Setting the right rental price and legally increasing rent are two of the most critical aspects of being a landlord. Price your property too high, and you risk vacancies; too low, and you lose potential income. Likewise, increasing rent requires careful planning to comply with legal requirements and maintain a good landlord-tenant relationship.
In this blog, we’ll discuss how to determine the best rental price and the legal process for increasing rent.
How to Set the Right Rental Price
Determining the right rent involves a mix of market research, property value assessment, and competitive pricing. Here’s how you can do it:
1. Research the Local Rental Market
✔ Check rental prices for similar properties in your area using real estate websites (e.g., MagicBricks, 99acres, Zillow, Rentometer).
✔ Compare properties with similar size, amenities, and location advantages.
✔ Look at vacancy rates—if many similar units are vacant, setting a competitive price is crucial.
✔ Size & Layout – A 2BHK apartment will rent for more than a 1BHK in the same location.
✔ Furnishing Level – Fully furnished homes demand higher rent than semi-furnished or unfurnished ones.
✔ Amenities – Properties with a gym, pool, parking, and security services can justify a higher rental price.
✔ Condition & Upgrades – A well-maintained, recently renovated property can command a premium.
3. Factor in Your Costs
✔ Mortgage Payments (if applicable)
✔ Maintenance & Repairs
✔ Property Taxes
✔ Society Maintenance Fees
✔ Utilities (if included in rent)
Your rent should cover these costs while remaining competitive in the market.
✔ Demand for rentals is higher in peak seasons, like before school sessions start or in job-hub cities.
✔ Offering discounts or free amenities (like a free month of parking) can attract tenants in a slow market.
How to Increase Rent Legally
Raising rent is a sensitive issue—doing it fairly and legally is key to keeping tenants happy and avoiding legal trouble.
1. Check Local Rental Laws
✔ In some cities, rent control laws limit how much and how often you can increase rent.
✔ Check your state’s rental laws to know the maximum percentage of increase allowed.
2. Review Your Lease Agreement
✔ Many leases specify rent increase terms, such as how much notice is required.
✔ If the lease is fixed-term, you usually cannot raise rent until renewal.
✔ If it’s a month-to-month lease, landlords can increase rent with proper notice.
3. Provide Legal Notice to Tenants
✔ Landlords must give written notice before increasing rent.
✔ Notice periods vary by location but are typically 30 to 90 days before the increase takes effect.
4. Justify the Rent Increase
To prevent tenant disputes, landlords should clearly explain the reason for the rent hike, such as:
✔ Increased property taxes or maintenance costs
✔ Market rate adjustments (aligning with similar rentals in the area)
✔ Added upgrades or amenities (renovation, security, parking, etc.)
5. Be Open to Negotiation
✔ Some tenants may request a smaller increase in exchange for signing a longer lease.
✔ Consider offering discounts for early payments or bundled services (e.g., internet or utilities included).
6. Avoid Discriminatory or Unfair Increases
✔ Rent hikes should apply fairly to all tenants—not selectively based on race, religion, or gender.
✔ Unreasonable increases (e.g., 50% overnight) may lead to tenant complaints or legal issues.