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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 December 19, 2024
If you're properties are suffering from lack of heating this winter, these 3 common issues could be the cause.
By Dustin Edwards December 12, 2024
Although Southern California’s winters are typically mild when compared to other parts of the country, tenants still value a warm home during the cooler months. Taking steps to maintain a comfortable living environment shows your tenants that their needs are being prioritized. This is crucial for tenant satisfaction, especially during the holidays. Below are three methods to help keep tenants warm during the winter season. Maintain Heating System It's required for landlords to provide rentals with a working heating system, however, it's not uncommon for these to fall into disrepair either because of lack of maintenance or negligence. Scheduling regular inspections and maintenance before the coldest weather can help to ensure the heating is reliable and efficient. Cleaning air filters, and checking for cold spots, or irregular noises can help prevent small issues from escalating into expensive repairs. Preventative maintenance can help to reduce the chances of inconvenient calls for emergency repairs. Being proactive with your maintenance can also help you protect your investment while earning goodwill from your tenant. Another factor that can affect your heating system is drafts around windows and doors. These drafts can cause your heating system to overwork which makes the system less efficient, and reliable and ultimately reduces the lifespan of your heating system. You can address this by inspecting the seals around doors and windows for gaps or cold spots. Replace worn-out seals and caulking where it's needed. Offer Smart Thermostats Consider providing your tenants with a smart thermostat for energy-efficient heating. This can not only give tenants control over their comfort, but it's also a great tool to reduce energy usage. By providing this upgrade to your tenant, you show a commitment to your tenant’s satisfaction which can in turn result in a long-term tenant. These kinds of devices definitely benefit your tenants, though they can also contribute to the longevity of your rental property as well. Additionally, you can give your tenant a smart thermostat as a holiday gift . This can show your tenant that you’re not simply collecting rent while protecting your investment. Reverse Ceiling Fans The direction in which a ceiling fan rotates is oftentimes overlooked, and it can have a great effect on the temperature of a home. A ceiling fan is typically seen as a way to cool down a home during the hotter seasons without using the air conditioning . Reversing the spin of a ceiling fan can help to circulate warm air more efficiently during the cold season . This is because warm air rises, and a fan rotating clockwise will push the warm air back down helping maintain warm temperatures. Most fans have a switch on the motor and it is easily accessible for most people with a step ladder. This easy adjustment helps reduce the need for your tenant to use the heating system. Tenants will notice a more consistent and comfortable temperature indoors. This should also help reduce costs on their energy bill. Reversing the rotation of the ceiling fans also takes some of the strain off of the heating system. This helps to ensure it operates efficiently for years by reducing the wear and tear on it. Taking proactive steps this winter season to ensure your tenant’s comfort demonstrates a landlord’s commitment to their tenant’s comfort. A comfortable tenant is a satisfied tenant , which can lead to a long-term tenant and steady rental income. Consider it a small investment for long-term success. If you need help keeping your rental warm or managing Beach City rental property, we invite you to call us today at (562) 888-0247 or complete our Owner Application online .
By Dustin Edwards December 5, 2024
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