Rent Increase Letter to Tenant | Free Template

When it’s time to raise the rent, it can be a delicate issue knowing how to write a rent increase letter to your tenants. 

Further, it can be more difficult trying to write a rent increase notice if you have a good relationship with your tenants that you’d like to maintain or long-standing tenants you want to keep. But, sometimes issues like tax increases, market rates, and the cost of maintaining the property mean that you need to raise the rent to stay on top of your investment.

The most obvious concern with sending a rent increase letter is that your tenants decide not to renew their lease and you, once again, have to go on the hunt for new renters.

However, tenant turnover isn’t something you need to be afraid of. All landlords experience turnover, and if you give proper notice, you have plenty of time to find new tenants with your new rent price if your current ones decide not to renew.

How Much Can You Increase Rent?

Most states have regulations outlined in their landlord-tenant laws that can determine how much you can raise the rent.

For example, in New York state, there isn’t a limit on how much a landlord can raise a tenant’s rent, but you must give adequate notice if the rent increase is 5% or more.

In general, most landlords find that raising the rent by 3-5% every year is fair to adjust for market value or additional cost factors, without sending tenants running for a new rental.

It’s important to remember that if you raise the rent too much for your location’s market, tenants might decide to leave. If you have good, long-term tenants, it can be better for your business to incrementally increase the rent (e.g., 1-1.5%) because long-standing tenants mean you don’t have vacancy or turnover costs.

How to Explain Rent Increase to Tenant

As noted above, sending a rent increase letter can be nerve-racking, especially if you have a long-standing tenant or a good relationship with your tenant. 

In these cases, you might want to write a letter that explains why you’re raising the rent. However, don’t feel compelled to explain why you’re raising the rent if you don’t want to. In the renting world, it is generally common to increase the rent once in a while to accommodate for changes in the real estate market, taxes, and maintenance.

One option to consider is including a lease addendum that informs tenants there is a percentage increase in rent that occurs every year when the lease renews. When new renters sign their lease, you can let them know that rent is increased each year. This sets a precedence upfront so tenants are aware of the policy.

Rent Increase Letter to Tenant | 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 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 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.






Note: This content is not intended to substitute, replace, or be construed as professional legal advice. It is for referential purposes only and not meant to replace the advice of your legal counsel, legal representation, and or lawyer. Please consult your professional legal representation or lawyer to ensure you are compliant with any local, state, and/or federal laws.