Raising the rent notice

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Submitted by treehugger on February 20, 2018 - 1:35pm

After many years and never having raised the rent we are finally ready!

Does anyone have an example "raise the rent" letter or notice they would be willing to share?


Submitted by ucodegen on February 20, 2018 - 3:22pm.

No example of notice. However depending upon the state, you may need to give a 60 day notice (maybe even more) depending upon how long your tenants have resided at that location. Also, depending upon the state - there may be limits on the amount of raise and how often it can be applied.

Submitted by treehugger on February 20, 2018 - 5:36pm.


Submitted by ucodegen on February 20, 2018 - 6:03pm.

treehugger wrote:

If rent increase is 10% or less; 30 day notice. Greater than 10%; 60 day notice. This excludes area around and including San Francisco and others that do have rent control. It does depend on the local area - though from memory, I don't think anywhere within San Diego City and County have employed rent control.

NOTE: Rent increase must be in writing, waiting period before actual increase starts as of date of delivery (can't have one predated or say that 'we talked about it beforehand'). With mailed notices, an additional 5 days applies (Recommend at a min certified mail from post office. Capture delivery receipt from post office and file. Signature confirmation might be a bit intimidating to the renters though.).

More details applies to mid-month increases, but safest bet is to make sure you apply the notice 30 days before any increases take effect.

Did some searching to double check my memory, useful link:

Submitted by Coronita on February 21, 2018 - 8:11am.

Two of tenants are moving out after living for 5 years at my place...Both having a kid and both just got their greencards...And both bought houses....they thanked me for 5 years of not raising their rent and they sent me a bunch of referrals. I finally can increase rent prices to market price by $300ish/month and still be competitive.

Submitted by FlyerInHi on February 22, 2018 - 8:39pm.

Why does your rental agreement not have automatic annual rent increases?

It's business not charity.

Submitted by Hatfield on February 22, 2018 - 9:08pm.

Maybe he wants to reduce turnover. A long time ago I was advised to never raise the rent on a good tenant, and I never have.

Submitted by Coronita on February 22, 2018 - 9:36pm.

Hatfield wrote:
Maybe he wants to reduce turnover. A long time ago I was advised to never raise the rent on a good tenant, and I never have.


Actually, I had no turnover over the past 5 years here in SD. Nice reliable "pension".

I'd rather spend most of my time running, racing, or family time that trying to milk every last dollar out of the current market price and deal with turnover.

Not greedy, as long as it's profitable.

As far as I'm concerned, tenants pay for my fun time these days and maybe a little extra retirement.... though I think I'm capping my car expenses at $10k, excluding maintenance items like tires...Then again there's a new P-car GT4 coming out soon.....So...hmmmmmmm....maybe this time.....

Submitted by FlyerInHi on February 23, 2018 - 3:03pm.

I don't think an automatic 2% or 3% increase causes turnover.
A long time ago was a different time. We had more vacancies before, like in the 90s.

Submitted by harvey on February 23, 2018 - 3:58pm.

I don't think a "raise the rent" letter needs to be very verbose, especially if it has been many years. Tennants are either going to understand inflation or they are not. You won't be able to educate them with notice letter.

Submitted by Escoguy on February 23, 2018 - 10:44pm.

In the past 15 years, some stay a long time, some buy regardless of rent level, some should be shown the door. Modest raises on a good tenant aren't a problem: examples:

Property A, 2700 sf in 92027
Tenant 1, stayed 9 years from 2003 to 2013, raised rent from $1900 to about $2000. He was a single man staying in a 2700 sf home, his daughter was there some of the time. He was a low impact tenant and we were out of the country so I didn't want to mess with turn over.

Tenant 2: same property from 2013 to 2016, rent went from $2000 to $2900. We were just too low. Tenant 2 bought a place but the rent increase didn't drive the decision, he just needed to wait 3 years after the short sale.

Tenant 3: rented at $3250 and is very happy. Rent is flat 2 years running. Will likely raise by $50 this year but still below market.

Property B (down the street from A) slightly larger 2900 sf in 92027

Tenant 1: leased in 2013 for $2650, went up to $2800 over three years. Tenant eventually moved out to buy as 3 year post short sale period passed.

Tenant 2: from $2800 to $3150, stayed less than year 2016 to early 2017, he broke lease

Tenant 3: went from $3150 to $3500 and signed three year which will likely go to 5 years at $3620, $3740 year 3, then likely $3800 year 4 and $3900 year 5.

Keep in mind similar house down the street was $2000/month in 2012.

Property 3 (4S Ranch) 92127

Tenant 1: 2013 to 2015, went from $2100 to $2500, moved out as he didn't want to pay for solar I installed

Tenant 2: 2014-2017, went from $2700 to $2950, I asked to leave as they didn't communicate well

Tenant 3: 2017-2018 at $3150, will go to $3200, likely $50 more after that

Property 4 (Jack's Pond/San Marcos) 3400 sf 92078

2014 to today: same tenant, have gone from $3150 to $3450 but did add solar, don't expect tenant to move anytime soon

Property 5: foreign oil rich country, when oil was $150/barrel, got $4000/month, now get $2300, currency declined, same tenant for 10 years now

Submitted by Hatfield on February 27, 2018 - 8:21pm.

One more thought: if you don't have it already, get the Nolo Press California Landlord's book. It has all the forms you need and explains all the legalities. It;s an absolute must and at ~36 bucks, no California landlord should be without it. Heck, you can even deduct the thing on your Schedule E.


Submitted by gzz on February 28, 2018 - 10:07am.

Flyer's places are generally high end condo renovations. No need for repairs between tenants that cost $$. He probably does not get handy tenants that fix and improve things themselves.

You can think of the below market rent a good tenant earns as a property management fee.

Submitted by EconProf on March 1, 2018 - 4:50am.

Back when I had apartments, I had the following policy on rent increases, which was explained to prospective tenants before renting to them:
"My rents are slightly under prevailing rents for comparable apartments. Over time, inflation and prevailing rents tend to go up. Your rent will be adjusted annually but will always be somewhat under prevailing rents."

The goal, obviously, was to keep tenants but not be stuck with way-below market rents, which I consider foolish.

This policy assumes that prevailing market rents for comparable units can be determined thanks to craigslist and visits to the competition, tenants can discover such information or be presented with it, and tenants are rational and do not act out of emotion. Alas, the latter was not always true.

Submitted by gzz on March 2, 2018 - 12:54pm.

My tenant who is about 5-10% below market is repainting many rooms that need it at her expense. She also paid to replace the furnace vent and move part of it to a more logical location.

I may do a 5% increase if it gets to be more than 15% below market, nothing betond that.

When I rented in OB I did the same thing. I had a good deal from the first day, and 5 years later when I moved out I was 30% below market. Kept it sparkling inside and out and paid rent 15 days early every month. Only maintenance request in 5 years was when the 1940s oven range started belching black smoke.

Submitted by treehugger on March 5, 2018 - 5:03pm.

Appreciate all the info.

Yep, have great tenants, they have been there for going on 8 years and they pay late almost every month, which equals a $100 late fee (we plan for it, so really no impact to us). They paid to have the place repainted (neutral colors) and are saying they are going to replace the carpet (they stained it).

I just sent them a notice that as of April 1, rent goes up $100, still well below market value for the area and we plan to raise it $100 every year until up to prevailing rates. We have enjoyed not dealing with the place and they are nice people. We finally feel that if they moved out we would renovate and collect more rent; however, not interested in forcing them out.

Pretty easy letter, made one up, based on what I found on google, should have done that to begin with.

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