Received a Rent Increase Notice From Your Landlord? Here’s What You Can Do
Whatever the case may be, it is never an easy decision to make, especially if your landlord has also notified you of the increase in your future rent.
But First Understand – Why is the Rent Going Up?
Now, moving out is the first and most obvious thing to come to your mind. However, it shouldn’t be the case. Not until you have exhausted all possible options.
First things first, it is essential to try and reason out why is your landlord increasing the rent?
With the rising costs, increasing property taxes, maintenance and market rates, your landlord may be forced to hike the rent. In addition to this, the demand for houses is higher than the supply in the current market. So, it’s natural for prices to increase.
Especially if you are living in metros, downtown or pricey areas, the rents are on a steady rise.
According to statistics released by RentCafe, a rental information company, 38 out of the 50 most expensive regions in the USA has faced a year-over-year rent increase.
Is it even legal to get a rent increase?
It could be that you are looking at a whopping 25% or more rent increase and you are thinking if it’s even legal?
Most likely, yes it is legal since landlords can charge rent according to market rates.
State laws only dictate the duration of the notice a landlord should provide before raising the rent. They also suggest that landlords can increase the rent only at the end of the lease, even if your lease transitions into a month-on-month agreement.
According to Rachel Stults at Realtor.com, rent-controlled and rent-stabilized areas are pretty rare. Only certain states like for example Oregon prevent rent increase in the first year and set longer periods of notice before a rent increase can be mandated.
How to Respond to Rent Increase Notice?
If you are facing a rent increase, don’t stress. After the initial shocks wear off, it’s time you ponder on the right options for dealing with it.
“You don’t typically have the upper hand as a tenant. However, there are still some things you can try to negotiate with the landlord or bring down your costs.”
- Nat Kunes, Vice President of Product at AppFolio, a full-suite property management software company
Here are some things you should do:
1. Take the Time to Think About It
Remember that you don’t have to make a decision immediately if you are staying or going and so, avoid knee-jerk reactions. Make a plan to sort out your finances and check if you can accommodate the increase within your income and other expenses.
If you are unable to afford it, do some research on what else is available in the market. Are the rents within the area you live generally gone up and the landlord is asking for a reasonable price hike? Also, consider whether it’s worth for you to move out to other areas and save on the rent increase.
2. Consider Moving Within the Building
If you are single or think that you are not utilizing the full living space of your one or two-bedroom apartment, consider moving to a studio or smaller units available within the building. Such small units typically have lesser demand and lower market rates. They are not much vibrant as opposed to the larger apartments.
If your landlord has vacant smaller units or studios, offering to take up that space may make it easier for you and the landlord. Since it’s easier for your landlord to rent out larger apartments, they may even be willing to provide you concessions like free moving fees, waiving of application fees, background checks or security deposits because they already know you as a tenant.
3. Try to Negotiate Reasonably
Have a chat with your landlord and express your concerns about the rent increase. Tell them that it might not be affordable and you will probably have to move out. If you have a good history and get along well with the landlord, there may be chances to negotiate and bring down the rent. And, if have been a good tenant, they may just give in as finding new tenants can be cumbersome. There’s nothing wrong in asking even if they say a no.
4. Ask to Sign a Longer Lease
The main bargaining power for tenants is to offer a guarantee to your landlord that you will stick on for a longer time. If you sign a 6-month, 1-year or 2-year lease, you might get a discounted rent and other benefits.
If you know that you will most likely be staying for a long-term then this your best bet to lower your rent increase. However, don’t sign on a long-term lease if you know that you will not stick on. Breaking your lease is the last thing you want to do and your landlord will also be irked if you open up a vacancy that was supposed to stay closed.
5. Consider Having A Roommate
If you have extra space and willing to share, then you can bring in a roommate. Cut your rental expenses by half and avail great benefits. Even if you don’t have the extra space, consider moving to a larger unit in the same building and bring a roommate. The landlord can also provide additional concessions for leasing that unit and even with a higher rent for the large unit, splitting the rent in half can translate into greater benefits for you. With equal sharing in rent, utilities and internet cost, you will most likely to save.
6. Ask for Perks
Most often landlords are unwilling to budge on rent increases. In that case, you can seek and negotiate for some other concessions or perks that offset the increase. Renewal incentives, high-traffic-area carpet cleaning, offering a new appliance or replacing outdated fixtures in your apartment are some perks you can look out for. You may be able to at least get something out of the deal and save yourself from the cost of moving out to a new place altogether.
7. Move Out
Last, but not the least, if you are left with no other option do your research and move somewhere else. Weigh your options and work out your finances to see if you are really saving by moving to a new place.
A rent increase is the last thing that you want to deal with, but it’s definitely not the end of the world. It’s just a matter of how you respond to it. Make the right choice and assess your options with a clear mind!