Can You Guarantee an Increase In Rental Rates?
Everyone makes promises, but how often are the kept. Some property management companies guarantee an increased rental rate every term, but how realistic is it?
Increase in Rental Rates
All property owners want an increase in rental rates. While a high return on investment property is fully attainable, companies that promise 20% to 30% rental rate increase are often false promises.
There are housing laws that prohibit unjustifiable rent increases and set certain limits. If an unnecessary increase is implemented, tenants may no longer be able to rent your property. If current tenants are unlikely to afford a drastic increase, prospective tenants may not be able to either.
Renovations are great, but they don’t justify inflated rental prices. Living in Tampa Bay, a pool home is on a lot of tenant’s wish lists, but it doesn’t mean your home will rent for $1500 more than the same house down the street without a pool.
Most prospective tenants will ask about the true rental value (the actual rental price paid by the last tenant) so be prepared if you’re asking for a large increase over the current rental rate.
Remember that a day your property is unoccupied is a day with zero return on your investment.