How to raise your rents without losing good tenants

Retention of a “good tenant” starts before you even purchase your property.

When choosing an investment property one of the factors you will consider is a profile of your prospective tenants. If your property is in a noisy, undesirable area and the walkability score is very low, what does that say for your earnings potential and the tenant such a property would appeal to?

Most people want to live in a good neighbourhood, a safe and good community, close to shopping, schools and transportation.

If you purchase the right type of property - one that the majority of individuals need and/or desire - you’ll have a large pool of prospective tenants to choose from.

Such a property should also appeal to the owner-occupier market - a great thing to have if you need or choose to sell.

Property condition
Your property’s condition isn’t just tied to capital growth; it’s also influences how your tenants feel about living in your home.

Routine maintenance and the occasional improvements show your tenant that you appreciate their tenancy.

Security is a top concern of tenants. Make sure that your doors and windows have good locks in place and that both the exterior and interior of the home is well lit.

Another consideration is privacy. A simple addition of quality blinds and/or curtains can do the trick.

Raising rents
Make sure that your rents are in line with market value. Nothing says “slumlord” like charging above market rent!

I believe that most people are fair and equitable. Consider the “golden rule” and put yourself in your tenants’ place when choosing to raise rents.

To improve your chances of keeping good tenants do the following:

●    Maintain the property
●    Respond quickly to any issues or concerns
●    Explain why you’re raising rents
●    Increase rents by a small amount more often than by a huge amount at one time
●    Give your tenant more than enough notice about the change.

○    This shows them that you understand their budget issues and it gives you time to find a new tenant if necessary.
○    Be willing to negotiate. If you want to keep your tenant, but the increase is too much, find a solution that works for the both of you.
○    A longer notice also gives your tenant time to consider the financial and time costs associated with finding another residence - which may encourage them to stay put.

One tip - let’s say you’re increasing your rents by $20. Advise your tenant of this fact, but then ask your property manager to call your tenant and tell them that you’ve changed your mind, you’re only going to raise the rents $10 because “you really value their tenancy.”

This small gesture can really go a long way - people like to be appreciated.

I also like to send my tenants a bottle of wine every Christmas - it’s a small gesture on my part to say thanks for your tenancy and taking good care of my property.