How to Raise the Rent the Right Way for Your Garland Rental Properties

It is a common struggle for new landlords: you are eager to start earning money from your Garland rental properties—so you rush to market with low rent rates, find tenants right away, and get leases signed.

However, after the excitement wears off, you start to realize that comparable properties near your investments are renting for $200-300 more per month than your properties!

• Did you set the rent too low?
• Do those other properties just have more helpful amenities?
• How do you know—and how do you fix it once you find out?

In this blog, the expert property managers at RentHub Property Management will help you determine whether you set a smart rental rate—and what to do when the rent is too low.

Did I Set a Smart Rental Rate?

It can be nerve-wracking to wonder whether you chose a smart rental rate—especially with a lease signed and nothing you can do about it until renewal time.

If you are wondering whether you set the right rental rates in each of your properties, please feel free to contact us at RentHub Property Management. The first step is free: we'll run a rental analysis just for you, and examine current market trends, vacancies, comparable rental rates, and other crucial metrics to determine what the ideal rental rate is for your Garland investment properties.

Uh-Oh, I Set the Rent Too Low!

So you've discovered you've set the rent too low for your Garland rental properties. The good news is, Texas doesn't have any rent control laws—meaning there is no cap to how much you can raise the rent to correct the problem. However, raising the rent too much in one go can leave your current residents upset and ready to look for a new rental.

How do you decide how much to raise the rent—and when.

• Run a cost-benefit analysis: If your rent should be $1700, but it is $1500, raising the rent by $200 per month would bring in $2400. You have to weigh this against the cost to make your rental ready for the next tenant. If it takes two weeks, that is $850 in rent you're not collecting. Add in fresh paint to a couple of rooms for $500, rekeying locks, and other tasks, and you're out $1350—whittling down your profit to $1050. A standard rent increase of 5% will bring in an additional $900. Is the extra $150 you'd make from getting a new tenant worth the sudden price hike?
• Ask your property manager: Your Garland property manager knows what the market will support because they have experience working with local rental homes. Your property manager will help you set the rent increases that make the most sense for your investment.
• Use the average increase: An average rent increase of 3-5% annually is typical. That doesn't mean you should always raise the rent by that amount, though. You don't want to price yourself out of the market and lose good tenants!
  
  

Other Considerations When Raising the Rent

Raising the rent can be complicated because there are things you shouldn't do as well as that you need to remember as a landlord.

• You have problem tenants: Can you raise the rent to get them out? The easy answer is no: you can't raise the rent in a retaliatory manner. This was a trick question: never raise the rent as retaliation or to get a tenant to move.
• Do not base the rent on the tenant—set the rent and then find appropriate tenants.
• Be aware of the market: as the "Silver Tsunami" approaches, experts are pondering the fate of the 21 million homes that are going to hit the market—and how that will affect your bottom line.
• Be sure your plans to raise rent do not clash with your lease, as that is the binding agreement for your properties. If you don't specify that you can change the rent during a lease term, you will have to wait for renewal.

Let the Property Management Pros Guide Your Rent Rate