What Is a Rent Increase Letter?

A rent increase letter is basically a formal letter that announces an increase in rent. This document is used by property rental businesses so that tenants can have an idea about the matter at hand. Using a rent increase letter can be very useful as it can specify all the information about the rental price changes. It is typical for rental businesses to give a sixty-day notice to their tenants before an increase in rent takes place. However, this is a case-to-case basis. If you are planning to create a rent increase letter, you have to identify the proper time in which the letter must be given to your tenants.

“The U.S. average rent increased by 3.2% ($45) year over year reaching $1,465 in June 2019, up by 0.8% ($12) month over month, according to Yardi Matrix data.” (Source: rentcafe) Rent increase can impact condominium renters, apartment tenants, bed spacers, and other entities who rely on renting a space or a property. A single rent increase can already affect room rental (roommate) agreements since tenants need to add a particular amount to what has already been agreed upon. Individuals who rent their own rooms also need to adjust their budget so that they can still comply with the payment requirements for the property. With this, as a business, you need to create a rent increase letter no matter what type or how big the range of your rental property operations is.

Create a rent increase letter prior to the actual implementation of the new rent price so you can prepare your tenants accordingly. The window time that you will give to them can help your tenants decide the call-to-action that they should execute based on several factors like their ability to continue renting with the new rent price, their perception and understanding about the value of the rent increase, and their willingness to pay an additional amount for rent. Are you ready to write your business’ own rent increase letter? Optimize the templates and samples that we have put together in this post so you can set the right track or direction for the creation of an excellent rent increase letter.

40+ Sample Rent Increase Letters

Purpose of Developing a Rent Increase Letter

If you will change the rental price that is specified in the rental agreement that you and a tenant has agreed upon, it is very important for you to provide a rent increase letter. Aside from purposes of formality, using a rent increase letter also serves as an appropriate announcement that there will be a change of rental price which can then prepare the tenant when it comes to handling and budgeting his or her finances. Do you know other reasons why it is deemed necessary for you to come up with a detailed rent increase letter? Some of the purposes of developing a rent increase letter are as follows:

To prepare the renters with the increase of rental price: As we have specified above, one of the main reasons why a rent increase letter is made is to ensure that renters will be knowledgeable of the rent increase. Letting them be aware of the subject matter ahead of time can make it easier for them to execute certain adjustments especially when it comes to budgeting their finances.To ensure the validity of the reason why it is important for a rent increase to take place: Rent increase letters can become more effective and efficient if it can provide the details on why the rent for a property increase. If the purpose of the rent increase is also for the advantage or benefit of renters, then they can further easily take in or accept the fact that they have to pay an additional amount for the same property that they are renting for a certain time period.To develop an understanding between the tenant or renter and the landlord: Landlord-to-renter relationships are very important if you want to maintain a healthy rental business. The rent increase letter that you will use can let your tenants and landlords understand each other’s concerns and can also most likely be a way for inquiries to take place and be voiced out in a polite manner.To ensure that the renters are well-aware of the exact and actual change/s that will take place: The price of the property rent is commonly included in several rental checklist samples that are used by renters. This is for the reason that the price of a rental space plays a big factor on whether a tenant should decide to rent a property or not. If you will change one of the factors that made a tenant come up with a rental decision, then it is only imperative for you to let them be aware of the rent increase that you will implement.

9 Steps for Making a Complete Rent Increase Letter

It is not enough for landlords and/or property owners to verbally announce the rent increase. A letter or a note about the rent increase is essential to be handed or emailed to tenants. More so, it is important for the tenants to ensure the landlords that they have received the notice for documentation purposes. If you want to create a rent increase letter that works, you have to organize the document creation process that you will follow. If you still do not have one, do not fret as we have already prepared a standard and basic rent increase letter creation procedure for you. Here are nine steps for making a complete rent increase letter:

1Use a template as your guideline or reference whenever you plan to develop a rent increase letter.2Use the letterhead of your business to make the letter look more formal.3Write the date when the rent increase letter has been written.4Provide information about the property within an inside address.5Specify the tenant’s name in your rent increase letter salutation.6Create a comprehensive introduction which includes the statement of rent increase, the date when the rent increase will take effect, the amount of the total rent increase, and the new rental price.7To clarify the reason/s of the rent increase, use a paragraph or two to provide relevant and related details.8Your last paragraph should seek for the cooperation and understanding of your tenants as well as the landlord’s name together with the contact details that the tenants may reach for any inquiries.9Use a complimentary close and affix your signature to end the document.

Things to Focus on When Writing a Rent Increase Letter

Just as how a rental agreement format template helps in making a well-formatted rental agreement, it can also be very advantageous on your part if you will use a suitable template when formatting your rent increase letter. However, it is not the visuals of the rent increase letter that you must prioritize. It is also necessary for you to measure the quality and completion of the document’s content. Do you have a list of all the items that you have to look into as you make a potentially successful rent increase letter? A few important things that you have to focus on when writing a rent increase letter include the following:

The clear statement that there will be an increase on rental price: Your rent increase letter should be particular when it comes to specifying its purpose. Have a concise and transparent introduction that can allow your tenants to know about the rent increase right away.The specification of the previous and new price of the property rental: You have to let your tenants or renters know the gap between the amounts that you will require from them as of the moment and on the future payment dates to come. Write the current rent amount and give a clear idea about the new amount that they have to pay in the future.The effective date of the rent increase: It is very important for you to make sure that your tenants are well-notified whenever you will have an upcoming rental price increase. One of the major information that you should not forget to include in the letter is the date in which the rent increase will already take effect. Specifying this information in the document can help your renters to decide on whether to stay at the property and be willing to pay the new rent price or look for another room or property to rent before the rent increase’s effective date.The purpose of and/or reason for the rent increase: Not all businesses will include the reason why there is a rent increase. However, we recommend you to include this in the letter especially if the increase in rent price is due to rental service developments, facility improvements, and additional property security features available that can benefit the renters in the long run.

Advantages of Providing Tenants With a Rent Increase Letter

Creating a rent increase letter is a great way to provide all the necessary information about an upcoming rent increase. If you want to make this document, you have to make sure that you are prepared with all the elements that you have to consider so you can develop a worthy and high-quality rent increase letter. More so, it can be useful if you can be aware of the benefits of having a rent increase letter so you can be motivated to make one. Below are some of the many advantages of providing tenants with a rent increase letter.

A rent increase letter can promote transparency with the rental price increase implementation.A rent increase letter can specify all the important key points that the tenants must be aware of.A rent increase letter can help the property management announce and document the price increase accordingly.A rent increase letter can make it easier for renters or tenants to decide on whether they will stay on the property or not.

Do’s and Don’ts for Creating an Understandable Rent Increase Letter

Using contracts and agreements is very beneficial to both the tenant and the landlord as these documents help establish an understanding between the rights and responsibilities of involved parties to one another. Aside from these documents, certain letters also play an important role when it comes to promoting a healthy relationship between the renter and landlord or owner of a property. If the management and/or business owner/s have already decided to increase the rent of a property, make sure that you will develop a rent increase letter to inform your tenants or renters about the decision. Are you aware of a few more guidelines that can help you strategically make an effective rent increase letter document? Some of the tips that can enable you to create an understandable rent increase letter include the following:

Do review and follow state laws if you plan to increase the rent of your tenants so you can make sure that your rent increase letter contains information that follows and adheres to legalities.Do consider the timeliness of your rent increase letter’s dissemination so you can still give a proper amount of time to your tenants for preparation and adjustments.Do optimize a rent increase letter template so you can properly develop the format of your own rent increase letter.Do note that your rent increase letter must be formal, polite, and kindly written so to not offend or overwhelm your tenants.Do make sure that the rent increase letter that you will develop contains all the information that is very important to be known by the people who are renting your property.Do not include any wrong or inaccurate information in the rent increase letter especially with the specification of the gap between the previous rent price and the new ones.Do not develop a mediocre rent increase letter as you need to ensure that the document that you will come up with is complete, detailed, updated, specific, and direct to the point.

Rent Increase Letters FAQs

Are there any questions that you would like to ask about rent increase letters and how they are actually created for or used in actual rental circumstances, instances, and transactions? Asking questions about points that are unclear to you is very important if you want to have a proper understanding of certain situations, activities, and subject matters. Two questions that are frequently asked about rent increase letters are listed and answered below.

Is a rent increase letter necessary?

A rent increase letter is truly necessary especially when talking about legalities. It is the responsibility of property owners to give relevant notices whenever they plan to increase the amount for rental payments-especially if it will be deemed effective during the lease term where an agreement is already made beforehand. Aside from this, rent increase letters are also important as it allows tenants or renters to be knowledgeable of the particular information about the rent increase ahead of the specified increase’s effective implementation.

How can a rent increase letter affect the relationship of a tenant and a landlord?

A rent increase letter can impact or affect the relationship of a tenant and a landlord in many different ways. As an example, the presence and availability of the document can give an impression that the landlords are thinking and considering the tenants before implementing a new rent price. Without the specified document, tenants can easily be enraged and the lack of information about the price increase can actually turn to a court trial or the execution of legal actions. If you want to maintain a harmonious relationship with your tenants or renters, make sure that you will supply the necessary documents that they need to receive especially if an increase in rent is the main subject or matter of discussion at hand.

If you do not know where to begin with the development of a rent increase letter, do not worry as you can always rely on our downloadable and editable templates. We have also put together a number of existing and available document samples that can make it easier and more efficient for you to create your needed rent increase letter. Use these available references at a maximum so you can optimize your efforts during the development of a rent increase letter document.