What to consider BEFORE you raise rent

Dustin Edwards • November 11, 2022

Raising Rent is Important for Both Owner and Tenant

The rent placed on your Long Beach investment properties determines the amount of income that property provides. Although wanting to raise your rent to maximize the amount of income any property can provide seems enticing at first, there are a few items to consider BEFORE you give your tenant the news that their rent will be increasing.


Today we’ll be discussing what you should do BEFORE you raise your rent and how to properly communicate this to your tenant.


Communication

Tenants don’t often like the idea of their rent being increased. A simple way for this not to be a surprise to them is to communicate during the lease signing that you will be increasing the rent a number of times during the lease. Also remind your tenants with enough time for them to prepare for the increase in rent. This time will be useful to them so they can adjust accordingly.


Moratorium 

As a way to help families cope with the recent global pandemic, the federal government implemented a rental moratorium. Essentially it is a period of time the government has allowed for rent to be delayed. Although for the majority of the country the moratorium ended in 2020, Los Angeles county chose to extend the moratorium until the 30th of June 2023. This can cause a delay on the ability to collect rent whether or not you've decided to increase it. 


It's necessary for you to do your due diligence to check if it's in effect in your area. To be sure your property is not subjected to the moratoriums it's helpful to ask your full service property management company if you're currently affected by it. As they should be aware of the local laws and how they are changing. [insert link]


Maximum Raise Amount

It's important for you to know the most amount possible you can raise and make sure you don't go over. As this may cause legal problems in the future. The state of California has many laws that are designed to protect tenants though these laws can be different depending on your county guidelines. If you own properties in multiple counties it would be helpful to have information about all your local laws to ensure clarity when discussing raising rent to your tenants.


Competition

Competition will always have an input in dictating the amount you can ultimately charge for your rent. If the local competition is renting a 1,000 square foot single family home for $1,500 it will be difficult for you to be able to rent a similar home in the area for twice that much. 


If you are having a hard time filling up vacancies, or tenants are moving out after an increase in rent it's important to understand
how competition affects your ability to raise said rent. You should be aware of what your rental is competing against in terms of cost, amenities and relationship other tenants have with their landlords.


How long have they been a tenant?

This may seem unorthodox, but long term tenants who follow the rules set by the lease can be invaluable to your bottom line. Meaning in some cases it's better not to increase the rent. Long term tenants tend to be happy and loyal, by increasing their rent they might be pushed to move to another location. Replacing a happy tenant can be difficult and the amount of time required to prepare a home to put back on the market sometimes isn't worth losing a tenant who pays on time and causes little issues.


You can reward long term tenants with less frequent rent increases or more modest increases as a strategy.


There are many items to consider before increasing your tenant’s rent. If you need help communicating rent increase with them, if you’re looking for a high quality
full service property management company or if you require any further information on the services they provide call us at (562) 888-0247 or feel free to fill out our free rental analysis to see what your rental could yield today.


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By Dustin Edwards June 6, 2025
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