Here are five tips Sarah covered to prepare you when having the talk with your residents:
1. Understand the perceived value of your property. Typically, an increase in rent will not be significant enough to drive a resident out of your community because they can no longer afford to live there. More often, it’s the resident’s perception of the increase that may turn their head toward other options. When notifying them about raising the rent, be sensitive about what the dollar amount signifies to them and address those concerns upfront.
2. Know your market. When deciding how much to increase rent, consider market value, how your current rates compare with similar units and the demand for rental property. Are you highlighting your best community features? Refer to your market in the quarterly Apartments.com STaR (Statistics, Trends and Research) Report to help determine the average rent in your area, along with popular amenities and community features.
3. Stay positive and confident! How your resident responds to a rent increase will depend, in part, on your attitude, so don’t apologize or feel the need to defend the increase. If your tone is timid, your resident may perceive the increase negatively. Be sure to address the topic in a matter-of-fact fashion, and show your resident how this also benefits them!
4. Make it easy on yourself. Lighten your load by staggering notices over a few months. For example, let’s say you have 20 units up for renewal in October. Test the waters by giving a 90 day notice to 10 residents informing them of their increase. See how many bites you get with X percentage. Depending on the success of round one, maintain or lower the increase amount for the next five residents 70 days out, and the final five the last 45 days out.
5. Sweeten the deal. Some property managers go out of their way to provide a spoon full of sugar to help rent increases go down easier by offering a gift for renewing. Say thanks by upgrading an appliance, installing new carpeting or offering to paint a room. The presentation can go a long way too, so have fun with it and wrap the new appliance with a big red bow!