gratitude for the collaboration, and tell them about the rent increase. Adopt an empathetic tone and make sure you give the appropriate reasons for the price hike. Invite them to reach out if they have questions.

Make sure that the letter is polite, respectful, and easy to understand. A well-written letter reduces the chances of potential misunderstandings, reinforcing your relationship with the tenant. Most states require you to send out this type of written notice, anyway, some 30-60 days before the increase. This helps you ensure you meet the local regulations.

The Bottom Line

Rent increases shouldn’t mean the loss of a tenant. If you are smart about it, you can keep your collaboration in the long term, nurturing your relationship. Focus on things such as value-driven changes, clear communication, and proper timing. You want to plan ahead while being respectful of your tenants.

Tools such as REI Lense can help you conduct an investment analysis on the property. This way, you can set up a sustainable rent raise plan that won’t drive your tenants away.

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