Whether you’re a landlord or someone conducting property management on behalf of a real estate owner, your goal is to turn a profit on the property. To do this, you must weigh operations expenses, the potential for earning a profit, and the need to keep rental rates within a desirable range. These suggestions can help you determine when you should raise the rent.

3 Reasons for Property Management to Adjust the Rent

1. Keeping Up With the Cost of Living

Over time, the cost of utilities, taxes, and general upkeep of the property will increase. Maintaining the current rental rate means you’ll be reducing the profit you earn. Therefore, most tenants expect a slight increase in what they pay once their current lease expires if they want to enjoy the same quality of experience going forward.

2. Dealing With Bad Tenants 

If you have a problem tenant, raising the rent can help you deal with him or her. This is especially true if they frequently damage the property or request a large number of repairs. The added sum charged for rent can be used to compensate for the increased upkeep cost. Alternatively, the new rent may be too much and your problem tenant may decide to move.

3. Compensating for New Amenities

Your property management team may have decided to install a pool or gym at your apartment complex to compete with neighboring facilities that offer similar incentives. In doing so, you can also up the rent to be closer to what those other apartments go for. While some of your current tenants may be outpriced, others who are more financially stable are likely to move in.

NAI FMA Realty has 50 years of experience dealing with the Lincoln, NE, real estate market. They offer property management services to help owners gather and analyze financial data about their operations, improve the tenant-landlord relationship, and enforce the stipulations of their leases. To learn more about their offerings, visit their website or call them at (402) 441-5800 with questions.