How to Write a Letter of Rent Increase | TEMPLATE

When it comes to managing your investment properties, rent is a key part of the process. After all, if you don’t have incoming cash flow, then your business will suffer financially.

First, you’ll need to establish the rent amount in your lease. Then, you’ll have to set up rent collection to ensure you’re able to efficiently manage this process.

After you’ve established your rent in your leases, you have a set income for the duration of your agreement with your tenants. However, when that lease ends, it might be time to raise the rent using a letter of rent increase.

Know Your Laws Around Rent Increases

In different states, there will be different regulations around how much you can increase the rent. For example, Wisconsin has no limit on how much you can increase rent. Be sure you do your research for your state. Make sure to know any limitations on how much you can raise the rent.

To accommodate for marketing fluctuations and additional costs of maintaining the property, most landlords will raise the rent by 3-5% yearly. This is usually enough to cover costs. It also keeps the rent increase low enough that the tenant is less likely to move due to the raise. 

How Much Can You Raise the Rent?

Accordingly, be aware of how much you raise your rent. If it is too much for the location’s typical rent costs, renters might start looking for a new home. This means you’ll be looking for new renters! Sometimes, this can be frustrating. Finding new renters takes time and a vacancy could cost you a few months’ worth of revenue.

Long-standing renters mean that you have recurring revenue. So, keep this in mind when determining how much to raise the rent.

To determine the amount you raise the rent, research similar rentals in the area to see what is a reasonable increase without scaring off your current tenants. You can use sites like Zillow and to find rentals in your area to compare prices. 

Explaining a Rent Increase

If you have a good-standing relationship with your renter, it can be scary to send a rent increase letter. In some cases, you might offer the renter an explanation of why you’re raising the rent.

However, it is not uncommon for landlords to raise the rent. Therefore, don’t feel as if you have to explain your reasoning. It is typical to raise the rent to cover the costs of maintenance, fluctuations in the market, mortgages, insurance, and taxes.

Remember you’re a business. You might be close or friendly with your renters. But, if you’re losing money on your business, it’s time to adjust the rent to maintain that business.

One way to make raising the rent easier is to include an addendum in your lease. You can mention there will be a percentage or dollar increase at the end of the lease. This way, your renter knows to expect an increase in rent when their lease is up.

Writing a Rent Increase Letter: What to Say

Below, we’ve included a template of what to say in a rent increase letter. Keep in mind, your state and local laws might have different requirements for what to include in your notice. But, the following can be an easy template to start off drafting a letter of rent increase.






As noted in your lease, your lease at [PROPERTY ADDRESS] will end on [LEASE EXPIRATION DATE – write in full]. 

Please note that the rent for the above [PROPERTY ADDRESS] will increase from [OLD RENT AMOUNT] to [NEW RENT AMOUNT] effective [DATE OF NEW LEASE – write in full].

If you do not wish to renew your lease, please provide your notice as soon as possible or at the required [#] days, no later than [DATE OF LAST NOTICE REQUIRED – write in full].

If you have any questions, please do not hesitate to contact me.




While sending a rent increase letter is never fun, sometimes it is necessary. Communication with your tenants is critical. Ensure you’re following the proper guidelines for letting tenants know you’re raising the rent.

Additionally, RentRedi has features for tenant communication that can make it easy to stay in touch with your tenants. For example, we have automatic rent reminders you can schedule to send to tenants. We also have customizable push and email notifications. If you’re interested in learning more, sign up below!