One question that every apartment investor will ask themselves at one time or another is, “How to raise rents,” or “How can I raise rents fast?” This is especially true when taking over a new property, or for an investor that has owned a building for a number of years. I am going to put on my “Coach” uniform for this one, so get ready for my no-nonsense answer…
When it comes to raising rents fast..bottom line is you just have to do it.
There is no reason your tenants should not be paying market level rent or even a bit higher. Remember, you are not a social worker, this is a business, no time to feel sorry for Mabel in apartment 12.
The biggest mistake, by far, is this: people leaving the rents alone, feeling guilty about raising them or doing it very slowly if at all. The fastest way to profit from your property and to keep it profitable is to keep your rents at market levels. If you have tenants now on month to month leases you need to give them notice asap.
Remember if they leave that is a GOOD thing since you will replace them with higher paying tenants and that will make your property cash flow better and be more valuable. For those tenants that have some time on their leases, say 60 – 90+ days…make sure you start working on them NOW in terms of working on a new rental amount instead of waiting until the last minute.
I start working on keeping our good tenants and getting them to pay higher rents months before their leases come due. Bottom line, there is no real magic here. You just have to get them up and in most cases you can raise them more than you think.
Keep in mind why you are in the apartment business. Your primary goal as an investor is to create as much profit for your apartment business as possible in order to build your wealth…fast. Raising rents is a primary ingredient in this achievement, and you will be glad you did once you begin to take action.