The Secrets of a Landlord – Rent Increase in BC, Canada
There are many expenses that will pop up for landlords, even when you rent to good tenants. This is simply because having somebody living on a rental property comes with expenses: the dishwasher will break, the washing machine won’t work properly, etc. As such, you have to make sure that your rent properly matches the expenses and maintenance fees that are going to pop-up. As with everything in this world, that price is constantly increasing. So, that means that your rent should be as well.
Good Landlords Still Raise Rent
There are a lot of landlords out there who don’t want to raise the rent at all. It makes sense, seeing as many landlords feel that raising the rent is going to push away their loyal tenants, leaving terrible ones in their place. It’s an understandable fear, but you have to remember that the tenants who live in your building are humans, too. They understand that you’re raising the rent specifically for the purpose of making sure that the property is kept up-to-date for their benefit. Furthermore, there is a way to increase the rent in such a way so you won’t be that jerk landlord who randomly raises rent just because.
A major part of making sure that you are good landlord comes with following the law and the contract that both you and the tenant signed when the tenants moved in. A landlord is required in most situations to get 90 days notice when the rent is going to increase. As long as the landlord follows this, they are legally covered, but they’re also showing the tenant that they care about the people living on the rental property enough to notify them properly. It shows the tenant that the landlord is a good person and is simply raising the rent for practical reasons.
Additionally, the landlord is required to only raise rent a certain amount per year, usually somewhere around the line of 2%. So, while a landlord is not required to raise the rent every calendar year, it’s a good idea to consider it seriously, especially if you’re noticing more upkeep costs.
Good Living Means Mutual Respect
The price of living and enjoying life is climbing higher and higher every year, and the tenants that are living in your building understand that. As long as you follow the rules, you’re going to notice that nobody’s going to have a major problem. The good tenants – the ones who respect you as a person and a professional – are also comfortable coming to you if they have any concerns about the rent increase, and will also understand the reasons as to why (as mentioned already).
If you’re going into business for the first time as a landlord, and you’re looking for tips as to how to set the rent price, a lot of it comes down to simply how it appears to the prospective tenant that is touring the place. Since you’re limited by the laws in terms of how much you can increase, making sure that your first rental price is accurate and comfortable for you is extremely important.
If you’re leaning more towards the high market customers, which tend to be the ones that take better care of the property, make sure that you make the unit presentable to them in pictures, description, and presentation. Showing up to your meeting with them in a professional outfit shows them that you take your role seriously.
Make sure you come prepared to give them any information they need on the apartment in writing (much like real estate agents do with expenses, utilities, etc.). And make sure that the rental property itself is in perfect condition so that the tenant can see just how seriously you take the upkeep of the rental.
Pricing Strategy
Some first-time landlords make the mistake charging too low for rent in order to compete with all the other options out there. While it might make sense to be competitive, you have to make sure that you take that starting price very seriously. The price will determine how you do as a landlord, and how the tenant views your place. So make sure that the rent that you set covers enough for the upkeep of the rental property, plus extra. That way you will be paying for your business expenses from your business income, and won’t be paying out of your own pocket when it comes to maintenance.
As the years go by, it’s a good idea to increase the rent on regular basis, simply because the building/property is going to require much more maintenance as time goes on due to aging.
Be Professional
As you can see, a lot goes into making the financial decisions about your rental property. Always make sure you keep your competition in mind, and make sure that you’re matching them, but don’t try to outbid them, otherwise you’re only end up hurting yourself in the long run.
The realistic tenant understands that you have obligations to meet as well. And while they compare your price against the competition, they will also be looking for a good landlord who handles themselves professionally and does what is necessary to take care of the property and those living on it. How a landlord approaches the situation really does mean a lot to the tenant, so make sure you do things right for the start.
Don’t be afraid to increase the rent whenever you feel like expenses are climbing too high for the amount of money that you’re receiving from your loyal tenants. The good ones will stay, and the bad ones will leave.