How Do I Tell My Tenant I Need to Raise the Rent?

“How do I tell my tenant I need to raise the rent?”

First-time landlords might be hesitant to raise the rent, especially if they’re nervous about upsetting good, current tenants. Even for experienced landlords, it can still be hard to tell a tenant that it’s time to raise the rent—more so if you’ve cultivated a close relationship with that tenant or it’s been a long time since the rent was raised.

While tenant turnover can cost you money, not increasing the rent when you’re losing money on taxes, insurance, the market, or maintenance repairs is also a financial drain. Unfortunately, as property taxes and market rates increase, so does the rent. While it can be difficult to tell a tenant that you need to raise the rent, doing so is important for your finances.

  1. Remember you’re a business. As close or as friendly as you might be with your tenants, remember you are running a business. If you’re losing money on your business, it’s time to adjust the rent to maintain that business.
  2. Do your research. Look into the market in your area to determine what fair market value is for your rent. This will help you determine what is a reasonable monthly rent for your place. can be a helpful place to estimate rent prices in your area based on location and type of rental.
  3. Raise the rent all at once or incrementally. Depending on what you find to be the difference in your rent and the market rent, you might have to decide if you will raise the rent all at once or incrementally. If the difference is significant and tenant turnover is top of mind, consider breaking down the rent increase into smaller increments year-over-year.
  4. Don’t negotiate or ask tenants what they think a fair rent increase would be. Do your research and decide on a fair, reasonable number to bring your unit up to market rates. But remember, if the rent increase is well above market value, tenants will probably leave.
  5. Be courteous and firm. If you’re worried about losing your tenants due to an increase, you can give them an informal heads up that a formal rent increase notice is on its way. Indicate that you value them as a tenant and hope they continue renting with you, but that when it comes time to renew the lease, there will be a rent increase.
  6. Find a template you like. It can be difficult to write a formal letter informing the tenant of a rent increase. Below, we’ve provided a template to help you inform your tenant of a rent increase at the end of their lease.
  7. Send a formal letter by certified mail. Why certified mail? “Certified Mail is a special USPS service that provides the person sending the mailpiece with an official receipt showing proof the item was mailed” (source). This means you will receive confirmation that the tenant received the notice. (And therefore have a paper trail with dates.) Allow yourself plenty of time for the post to travel via snail mail.
  8. Give the tenant notice. Giving tenants at least 60-day’s notice will ensure that they have enough time to process the information and determine whether or not they will stay at the end of the lease—with enough time to give you 30-day’s notice.
  9. As always, know your laws. Be sure whatever rent increase you decide to give does not infringe upon any state or federal laws. 
  10. Consider adding a rent increase clause. To mitigate the surprise of an unexpected rent increase, some landlords simply write in their lease that there is a small (typically 3-5%) raise in rent every year. When tenants sign the lease, you can be upfront that you raise the rent yearly, so they are warned very early on about the incremental rent increase.

Raise the Rent | Template






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

Please note that the monthly rent for the above property will be increased from [OLD RENT AMOUNT] to [NEW RENT AMOUNT] effective [DATE AFTER LEASE ENDS – write in full].

If you do not wish to renew your lease, please provide your notice as soon as possible or at the required 30 days, no later than [DATE OF LAST NOTICE REQUIRED – write in full].

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