Before signing a lease on a new apartment, renters will usually do their homework. They’ll research the neighborhood, assess the price of rent and utilities, compare apartment complexes and ultimately choose an apartment that’s both budget-friendly and feels like home.
But what if your landlord decides to increase the rent? That changes the game. How do you respond to a rent increase? While it’s never fun to see that notification, you do have options and it’s smart to know what those are so you can respond appropriately to a rent increase.
Understand your rights
When you first learn that your rent will be increasing, it’s easy to become stressed, frustrated and mad. But before you do something rash, you need to understand your rights and the landlord’s rights.
Legally, property owners have the right to increase rent by any amount they like. However, they can’t increase it without written notice and they can’t violate the terms of your lease.
If you’ve signed a fixed-term lease, you’re locked into that rate for the length of the lease. If you’re a month-to-month renter, landlords can increase the rent from one month to the next. In both cases, landlords must give up to 30 days’ notice of an upcoming rent increase.
Research the market
To understand why rent is increasing and better understand how to respond to a rent increase, doing some market research can be helpful. Check out rental rates at neighboring apartments.
Is the new rent significantly higher compared to similar apartments or is it comparable? This can be helpful should you choose to speak with your landlord and try to negotiate.
Talk to your landlord
If you’re frustrated about your rent increase, you can always talk to the property management, ask questions and try to negotiate. As with any important conversation, it’s important to stay calm and professional instead of getting angry and confrontational.
If you’re happy with your living situation and feel the rent increase is unfair, schedule a meeting or write an email to your landlord. You can ask for clarity around the decision and propose a negotiation or compromise. Here are a few scenarios when negotiation may work in your favor:
- You’ve been an outstanding tenant for a period of time. Your rental history may work to your favor if you’ve been a great renter. Discuss your history and show you’ve never missed a payment and always been on time.
- You notice multiple apartments are for rent. If multiple apartments are empty within your complex, the landlord may be trying to make up the lack of income by increasing your rent. However, some income is better than none and you can professionally point out that you may leave and the landlord would then be left with even more empty apartments.
- You’ve done market research, and it seems the spike isn’t comparable. Here’s where some market research can come in handy. If you can prove that neighboring apartments are better priced, you can try and negotiate the rent increase with your landlord.
Keep in mind that landlords don’t have to negotiate, but it’s worth a shot if you don’t want to move. Also, remember to get everything in writing as verbal conversations are not trackable.
Reassess your budget
When you receive a rent increase notice, it’s a good time to reassess your budget. Conventional financial wisdom suggests that your rent and utilities take up 30 percent of your budget. If the rent increase keeps you within that range, it may be worth staying. However, if it puts you outside of that range, it may be worth moving out and finding a new place to live.
Sign a longer fixed-term lease
In some cases, landlords will lock in your rental rate if you sign a longer fixed-term lease. This is a win-win for both the landlord and the renter. The landlord is guaranteed a set income for a set period of time, and the renter is guaranteed a fixed rental rate. If you know you’re going to be staying in the same city and happy in your location, you may consider signing a longer lease.
Move out
If staying in your current apartment is no longer an option, you can always move out if you’ve been notified of a rent increase. Moving can entail a lot of work, so make sure you’ve done your research and are choosing an option that works best for you and your family.
Responding to a rent increase
Rent increases are a normal part of the renting cycle, but that doesn’t mean you lack options. Understanding your options and realizing you have choices always makes scenarios easier and less stressful.
