Write A Friendly Rent Increase Letter

If you are like me, you are a landlord who always prefers having tenants renew their leases year after year. Along with ensuring a steady stream of income, I can attest it makes life as a property owner much simpler. However, as has been the case with other landlords, I've found it necessary now and then to increase the rent for my tenants. While it's not something I enjoy doing, sometimes it just has to be done. When these times do roll around, I have always found that by using a rent increase letter that has a very friendly tone, tenants respond much better to the impending rent increase. If you are preparing to notify your tenants of an increase in their rent, here are some of my best tips for writing a friendly yet effective letter.

 Just like soldiers never enjoyed getting a "Dear John" letter from back home, I can assure you your tenants will not enjoy receiving a rent increase letter from you that starts out as "Dear Tenant." Along with sounding very impersonal, it will immediately signal to the person reading it that it contains bad news, which will also put them on the defensive. To avoid getting off to a bad start seconds after the tenant has the letter in their hands, I make sure to personalize each letter by using the tenant's name in the greeting. Also, I like to use the phrase " Change in Rent Notice" rather than "Rent Increase Notice," since the latter sounds more like I am ordering them to obey me. 

 If there is one thing I've discovered over the years, it is that by explaining to tenants why the rent will be increasing, most will realize it is something that is necessary and thus agree to renew their leases. If you fail to offer your tenants an explanation, it often appears as if you are just being greedy and trying to get every dollar out of them that you can month after month. However, when I've explained in previous letters that the rent increase is due to raises in city fees for which I have no control over, that it is needed to cover the costs of various improvements I plan to make to the property, or to pay for many conveniences the tenants currently enjoy, most of my tenants have been very understanding. Though you may lose a few tenants, statistics show that almost 80% of renters generally either automatically plan to renew their leases or are considering doing so, making it likely a friendly letter from you will result in a tenant who stays put for another year.

 If you are like me, the last thing you respond to well is being told you have to do something no matter your feelings about the subject. This concept will also apply to your tenants when being notified of a rent increase, especially if you send them a letter that is more of a demand than an agreement. In my experiences when increasing rent for my tenants, I've always felt that if my letter was transparent from start to finish as to why the increase was needed, it became more of a discussion between myself and my tenant, rather than me coming off as an overbearing landlord threatening to evict them if they don't agree to my demands. 

 As I can attest in my many years of interacting with tenants, the words "thank you" go a long way in making tenants feel appreciated and being very willing to work with you when rent increases become necessary. Just like other situations in life, thanking someone for doing a good job, or in this case, being an excellent long-term tenant, almost always leads to getting the desired results. By including a word of thanks in your rent increase letter, you are conveying your appreciation to that person for choosing to live in one of your properties. This is important, since it is possible to sometimes forget that tenants do have many other places where they could choose to be living. 

 Even when I have clearly explained to tenants why I am increasing their rent, most usually have a few questions they would like answered. However, if you fail to include in your letter an invitation to have your tenants get answers to their questions, you are creating a situation where some tenants may feel too intimidated to approach you with their concerns. If this happens, you likely will lose more tenants than you would have otherwise. To keep this from happening, I always recommend including a section in your letter telling your tenants not to hesitate to contact you with their questions. By showing yourself as a property owner who is willing to be transparent and engaging with tenants, I guarantee the rent increase will go over much better than you anticipated.

 When I have been busy composing a rent increase letter, I sometimes make the mistake of leaving out some of the vital information that any rent increase letter should include. While I of course recommend you focus on calling your tenant by their name, giving them the reason for the increase, and thanking them for being a good tenant over the years, don't forget to include such details as your name and contact information, the date the letter was written, how much the rent will increase, when the increase will take effect, and the tenant's current rent. In some of my letters, I've also included a section at the bottom where my tenant can indicate they either agree to the terms or do not and thus will vacate by a certain date. By doing so, this makes the letter akin to a contract and also allows my tenants to clearly spell out their intentions.

 While it may take me a little more time to do so, I always try to hand-deliver my rent increase notices if at all possible. In doing so, it demonstrates that I am not simply some landlord who is not willing to meet tenants face-to-face and have clear, honest conversations with them when necessary. Instead, it gives me the chance to not only check in with my tenants but to also take a few minutes to answer their questions, listen to their concerns, and tell them how much I appreciate each of them. Since so many aspects of today's world have grown more and more impersonal, using the personal touch exhibited by hand-delivering my rent increase letters often breaks the ice and allows for fruitful and thoughtful conversations with my tenants.

 All the Best

 When ending a rent increase letter, I always use what I consider to be a very personable closing, such as "all the best," "sincerely," or "thank you." By doing this, instead of just signing my name at the bottom, it helps me end the letter with a bit of warmth and politeness, rather than a cold and impersonal ending. After all, since the topic of the letter is not exactly one that will make most tenants turn cartwheels and shout for joy, ending it on a positive note will hopefully take some of the sting out of the impending change in rent. 

 While I always want to make sure I have clearly explained to my tenants why their rents will be increasing, I also strive to keep my letters as professional as possible and also concise and to the point. While this may sound contradictory to writing a friendly letter, I can assure you it is quite easy to do so when writing such an important letter. In fact, I've usually found most of my tenants appreciate a letter that quickly gets to the point. Therefore, rather than find yourself writing a letter that rambles on and on about this and that, do like I do and try getting to the point as fast as you can. Once you do, then you can spend the rest of your letter-writing time, making sure it has the kindness and empathy needed to ensure your tenants will choose to stay as your tenants.

 Make Good Use of Property Managers

 If you've already got plenty to do or maybe just don't consider yourself to be great at handling such issues as rent increases, consider hiring an experienced property manager to manage your properties. As I've found over the years, a good property manager who can get along well with tenants, establish clear channels of communication between you and your tenants, and handle the hard areas such as rent increases and turnovers can make all the difference on a day-to-day basis. 

 By keeping these tips in mind, I am sure your next rent increase letter will be applauded by your tenants for its warmth, kindness, and clarity.