Landlords are often faced with the dilemma of whether to increase rent on tenants. You might feel tempted to raise the rent if you have a happy tenant. However, higher insurance premiums, taxes, and utilities could mean lower profits. You might not get the best price for your property if you rent in a hot market.

You, The Landlord, May Decide To Raise The Rent If You:

• The market rates have risen.

• Property maintenance costs must be paid.

• Property taxes have risen.

• The premiums for insurance have risen.

• Condo fees and homeowners association fees have gone up.

Can A Landlord Raise The Rent

Depending on local laws, a landlord may be able to raise rent before renewing the lease. A lease agreement sets a fixed rent price for a given period of time (i.e. six months or one year. The rent price will not change or increase in any way during the period, even if the property is sold.

For tenants who are part of the Housing Choice Voucher Program, or Section 8, a rent increase is usually only possible once a year, depending on state and local laws. Each year, the HUD sets new Fair Market Rent standards, which can be used to help determine if a rent increase is appropriate. Typically, a copy of the written rent increase notice is sent to the local public housing authority for approval. Anyone who uses a Housing Choice voucher should consult a lawyer before increasing rent.

When Can A Landlord Not Raise The Rent

While maintaining a competitive rental price is key to managing a successful investment property, there are certain circumstances where a landlord cannot raise the rent. It may not be possible for a landlord to raise the rent in certain circumstances, such as:

• You try to increase the rent during the lease term.

• A rent increase is not allowed under the lease.

• Not properly sent advance rent increase notice.

• Rent control is available for the property.

• The tenant could see the increase as a retaliation.

• The increase constitutes discrimination against a tenant according to the Fair Housing Act.

• You are trying to get a tenant out.

• Tenants are permitted to increase rent beyond what is allowed by law.

What Is The Maximum Rent A Landlord Can Raise

The rent increase a landlord can make depends on where you live. If you increase your tenant's rent by a certain amount, some cities might require you to pay relocation costs. 

How To Increase Rent

Rent increases that are higher than the tenant's income could cause tenants to lose their homes. To keep tenants from moving out, you can consider the following when raising the rent.

• When you raise the rent, communicate.

• Describe how your new rental rate will be competitive in your area.

• Rent increases should be reasonable and consistent (e.g. 2% to 3% per year).

• Give plenty of notice.

• While you're determining the rental price that best fits your financial goals, your tenants are doing the same.

What Notice Must Landlords Give Tenants To Increase Their Rent

Typically, a landlord must give tenants at least 30 days written notice before their lease expires or is up for renewal, but the required amount of notice can vary by state, city, or town. To ensure you comply with the requirements for rent increases in your state or city, consult a local attorney.