How to Raise the Rent in 4 Easy Steps [Free Template]

Written on March 9, 2015 by , updated on July 21, 2020

Raising the RentRaising the rent on your tenants can be almost as difficult as asking your boss for a raise.

The difference is that you typically need to justify your reasoning to your boss, but you don’t need to do so with your tenants, even if you have plenty of valid reasons. such as:

  • Increasing insurance premiums
  • Increases in taxes
  • Maintenance fees that go up
  • Rising homeowner association dues
  • and, there’s always cost-of-living increases

You don’t need to explain your finances to your tenants. All you need to do is let them know in writing that there will be a rent increase and what it will be.

It’s understandable that you might be hesitant the first time you’re preparing to present a tenant with a rent increase. You might be afraid to rock the boat, worried that your tenant will be so offended or mad that he or she might leave. Or perhaps, you fear a confrontation and subsequent retaliatory property damage.

If you follow these four tips, you can eliminate most of the angst from raising the rent, and you’ll begin to think of this process as just another normal part of being a landlord.

1. Automatically include a small rent increase at each lease renewal period

Most tenants expect a slight rent increase at renewal time of say $20-50 or so. But if you spring a $200 or more increase on them after not having increased the rent for five years, you’ll likely get some negative feedback. A good rule of thumb is to raise the rent about 3-5 percent a year.

If you have an excellent tenant that you are trying to convince to renew, you might want to waive the rent increase if they will sign for another year. After all, you can always make up the difference by raising the rent when he/she finally moves out.

An excellent tenant is worth far more than any rent increase.

Related: Tip #8, Don’t Always Raise the Rent

2. Send notice 60 days before lease end

Sending a rent increase letter this far in advance lets you know what the tenant’s intentions are. If he or she doesn’t plan to renew the lease, you have time to start marketing and showing the place without having a vacancy period.

In the rent increase letter, which you can send through regular mail or email, thank your them for being such great tenants. Compliment them on their good traits, such as paying the rent on time or taking care of the property.

Then, get right to it and say that you need to raise the rent. You can add an explanation if you like, such as you needing to keep up with your expenses. Point out that you are raising the rent as little as possible, and that you hope they will stay with you.

You’ll need to state what the new rent will be and the date it becomes effective, which would be the day after the lease ends.

If you have a fixed-term lease, you could include or attach a new lease with your letter or email. Ask that your tenant read the new lease, sign it and send it back to you. Explain that you’ve highlighted or underlined any changes, such as the rent increase, and that everything else remains the same.

If you have a month-to-month lease, the tenant won’t need to sign a renewal since it automatically renews every month.

Sample Rent Increase Letter

3. Know the law

Although the property is yours, you can’t raise the rent however much you like if your place is rent controlled, or if there is a statute that limits the increase amount. And you can’t raise the rent whenever you like if you have a fixed-term lease.

If your tenant signed a lease, you can’t raise the rent until the lease period is up. The only exception is if the lease states that you can raise the rent during the lease period – but even so, it negates the idea of a “fixed” lease and is often not allowable in court.

If your tenant is on a month-to-month tenancy, you can raise the rent after giving the proper notice for your state, which is usually 30 days, but varies by state. Your notice needs to be in writing (letter or email), and unfortunately, any verbal agreement with your tenant usually won’t stand up in court if argued.

Learn more about your state laws, click on your state: 


Please know that you can’t raise the rent in a discriminatory manner because you don’t like a person’s race, religion or sexual orientation. Neither can you raise the rent because you just made some needed repairs to the property or to punish a tenant for complaining to the city about a code violation.

In many states, if a tenant as filed an official complaint to a government authority, been involved in a tenant’s organization, or exercised a legal right, then you are restricted from raising the rent for a set period of time. Many courts will assume “retaliation” by the landlord if negative action is taken on the tenant anywhere from 60 – 180 days after any of the prior tenant actions. Again, check your state laws regarding the rules on retaliation.

Related: Ask Lucas 002: How Much Can I Raise the Rent?

4. Know the market rates

Your costs don’t dictate what you should charge for rent; the market does. You can’t expect to keep a tenant if you’re charging significantly more that other similar rental units around you.

But as long as your rental rates are in line with other similar rentals in the area, you follow the rent increase laws of your jurisdiction and you tactfully and professionally give your tenants a rent increase notice, you’ll wonder why you ever stressed about this process.

Actual Rent Comps

The absolute best way to determine market rate is by looking at ACTUAL rent prices of comparables in your area. Using actual “rent data” is better than “listing price” data because one is actual, and the other is projected.

To get actual rent prices, use a Cozy Rent Estimate, which uses a variety of sources to give you the most accurate rent estimate you can find.

Listings Comps

There are still some other great sources of data, albeit, they use listings information. None-the-less, check Craigslist,, and Rentometer to determine comparables and your realistic market price.

Bonus: Collect your rent online

You can save a little money — and a lot of time — by collecting rent online using Cozy. It’s easier for you and your tenants, and completely free. While you can sign up and start collecting rent using Cozy at any time (even if you’re in the middle of a lease), if you’re updating your lease anyway, it’s a great opportunity make it your preferred payment method.

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74 CommentsLeave a Comment

  • David Ross

    I’ve been leasing a condo I own in Arizona to the same tenant for 5 years now. A few months ago, however, a new occupant (i.e. girlfriend) came on the scene. My tenant requested that I add her name to the existing lease… which I did.

    Now, the original tenant has contacted me indicating there is trouble in paradise and – though he wants to continue leasing the unit when the current lease expires in May 2017 – he does NOT want the co-tenant to remain on the lease or in residence.

    My question is this: Can I write up a new lease for my original tenant only when the current lease expires (i.e. in effect, forcing the newer co-tenant to vacate)… or would doing so infringe on her legal rights as a co-tenant on the current lease?

    • Craig


      I think you need to ask your tenant to “man-up”. He invited her in and he needs to invite her out. It’s not your job to split them up. If he does his job, it’s a mute point.

  • maxi

    I have not increased my tenants rate for the past 8years, they have been paying me #36000 per year which is #3000per month, now I have decided to increase the rent to #48000per year which will be #4000per month….. I hope that am not charging them much?

    • vickie sanders

      This is precisely why modest regular rental increases are so important. Had you increased the rent over the years you would not be in a place where you must shockingly raise it all at once.

    • Sheila Hepp

      If you were to calculate a 3 to 4% increase in rent for the last 8 years from $3000 starting point for tenants you have had that long, you could show them what the rent increase would be had you done your increases annually, and then be ready to negotiate to keep good tenants happy. You could negotiate for longer leases, improvements, or split the difference and take smaller percentage of increase to give them a win.

      Expenses for the last 8 years: taxes, insurance, maintenance, or planned renovations that would impact your revenue would be a rationale for raising rent at this point. It’s good to give them an honest reason instead of an arbitrary figure, and then maintain a percentage of increase annually.

      • Krissy B

        I just bought a house with a rental property that came with a tenant.
        We bought it from a retired couple that had the house paid off etc. We agreed to keep the rental agreement in place for the first few months which was “ monthly rent $700 in biweekly payments, we pay utilities ( hydro, gas, water”
        That said, the $700 a month barely covers their utilities. What should I do? Can I request more as we haven’t been given accurate information from the people we bought from? Also the market rent in my town is about $1000 a month. Help

        • Laura Agadoni

          Hi Krissy,
          Find out whether the tenants have a lease? The seller of the property and the tenants should both have a copy if there is one. You then need to abide by the terms until the lease term is over. If there is no lease, the tenants are month-to-month tenants, and that means you just need to give the proper notice for your state regarding when you can either ask them to vacate or raise the rent. This time is typically one or two months’ notice. Every state differs. Good luck!

  • Cris Smyrnos

    I have a commercial property lease with my tenant that states rent will increase yearly by 3%. I did not increase the rent last year and would like to increase the rent this year by 5%. Is that fair to my tenant or should I just hold to the 3% and avoid any issues down the line.
    Thanks for the information.

  • rich Knapp

    Yes, I have a good tenant who is going on her fourth tear on my 2 bed / 11/2 bath condo. she signed the lease when rents were cheaper because of the recession, etc. Her rent is in the 600’s area and I see on Zillow it should be in the 800 to 900’s a month range.
    I would like to raise her rent by 6% for the new May lease. She gives me 12 pre signed, post dated checks a year, so I don’t want to raise it too much. Does this sound right to you?

    • jeb

      Although one would rather not have a tenant leave because of an increase, market rate does have to be taken into account as does the cost-of-living. Investment properties are bought to make money not only in equity. A $36 rent increase after 4 yrs. is more than generous. I think she should be grateful and if she decides to leave, probably after looking at the rents in the area, she’ll might just stay put but if she decides to move, you can rent for even more. Good luck.

    • jeb

      Although one would want a good tenant to leave because of an increase, market rate does have to be taken into account as does the cost-of-living. Investment properties are bought to make money, not only in equity. A $36 rent increase after 4 yrs. is more than generous. I think she should be grateful and if she decides to leave, probably after looking at the rents in the area, she might just stay put but if she decides to move, you can rent for even more. Good luck.

  • Julie

    My tenants have a 1 years lease, they have been late 10x. Their lease is up in two months. Is it wrong to increase their rent 5% to 6%. I know my rent is a little lower in the area.

    • Sheila Hepp

      Rent that is delinquent is usually charged a late fee. If you want to keep high maintenance tenants that require footwork on your part to collect rent that should be on demand, give them a contract with a late fee that you actually hold them to, increase the rent to market value, and let your contract do it’s job. They will leave, you will be free to charge what you want, and you can start fresh with a new spine and new tenants.

  • K.Lee

    I have a nice family -young couple with one child- occupying my rental. They take care of the house nicely but almost always pay rent late, and only sometimes automatically pay the late fee. Other than the late rent and sometimes difficulty reaching them for communication about repairs etc, they seem to be pretty good people (no drugs etc). The rent they are paying appears to be about $300 below current market rates, and they are on a month to month lease . They have been living there 9 months.

    Would it be worth the risk of losing them if I raise the rent $100-150?

    • Laura Agadoni

      Hi K.Lee,
      This depends on how difficult it is to rent your place. If your rental is in a desirable area and is in good shape, then I would probably give these renters notice to leave and then list the place at market rate. Some jurisdictions limit how much you can raise the rent. Some don’t, but it’s usually better to gradually increase the rent once a year vs. a sudden and huge rate hike. If your place is difficult to rent and you don’t want to lose your renters, talk with them first about the late payment situation. Also let them know that there will be a rent increase coming, and that they will need to sign a lease to stay (with a late fee policy). I’d give them a couple months’ notice of these changes if you don’t want to lose them.

      • k. lee

        Thank you. Yes it’s a nice house in a desirable area. I am hesitant to ask them to leave because I live an hour away and interviewing prospective tenants is difficult. They have a lease already with late fee specified.
        Ive decided to send a letter asking for late fee for this month, notify them of $100 increased rent, and see what they do… and if they stay I will increase again in 6 months…

  • Devie Gayaman

    what are the basis for Increase of Rental rate?

  • Jazzy Renteria

    We have been renting a studio for 3 years now. A few months ago, my landlord called to tell me she will raise the rent starting the following month and did not provide any written notice. Unfortunately we had to leave out of town at the time this happened and she’s put it off. I asked for a new contract including rent increase but I have not heard from her. What is the best approach in this matter?

  • Iavarone

    I have a tenant who that lives above my detached 2 car garage. He has changed the back door and is refusing to give me a key. He has also done many permanent changes and damages to the inside of the apartment. An example of this is he removed a built-in bed and dresser that were in the master bedroom. He also removed paneling, ceiling beams, and a dishwasher, and the list just goes on. He is on a month-to-month tenancy with no lease, ever. I allowed him to store some of his belongings in my garage, but have text messages and correspondence stating that this was done purely out of the goodness of my heart and that he had no claim to the garage space. Can I legally make him remove his things from the garage, and force him to give me a key?

  • Renee Shaeffer

    I have a good renter four years that has violated the rental agreement by inviting adult family members with dogs to live with them. I wish to keep them another year. Can I fine them for the extra tenants by increasing the rent $500.00 per month?

    • Laura Agadoni

      Hi Renee,
      You can’t fine your tenants if a policy for fines is not in your lease. But at each renewal time, you can create a new lease with new terms. I suggest that you get all adults who will live in your property on the lease. Let them know in advance what your new policies and rent will be. If they are agreeable, send them the new lease with the new terms, and get all adults to sign the lease. If you have a pet policy, put that in the lease too. If they don’t agree to the new terms, you can negotiate new terms that both sides like, or you can find new tenants.

      • Renee Shaeffer

        Thanks for your help. Our trust is damaged. We agreed to having two adults rent our house. Over the course of this year they hid the addition of three adults an infant and three pit bulls. One of the pit bulls nearly bit my husband. We notified them that we are not going to renew their lease on January 1st. They may have until January 31st to vacate the premises. Didn’t really want to lose them however after four years we want to do some improvement to the property and adjust the rent for the next tenants.

  • Ra-An

    Hi…I sure wish there were sites here for Canada like this. I have been searching all over online to find out about Commercial rent increases, forms, amounts etc. Can’t find it anywhere..sigh!

  • Rena Templ

    I reluctintly agreed to let a couple move into a room in my home. I agreed to charge them what I would charge one person. They said it would be temporary, it is now going on 2 years.
    At first he agreed to help with the yard work, 5 months later and now he isnt helping with the yard work.
    I noticed he put in a drip line for all his plants, water is already expensive in this area.
    Today I noticed they had placed a window ac unit, without asking which I am sure will raise my electrical bill.
    I am kind of unsure of what I am allowed to do, what are my rights and …..
    Can I do a rent increase + additional money on the utilities?
    Please, can someone help me these questions.

  • Ann

    I wish to increase the rent. It is a periodic lease that is coming up for renewal. While reading official letters to tenant for rent increase I find the following. “in accordance with the terms of your lese”
    The original lease has no mention of rent increases does that mean I cannot raise the rent? The tenants are going into their 4th year without an increase and my expenses have increased each year.

    • Laura Agadoni

      Hi Ann,
      Unless your rentals are subject to rent control, you can raise the rent at lease renewal time as much or as little as you like. What I do when I need to increase the rent is to send a letter to my tenants 2 months before lease renewal time, letting them know there will be a rent increase of X amount. That gives them time to consider whether they will renew or not. If they still want to renew, I send a lease with the new rent amount. Good luck!

  • Rebecca Bolton

    I completed a lease to purchase giving my tenants 4 years to buy. My taxes had a homestead deduction and will go up. My homeowners insurance will go up to for the same reason. I did not take this into account when we came up with a rental fee. I need to change our agreement to cover these cost. With it being a lease to purchase, 4 years, do I just send a notice of the increase? Or, do I continue to pay my tenants to live in my home for 4 years? What can I do? I’m not wanting to take advantage of my tenants, but I would like to, at least clear even at the end of the month. Help, please!
    Ignorant Landlord,

  • Terrie

    Rebecca, thanks for the question. I have been asked by my tenants for a lease-purchase. I was unaware of the extra associated costs. I look forward to an answer of your question.

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