Most landlords in Baltimore get confused with to increase rent or not to increase. Indeed, increasing rent puts more dollars in your pocket. But, how often you should increase is again a question that bothers the landlord.
Usually, it is advised to increase rent annually. Some also prefer increasing it quarterly or every time new tenants move in. But, it has some consequences that you must understand being a landlord. This can affect your property investment business. Taking the assistance of a professional property management company in Baltimore can eliminate this confusion. They research the market and choose to set the right rental rate. Also, know when is the right time to raise the rent and to what extent.
In this article, we will cover every aspect that will help you to know how often a landlord can increase rent. Also, the reasons why or when you should avoid increasing rent.
How often should you increase the rent?
As a general practice, most landlords in Baltimore increase the rental price by up to 10% each year. Well, it is advised to increase rent every year to keep up with the market. But, if your property is not located in the skyrocketing market then there’s no benefit of doing it. If you still want to increase your rent then do it every year but consider the percentage of the hike and also research the market.
But, whether you should increase the rent or not and how often should you increase it, depends on several things. Hence, you should consider everything before deciding anything.
Benefits of raising the rent
Increasing the rental price is important. There are many advantages of increasing your Baltimore rental property’s rent. This will simply bring in more cash, which will assist you with your weekly expenses. Following are the pros of increasing the rent of your rental.
- You will get more money.
- Only the quality tenants will approach you as not everyone can afford to spend too much on rent.
- With more money, you can spend on other expenses too.
- Tenants will take care of your property.
But, you cannot only consider the pros of increasing rent. Consider the cons of increasing the rent of your Baltimore rental apartments as well. Because this will help you to know whether you should increase the rent or not. And if yes, then how often should you increase it.
Is it necessary to increase rent every year?
Should you increase the rent every year or not is depends on the rental market. If your property is in the most demanded section of the city then it commands to increase the rent.
Reasons why can’t you increase the rental fee
Although experts say increasing rental fees to some extent every year is important, some scenarios do not justify this. As I have already mentioned, considering the pros and cons of increasing rent is important. So, decide accordingly.
- Your jurisdiction has a statute limiting rent increase, which means your rent is controlled. So, you cannot increase the rent on yearly basis or at all.
- If you have a fixed-term lease for one year or 11 months, then also you won’t be able to increase the rent. You cannot raise the rent after 6 months, rather wait till the renewal of the lease.
- Also, if you have a month-to-month tenancy, check your state laws before raising the rent.
What happens when you don’t want to increase the rental price?
If you are happy with your tenants and you want them to live in your property longer, then do not increase the rent. Being a landlord you can decide not to increase the rent. But you may face problems in carrying the weekly expenses. To escape from that situation. You can add extra fees for pets, upgrades, and furnished homes.
Not raising the rent can also put you in big trouble, especially if your property is located in a desirable locality. You will be behind the rental market if you will not keep increasing rent every year. And you will have to increase the rent several times to catch up.
When can you raise the rent?
Being an independent landlord, you can decide when, But consider the state laws as well before doing it. Well, you have a right to increase rent at a yearly percentage. Following are the time or situations when you can increase the rent of your Baltimore residential properties: –
The market rent has risen
If the rental market is rising then you are forced to increase the rent of your rental. And if you not, you will quickly be behind the rental market. Hence, it’s important to consider changes in the rental amount.
You have renovated the property
If you have renovated your property spending a considerable amount to make it of a better standard then increasing rent makes sense. If it enhances the look of your property then you can expect to get a good rental amount.
Your tenants are asking for amenities
Sometimes tenants also ask for a few more facilities such as air-conditioning, etc. If your tenants have any such requirements then you can provide them the amenity with an additional fee or simply increase the rent.
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Final Words
Before you head to raise the rent, consider the cons. You may lose a good tenant. Not everyone can afford to live in a high rented property or apartment. Your tenants may face problems in paying higher rental amounts than they were paying earlier. Then you will be left with nothing but a vacant property. Your property may be sitting vacant for a longer time. Hence, it’s important to consider each and every concept before raising the rent.
